Encana Corp., strapped for cash and ready to deal, is said to be in advanced talks to sell for close to $2 billion its holdings in the Jonah field in Wyoming, a natural gas behemoth whose attraction has dwindled steadily over the past few years.

"Unnamed sources" told the Wall Street Journal that a transaction was pending with private equity firms Carlyle Group LP and NGP Energy Capital Management LLC.

Spokesman Jay Averill told NGI'sShale Daily on Monday that he could not provide comment on "specific assets as we go through the process." However, "we are testing the market in a few different areas...

"Given our focused investment on a limited number of plays, divestitures likely will be one way we realize value out of our massive base of assets. We can be at various stages of negotiation on a number of assets at any given time."

Encana is investing in only five onshore properties in North America this year and Jonah isn't one of them. The five oily plays drawing the cash are Canada's Montney formation and Duvernay Shale, as well as the Tuscaloosa Marine Shale, Denver-Julesberg Basin and San Juan Basin (see Shale Daily, Feb. 13). The strategy makeover was launched in November, taking the company from funding about 30 onshore targets, mostly gas-weighted, to five. A bundle of onshore assets is on the market, and Encana also is rumored to be selling its stake in the Deep Panuke gas platform offshore Nova Scotia.

The legendary Jonah field in southwest Wyoming's Lance formation contains vertically stacked sands that exist at depths of 8,500-13,000 feet. At the end of 2012 Encana controlled about 105,000 net acres (118,000 gross). Historically, Encana has targeted the over-pressured core of the field, where it has been planning to use 10-acre spacing for its wells. Encana also owns about 104,000 net acres (116,000 gross) outside of the core holdings, where 40-acre and 20-acre drilling potential exists.

Encana management never has been averse to using joint ventures (JV) to help pay drilling costs. Two years ago it partnered with Exaro Energy III LLC, which agreed to invest $380 million over five years to earn a one-third working interest in 5,760 net acres in Sublette County, WY (see Shale Daily, April 10, 2012). Encana also has existing JVs to develop other portions of Jonah.

Encana primarily has used third-party funds to drill wells in Jonah. Before the pullback in gas drilling, it had expected to drill 121 net wells using third-party funds under existing arrangements.

The impact of lower natural gas prices, which has stymied the Calgary producer and others for the past three years, is been evident in slowing Jonah production. In 2012 Encana produced 411 MMcf/d, versus 471 MMcf/d in 2011. Including oil and natural gas liquids, Jonah production was 491 MMcfe/d in 2011, versus 559 MMcfe/d in 2010 and 601 MMcfe/d in 2009.