Encana Corp. announced a joint venture arrangement with Phoenix Duvernay Gas, a wholly owned subsidiary of PetroChina, to explore and develop Encana's extensive undeveloped Duvernay holdings in west-central Alberta.
Terms call for Phoenix to gain 49.9% interest in Encana's 445,000 acres in the Duvernay play for $2.18 billion (Can.), and Encana is the operator of the joint venture.
Condensate currently supports the Duvernay shale play, which is still in the early stages of development (OGJ, Nov. 5, 2012, p. 32).
Encana has received $1.18 billion with the rest payable over the next 4 years in the form of a carry of half of Encana's share of development capital.
During this period, the venture partners plan to invest $4 billion total in drilling, completion, and processing.
Encana estimates that the Duvernay venture lands contain about 9 billion boe initially in-place. It has drilled nine wells into the Duvernay, has five producing wells, and currently has two rigs actively drilling more wells.
With the formation of this venture, Encana expects to more than double its planned pace of development in the Duvernay play, beginning in 2013.