Encana seeking buyers for Louisiana gas properties

Matthew Monks  Bloomberg News Published Monday, Apr. 20 2015, 12:40 PM EDT

Last updated Monday, Apr. 20 2015, 2:15 PM EDT

Encana Corp. is seeking buyers for its natural gas properties in Louisiana as it focuses on drilling for oil and other liquids in Texas and Canada, people with knowledge of the matter said.

Citigroup Inc. is soliciting offers for Encana’s Haynesville Shale basin acreage, valued at as much as $1-billion, said the people, who asked not to be identified because the information is private. The bank has begun reaching out to private-equity firms, energy explorers and other potential buyers, the people said.

A spokesman for Calgary-based Encana declined to comment, as did a spokesman for Citigroup. Encana’s shares rose 4.3 per cent as of 11:30 a.m. in Toronto, giving the company a market value of almost $14-billion.

Encana is unloading gas assets to better focus on drilling for oil and liquids such as condensate. It said this month it completed the sale of some gas-gathering assets in Canada for C$461-million to Veresen Midstream LP. It made a big push into the oil-rich Permian last year when it acquired Athlon Energy Inc. in a deal valued at $6.8-billion.

The company, which acquired its first Haynesville lease in 2005, holds more than 350,000 acres in the area, according to its website. Royal Dutch Shell PLC agreed last year to sell its half of a Haynesville joint venture with Encana to Vine Oil & Gas LP for $1.2-billion.

This year, Encana plans to spend 80 per cent of its drilling budget in four areas: the Eagle Ford and Permian Shale basins in Texas, and the Montney and Duvernay Shale basins of Canada, according to a company presentation.