CALGARY – Encana Corp. (TECA) has agreed to sell some formerly prized oil and gas assets in Colorado for about US$900 million cash to a partnership headed by Canada Pension Plan Investment Board.
The deal includes 51,000 acres of land (200 square kilometres) in northeastern Colorado in the Denver Julesburg Basin.
The lands produce a combination of natural gas, crude oil and other liquids and has reserves estimated at the equivalent of 96.8 million barrels of oil.
CPP Investment Board, which manages funds for the Canada Pension Plan, will own 95 per cent of the DJ Basin assets and the Denver-based Broe Group will own five per cent.
Calgary-based Encana has been selling off non-core assets in the face of persistently low oil and gas prices. The company’s strategy is to focus on four producing areas, two in Western Canada and two in Texas.
Encana says that the sale of the Colorado assets will increase the total cash it has raised from various divestitures in 2015 to about US$2.7 billion, used largely to reduce the company’s debt.
The Toronto-based CPPIB manages a fund that was worth about C$268.6 billion as of the end of June, on behalf of the Canada Pension Plan’s contributors and beneficiaries.