Encana Corp. has officially exited the San Juan Basin, announcing Thursday that it has completed the sale of 182,000 net acres in New Mexico to Denver-based DJR Energy LLC.
The company reached an agreement in October to sell the assets for $480 million. DJR, which operates vertical wells producing from a variety of targets in the basin, said it now holds the largest position in the core of the San Juan oil window, with 350,000 net acres there.
“We look forward to continuing to unlock the potential of the southern San Juan Basin and believe DJR is well positioned as the dominant player in the oil window,” said CEO Dave Lehman. “Our team has done an excellent job of preparing for the transition and we look forward to commencing drilling operations.”
Calgary-based Encana said the proceeds would add to its financial strength and help support a $1.25 billion share buyback and a 25% dividend increase it has planned once its deal to buy Newfield Exploration Co. is completed in the first quarter.
Encana has narrowed its focus in recent years to a program concentrated mainly on the Permian Basin and Eagle Ford Shale in Texas, and the Montney and Duvernay formations in Canada. The company would expand its North American onshore portfolio to the Anadarko Basin with the Newfield acquisition.
The San Juan Basin assets produced 5,400 boe/d in 2017, including 3,900 bbl of liquids.