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Canadian oil and gas producer Encana is reportedly planning to sell off more major shale assets in western Canada, after the company reported earlier this month major loss for the year’s first quarter and fall of revenue.
Encana, the second-largest gas producer in North America, is looking to sell its Godondale assets in the Montney Basin, which the company is developing in a joint venture with Mitsubishi Corporation. These assets could fetch up to US$774 million.
Even though the company failed to comment on reports of the potential sale, media has noted that it has a Montney basin presentation to investors scheduled for 17 May.
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Last year, the company unloaded $2.8 billion in assets and is preparing to sell an additional $1 billion in projects. Still, as of last quarter, the company had roughly $19 billion in assets.
The assets it divested last year included its Denver Julesburg holdings for US$900 million and acreage in the Haynesville shale for US$850 million.
In early May, Encana reported a US$379-million net loss for the first quarter as revenue fell 40 percent compared with the same time last year. It reduced drilling and completion costs in its core assets during the quarter by between 22% and 44% from year-earlier levels. It had a US$1.71-billion loss, also mainly due to asset write-downs.
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Encana is also reportedly planning to sell other North American assets, including the Deep Panuke offshore gas field in Nova Scotia, Horn River and Wheatland assets in western Canada, natural gas assets in the Piceance basin in Colorado, San Juan assets in New Mexico and Tuscaloosa Marine Shale assets in Mississippi and Louisiana.
The fire sale is now prompting some analysts, such as the Motley Fool, to speculate that Encana is done with Canada altogether—or, more specifically, that it’s done with western Canada’s shale assets and might refocus on oil.
By James Burgess of Oilprice.com
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Charles is a writer for Oilprice.com