2013-01-04 15:37:45 - Encana to Divest its 49.9% Interest in Duvernay Play in Favor of PetroChina for US$2.2 Billion to Unlock the Value of the Assets - Deal Analysis - a new market research report on companiesandmarkets.com

Encana to Divest its 49.9% Interest in Duvernay Play in Favor of PetroChina for US$2.2 Billion to Unlock the Value of the Assets - Deal Analysis - PetroChina Company Limited (PetroChina), through its wholly-owned subsidiary Phoenix Duvernay Gas (Phoenix), has agreed to acquire a 49.9% working interest in approximately 445,000 acres of undeveloped land in the Duvernay play in west-central Alberta from Encana Corporation (Encana), for a purchase consideration of CAD2.18 billion (US$2.21 billion). Of the total consideration, Phoenix will pay CAD1.18 billion (US$1.2 billion) at closing and will pay the remaining CAD1 billion (US$1.01 billion) over the next four years in the form of a carry of half of Encana´s share of development capital.

The transaction is part of a

 

 

joint venture arrangement between Encana and Phoenix to explore and develop Encana´s extensive undeveloped Duvernay land holdings. Under the joint venture, Phoenix and Encana plan to invest a total of CAD4 billion (US$4.1 billion) in new drilling, completion and processing facilities. Following the transaction, Encana will remain the operator with a 50.1% interest in the Duvernay undeveloped land, while its joint venture partner Phoenix will hold a 49.9% working interest. RBC Capital Markets, LLC is acting as financial advisor, while Burnet, Duckworth & Palmer LLP is acting as legal advisor to Encana in the transaction.

Scope

- Rationale behind PetroChina´s subsidiary acquiring 49.9% interest in 445,000 acres in Duvernay Play, West-Central Alberta, from Encana.
- To understand the rational behind PetroChina acquiring Duvernay assets to boost its future plan of exporting LNG from Canada.
- Geography Covered- Canada.

Reasons to buy

- Develop a sound understanding about Encana divesting its stake in favor of PetroChina to unlock the value of its assets in Duvernay according to its business strategy.
- To know more about Encana maintaining a trend of entering into joint ventures, farm-outs and divestments for developing its assets.
- To have an understanding about PetroChina having a trend of inorganic growth.

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