Encana Corporation (USA)(NYSE:ECA) is seeking buyers for Haynesville gas properties in Louisiana as it concentrates on drilling for oil and other liquids in Canada and Texas. Citigroup Inc (NYSE:C) is looking offers for Haynesville Shale basin, valued at almost $1 billion. The bank has commenced reaching out to potential buyers, private-equity firms and energy explorers.
Encana is selling gas assets to better concentrate on drilling for liquids and oil. It said earlier in the month it concluded the sale of some assets in Canada in a deal valued at C$461 million to Veresen Midstream LP. The company also made a big entry into the oil-rich Permian in 2014 when it purchased Athlon Energy Inc (NYSE:ATHL) for $6.8 billion. It is clear from the recent operations of Encana that it wants to sell off the less important assets and concentrate on limited areas so as to improve the productivity in tough economic environment.
Encana bought its first Haynesville lease in year 2005. It holds over 350,000 acreas in the area. Royal Dutch Shell Plc approved in 2014 to liquidate its half of a Haynesville JV with Encana Corporation to Vine Oil & Gas LP in a deal valued at $1.2 billion. In this year, the company intends to spend 80% of its drilling budget in as much as four areas. These four areas are the Duvernay and the Montney Shale basins of Canada, and the Permian and Eagle Ford Shale basins in Texas.
April has been a hectic month for Encana as it raised almost $2 billion in cash to enhance its financial flexibility. The additional cash was must as the market conditions remain weak. The raised capital is huge amount and it seems the company is taking the right measures so that it can deal with the existing market malaise.