Encana To Sell Certain Jonah Field Assets To TPG Capital For $1.8 Bln

(RTTNews) - Canadian energy producer Encana Corp. (ECA.TO, ECA) Monday said its unit Encana Oil & Gas (USA) Inc., has agreed to sell certain natural gas properties in Jonah field to an affiliate of TPG Capital for about $1.8 billion.

"This transaction is consistent with our strategy. With the divestment of Jonah, we are unlocking value from a mature, high-quality asset and allowing our teams to focus on our five core growth areas and continue with execution of our new strategy," said Doug Suttles, Encana President & CEO.

The Jonah field is located in Sublette County, Wyoming, which comprises a total productive area of about 24,000 acres and over 1,500 active wells. Encana said the transaction also includes over 100,000 undeveloped acres adjacent to Jonah known as Normally Pressured Lance, or NPL area.

Encana said estimated year-end 2013 proved reserves for Jonah totaled about 1,493 billion cubic feet equivalent, or Bcfe. Jonah is one of the largest natural-gas fields in the U.S. that produced 323 million cubic feet of gas and 4,700 barrels of gas liquids a day after royalties in 2013, it added.

The buyer expects to retain the employees currently working in connection with the Jonah field and plans to continue investment in the field and adjacent acreage, which will assist in supporting local employment in the area.

Craig Manaugh, president and COO of the new TPG oil and gas platform stated that Jonah field office will be maintained near Pinedale, Wyoming and will open a Denver office as a result of the transaction.

The sale, subject to satisfaction of normal closing conditions, as well as regulatory approvals, is expected to close in the second quarter of 2014 with an effective date of December 1, 2013.

Evercore and Davis Graham & Stubbs LLP advised Encana on the transaction, while Vinson & Elkins LLP advised TPG. TPG is a global private investment firm.

Encana said it will update its corporate guidance when it reports its 2014 first-quarter results.

ECA closed Friday's regular trading session at $21.42, up $0.18 or 0.85 percent, on a volume of 4.64 million shares.

ECA.TO closed on the TSX at C$23.70, up C$0.25 or 1.07 percent on 1.63 million shares.