EnCana Corp. said Wednesday it's looking for a buyer for its natural gas assets in northern Canada, which include properties in the Mackenzie Delta/Beaufort Sea region. The Calgary-based producer hopes to complete the sale by the end of the year.
During a conference call to discuss quarterly earnings (see related story), CFO Brian Ferguson said the Canadian frontier properties don't fit in with EnCana's current strategy. EnCana also wants to sell its Chad assets by the end of 2007. Prices were not disclosed.
Ferguson said the northern Canadian "exploration properties, which have generated some encouraging natural gas and oil finds...we believe can be monetized." All of the properties are conventional oil and gas assets, he said.
In northern Canada, EnCana holds 25 Significant Discovery Licenses and one production license in Nunavut, the Northwest Territories and the Yukon Territory. EnCana also is the operator of one Exploration License in the Mackenzie Delta region, which encompasses about 133,000 gross acres (50,000 net acres).
In 2005, EnCana drilled one successful well to appraise a discovery made a year earlier at Umiak in the Mackenzie Delta area. Regulatory applications were made to indefinitely continue about 26,000 gross acres (10,000 net acres) of the license associated with that Umiak field discovery.
EnCana has been selling off noncore assets for the past two years, including many of its international properties, its natural gas liquids business and its gas storage business, to better focus on its gas-rich Western Canada and Rocky Mountain resource plays (see Daily GPI, Sept. 14, 2005). Earlier this month, EnCana also announced a $10.7 billion joint venture with ConocoPhillips to build an oil sands bitumen business in Canada (see Daily GPI, Oct. 9).
The Mackenzie Delta area holds significant gas reserves, but it lacks pipeline infrastructure. A consortium led by Imperial Oil has tried for several years to gain approval to build a gas pipeline to carry supplies south, but the C$7 billion proposal has been stymied by land access issues and regulatory delays.
EnCana also announced that founding President and CEO Gwyn Morgan, who stepped down from the CEO role last year, has retired from the board of directors and as vice chairman. He had worked for nearly 30 years to build EnCana and one of its predecessor companies, Alberta Energy Co. Ltd.
"The board of directors and management of EnCana express deep appreciation to Gwyn for his outstanding leadership, and wish him health and fulfillment as he pursues new endeavors," said Chairman David O'Brien.
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