Calgary-based Encana Corp. said everything remains on track for the $900 million sale of its Denver-Julesburg (DJ) Basin assets, even though closing has been delayed by as much as six months.

Subsidiary Encana Oil & Gas (USA) Inc. in October agreed to sell the DJ portfolio to Crestone Peak Resources, owned by the Canada Pension Plan Investment Board (95%) and The Broe Group (5%) (see Shale Daily, Oct. 8). The plan was to close the sale by the end of this year to improve the balance sheet. Encana on Tuesday affirmed that the transaction still is a go, but it won’t be completed until the second quarter of 2016.

“Encana and Crestone Peak Resources remain committed to closing this transaction, and Crestone Peak Resources has increased its deposit,” Encana executives said. “Material terms of the transaction, including the purchase price, remain unchanged.” Management offered no reason for the delay.

The sale includes all of Encana’s DJ acreage in Colorado, comprising 51,000 net acres. During the first half of this year, the Colorado acreage produced an average of 52 MMcf/d natural gas, as well as 14,800 b/d of crude oil/liquids. Based on Encana’s development plan at year-end 2014, estimated proved reserves were 96.8 million boe, more than 40% weighted to gas.

Encana earlier this month said 2016 capital expenditures (capex) would be reduced by 25% to $1.5-1.7 billion, down $600,000 from 2015. Spending could be “scaled up or down and redirected based on market conditions,” CEO Doug Suttles said during a conference call (see Shale Daily, Dec. 14).

The delay in closing the DJ sale may cause some near-term concern, heightening investors’ views that the company should spend within cash flow in 2016, said analysts with Tudor, Pickering, Holt & Co. (TPH). TPH expects Encana’s capex to come in at the low end of the forecast, based on $2.75/Mcf Henry Hub and $50.00 West Texas Intermediate. Encana’s 2016 cash flow is estimated by TPH at $765 million, based on strip prices.