Canada’s Encana selling Haynesville natural gas assets for $850 million

Canada’s Encana said Tuesday its Encana Oil & Gas (USA) unit is selling for $850 million its Haynesville natural gas assets to a joint venture formed by GeoSouthern Haynesville and GSO Capital Partners-managed funds. Through transfer of current and future obligations, Calgary-based Encana will reduce its gathering and midstream commitments by roughly $480 million on an undiscounted basis. Buyer and seller also have agreed to Encana transporting and marketing GeoSouthern s Haynesville production on a fee-for-service basis for the next five years. Encana said it will use the cash to reduce its net debt. This transaction delivers significant proceeds that we ll use to strengthen our balance sheet,” said Doug Suttles, Encana CEO. “In addition, it eliminates our midstream commitments in the Haynesville and captures ongoing revenue upside through a gas marketing arrangement. Encana s Haynesville natural gas assets include roughly 112,000 acres of leasehold, plus additional fee mineral
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