Freeport-McMoRan Oil & Gas To Sell Its Eagle Ford Shale Assets To Encana Unit

(RTTNews) - Freeport-McMoRan Copper & Gold Inc. (FCX) announced that its oil and gas subsidiary, Freeport-McMoRan Oil & Gas, has entered into a definitive purchase and sale agreement to sell its Eagle Ford Shale assets for $3.1 billion to a subsidiary of Encana Corp. (ECA, ECA.TO).

The Eagle Ford assets include all of FM O&G's interests on approximately 45,500 net acres with estimated net proved reserves totaling 59 million barrels of oil equivalents and estimated net proved and probable reserves of 69 million BOE at year-end 2013. Production from the field averaged 53,000 BOE per day in the first quarter of 2014.

The company estimates after tax net proceeds from the transaction of approximately $2.5 billion. Approximately half of the proceeds will be used to repay outstanding indebtedness and the balance is expected to be used for investments in additional assets in the Deepwater Gulf of Mexico to accelerate the company's growth initiatives, the company said. Freeport-McMoRan expects no gain or loss to be recorded on the transaction.