Encana reported on Thursday that it has completed the sale of its San Juan asset in New Mexico to Denver-based DJR Energy. 

Encana sale valued at $480 million

Encana says its $480 million sale of its San Juan asset in New Mexico to DJR Energy of Denver has been completed.

The deal was announced in early October and includes 182,000 net acres and represents the Calgary-based company’s total land position in the play.  The San Juan asset delivered average production of approximately 5,400 barrels of oil equivalent per day, including 3,900 barrels per day of liquids.

In October after the sale was announced, Dave Lehman, President and CEO of DJR said “Our entire management team is very excited to acquire this world class asset from Encana, who has been a fantastic operator”.

“We are now poised to become a dominant player in the San Juan Basin as we combine their asset with our existing footprint and focus our efforts on further developing our acreage”.

Encana President and CEO Doug Suttles said “This transaction continues our track record of unlocking value from non-core assets”. He added “The proceeds from this sale add to our financial strength and strongly support our commitment to our $1.25 billion share buyback and 25 percent increase to the dividend in 2019.”

According to a press release, following the expected close of the Newfield Exploration Company merger, Encana is set to complete its $1.25 billion share buyback program in 2019.

“Encana’s planned share buyback and previously announced 25 per cent increase to its dividend following closing of the transaction with Newfield, highlight the quality of its business and commitment to return capital to shareholders,” the company wrote in a press release.

The transaction has an effective date of April 1, 2018.

Encana’s planned share buyback is subject to receipt of regulatory approvals, stock exchange rules and securities laws and may be made through purchases in the open market or other permitted means.