Encana Corporation (TSX & NYSE: ECA) announced today that it is executing on its plan to leverage the exploration and development of certain of its oil and liquids-rich assets through partnership opportunities designed to maximize recognition of the value inherent in its large asset base. Encana is conducting exploration on several prospective oil and liquids-rich opportunities and is planning to develop several new key liquids resource plays from this vast inventory.
“Our recently announced capital budget will direct more than 55 percent of 2012 upstream capital expenditures toward the exploration, delineation and development of our oil and liquids-rich opportunities. Over the past two years, we have increased our prospective oil and liquids-rich holdings and we plan to develop them using the same methodology we apply to our natural gas plays – through a low-cost entry approach and a firm focus on improving operating efficiencies and lowering our cost structures,” said Randy Eresman, Encana’s President & Chief Executive Officer.
“We continuously look for opportunities to manage our asset portfolio and enhance the long-term value creation of those assets. Accelerating the rate of development on our oil and liquids-rich land holdings can be achieved by leveraging third-party capital which shortens our development timelines, reduces our cost structures and allows us to realize the value we have captured in these opportunities at an earlier stage. At the same time, we continue to believe in the long-term future of natural gas and are investigating the potential for additional long-term partnerships targeting the future development of portions of our natural gas lands,” said Eresman.
Oil and liquids-rich opportunities on both sides of the border
In the USA Division, Encana has amassed a substantial land position in some of North America’s most promising oil and liquids-rich plays including the Tuscaloosa Marine Shale straddling the Mississippi and Louisiana border; the Utica/Collingwood formations in Michigan; the Eaglebine play in East Texas; and the Mississippian Lime in Oklahoma and Kansas. The company is seeking partnerships to accelerate the commercialization of approximately 1.2 million net acres within these areas. In the Canadian Division, Encana also plans to market partnership opportunities covering approximately 375,000 net acres in the Alberta Duvernay.
“At this point, it is premature to speculate on the size or value of any potential transaction. We are marketing an interest in these assets in which Encana would continue to operate and retain majority ownership,” said Eresman.