Canada-based Encana has wrapped up its previously announced $7.7bn acquisition of US oil and gas company Newfield Exploration.
Image: Encana and Newfield Exploration complete merger. Photo: courtesy of Encana Corporation.
The all-stock deal between Encana and Newfield Exploration, worth around $5.5bn, was announced in November 2018, under which the former also agreed to assume $2.2bn of the US firm’s net debt.
Earlier this week, the deal was approved by shareholders of both the companies to pave way for its closing.
In the enlarged company, shareholders of the Canadian firm will hold a stake of around 63.5% while the remaining 36.5% or so stake will be held by shareholders of the US firm.
Newfield Exploration is involved in the exploration, development and production of crude oil, natural gas and natural gas liquids (NGLs). Its US operations are onshore and focus mainly on large scale, liquids-rich resource plays in the Anadarko Basin of Oklahoma, the Williston Basin of North Dakota and the Uinta Basin of Utah.
The company also holds gas assets in the Arkoma Basin of Oklahoma. Outside the US, it has oil assets offshore China.
Through the acquisition, Encana adds nearly 360,000 net acres in the core STACK/SCOOP in the Anadarko Basin. Overall, the merger creates a major multi-basin company with large footprints in three of North America’s high-quality, oil and liquids weighted plays that include the Permian, STACK/SCOOP and Montney.
The enlarged company is expected to become the second largest producer of unconventional resources in North America liquids production making up more than 50% of total company production.
Encana president and CEO Doug Suttles said: “Our multi-basin portfolio provides tremendous investment optionality to deliver liquids growth and free cash flow to support the continued return of capital to shareholders. We welcome the team from Newfield to Encana.”
In December 2018, the Canadian company completed its $480m sale of its San Juan assets in New Mexico to Denver-based DJR Energy. The sold San Juan assets, which were considered non-core by the Canadian firm, are spread over 182,000 net acres and had an average production of around 5,400 barrels of oil equivalent per day of liquids in 2017.