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Strategies & Market Trends : Speculating in Takeover Targets
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To: richardred who wrote (3494)3/31/2014 9:13:21 AM
From: richardred   of 6850
Encana Sells Jonah Field Assets to TPG for $1.8 Billion
By Jim Polson - Mar 31, 2014
Encana Corp. (ECA), Canada’s largest natural gas producer which is seeking to boost investor returns by shifting to oil, said it will sell its Jonah field operations in Wyoming to private-equity fund TPG Capital for $1.8 billion.

Encana’s Jonah field assets comprise about 24,000 acres and more than 1,500 active wells, the Calgary-based company said today in a statement. Their estimated year-end proved reserves in 2013 were about 1.49 billion cubic feet equivalent.

Doug Suttles, who became chief executive officer in June, promised last year to prune assets and jobs, focusing on five areas that yield oil and natural gas liquids. Jonah was not among them.

“This transaction is consistent with our strategy,” Suttles said in today’s statement. “We are unlocking value from a mature, high-quality asset.”

Last month, Suttles said he was betting on interest from private-equity firms as the company tests the market for asset sales.

“Probably the biggest shift is that there is a lot of private equity focus in the industry right now,” Suttles said in a Feb. 13 interview. “I’m sure they would be interested in some of the assets we have.”

Second Quarter TPG, a Fort Worth, Texas and San Francisco-based private-equity firm led by David Bonderman, manages more than $59 billion of capital. Its current investments include Del Monte Foods Co., casino operator Caesars Entertainment Corp. and health-care data provider IMS Health Holdings Inc., which filed this month to go public.

The deal is expected to close in the second quarter, with an effective date of Dec. 1, 2013. Evercore (EVR) and Davis Graham & Stubbs LP advised Encana. Vinson & Elkins LLP advised TPG.

TPG expects to retain Encana employees at Jonah and plans to continue investment in the field, the statement showed. The sale also includes more than 100,000 undeveloped acres adjacent to Jonah.

The announcement was made before regular trading began on North American markets. Encana shares have risen 24 percent this year
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