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Encana looking for buyers, seeks to exit Haynesville

Encana Corp is looking to tighten its portfolio to focus on its key areas in Texas and Canada, but that means getting rid of assets which don’t fall within those areas. Unfortunately, that includes the company’s acreage in the Haynesville Shale.

According to Bloomberg, sources have stated that the Canada-based company is looking for prospective buyers for its Louisiana assets, which could be worth as much as $1 billion. The unnamed sources revealed that Citigroup Inc. has been begun soliciting offers from a variety of potential parties, including private-equity firms and exploration and production companies.

Although Encana has held its Haynesville properties since 2005, the gas-rich shale play seemingly doesn’t fit with its plan moving forward. A deal between Encana and Veresen Midstream LP was also completed this month, allowing Encana to offload its Canadian natural gas assets for about USD$375 million. Instead, Encana is homing in on oil production in the Eagle Ford and Permian Shale areas as well as the Montney and Duvernay Shale basins in Canada.

The move comes at an uncertain time in the oil and gas industry when commodity prices across the board sit abysmally low. While natural gas prices have been entangled in a lengthy game of limbo for several years after peak prices in 2008, the possibility of growth in the global liquefied natural gas market could make Haynesville assets a hot commodity in coming years. At the same time, oil’s continued struggle to regain ground after plummeting to less than half of its 2014 high are garnishing mixed outlooks throughout the market. Industry experts have hypothesized that oil could rise again as soon as the second half of 2015, while others still have speculated it will take years to see a significant increase in value.

In related news, Encana cuts budget after 85 pct fall in operating profit.

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