Encana exits northern Louisiana shale
HAYNESVILLE, August 25, 2015 – Canadian energy producer Encana is selling its Haynesville Shale gas assets to the US’ GeoSouthern Energy Corporation for $850 million, signalling its exit from northern Louisiana.
The operator will use funds from the deal to pay down debt. GEP Haynesville, a joint venture of GeoSouthern and private equity firm GSO Capital Partners, will take over 112,000 net acres (453 square kilometres) of the Haynesville Shale gas area. The sale is set to close in the fourth quarter of 2015.
The acreage, which for its most part covers the DeSoto and Red River parishes, includes 300 operated wells, with estimated proved gas reserves at the end of 2014 pegged at 20.4 bcm (720 bcf) equivalent.
“Through the transfer of current and future obligations, Encana will reduce its gathering and midstream commitments, which will be substantially complete through 2020, by approximately $480 million on an un-discounted basis,” Encana has said of the deal with GeoSouthern, adding that it would transport and market GeoSouthern’s Haynesville output on a fee-for-service basis over the coming five years.
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