On Monday, Encana announced it will sell its San Juan basin assets for $480 million to DJR Energy of Denver. Encana photo.

Encana deal “adds to our financial strength”: President and CEO Doug Suttles

Calgary-based Encana Corporation announced on Monday that its wholly-owned subsidiary in the United States, Encana Oil & Gas has agreed to sell its San Juan basin assets for $480 million to DJR Energy LLC of Denver.

The assets are located in New Mexico and include approximately 182,000 net acres.  DJR says that when combined with its existing assets, DJR will have a total of over 350,000 net acres focused in the oil window of the San Juan Basin.

“Our entire management team is very excited to acquire this world class asset from Encana, who has been a fantastic operator,” said Dave Lehman, president and CEO of DJR.

In 2017, Encana’s San Juan assets delivered average production of about 5,400 barrels of oil equivalent per day, including 3,900 barrels per day of liquids.

“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,” said Lehman.

Doug Suttles, Encana President and CEO said the deal “adds to our financial strength and is aligned with our focus on maximizing the value of our assets and disciplined allocation of capital”.

He added “This is a very exciting year for our company as we deliver strong growth and generate free cash flow, demonstrating the strength and quality of the business we have built.”

The sale is subject to the satisfaction of normal closing conditions and customary closing adjustments and is expected to close in the fourth quarter of 2018 with an effective date of April 1, 2018.