Encana sets final sale date for Weld County oil, gas assets | MyWindsorNow.com

Encana sets final sale date for Weld County oil, gas assets

Sharon Dunn
sdunn@greeleytribune.com

One of Weld County's top oil and gas producers is inching closer to dumping all of its assets in northeastern Colorado.

Encana, which announced last year its intention to sell all of its assets in the Denver-Julesburg basin to a newly created company, will rid itself of its northern Colorado holdings in the next month. The $900 million deal was originally set to be done by December 2015, but the company delayed it for six months to the end of June.

Now, they expect to put pen to paper by the end of July, according to a news release issued late Thursday.

The deal consists of 51,000 acres in northeastern Colorado, essentially all in Weld County, and its 3,000-plus wells. The new company, Crestone Peak Resources, is 5 percent owned by the Broe Group and 95 percent by Canada Pension Plan Investment Board.

"We are pleased to have finalized the details of the transaction and both Encana and Crestone are committed to closing the deal by the end of July 2016," said Doug Suttles, Encana President & CEO, in the release. "We are now focused on handover and transition items and are confident that we will conclude the transaction within the next four weeks."

The Broe Group is based in Denver. Together with its affiliates, Broe employs more than 1,000 people directly and provides employment for countless others through its Great Western Industrial Park in Windsor.

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The sale is back-dated a year to be effective April 1, 2015, and includes all of Encana's DJ Basin acreage, comprising 51,000 net acres, which hold roughly 1,600 producing wells. Spokesman Doug Hock said he couldn't discuss the details of the delays.

"Crestone remains committed to closing the acquisition of Encana's DJ assets in the coming weeks and we are excited to welcome Encana's DJ team into Crestone," Avik Dey, managing director and head of natural resources at Canada Pension Plan Investment Board, said in the release.

Hock said the deal not only transferred assets but also "the field employees plus a majority of the Denver folks," Hock said.

Encana hasn't actively drilled in Weld since the first quarter of 2015, Hock said.

Encana's DJ Basin assets were the original assets of the company when it formed out of a merger of two Canadian firms in 2002. For the past year, Encana began scaling back its capital spending in Colorado, concentrating its efforts in its Texas and Canada plays, where production is much greater. The company started the year with one rig drilling in the DJ, but dropped that in the spring. Hock said the company did have some plans to drill in the fourth quarter last year, but that changed when prices dropped in late 2014.

Encana in Denver

Encana officials plan to stick with their Denver offices, which serve as a hub for its U.S. operations. The company also has a field office in Firestone that houses about 80 employees. The company will focus on its four core oil and gas plays in Canada and Texas.

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