Caerus to buy Encana’s Piceance assets for $735 million

Caerus Oil & Gas LLC, Denver, has agreed to acquire gas assets in the Piceance basin of northwestern Colorado from Encana Oil & Gas (USA) Inc., a wholly owned subsidiary of Calgary-based Encana Corp., for $735 million in cash.

The assets include 550,000 net acres of leasehold and 3,100 operated wells that produced 240 MMcfd of gas and 2,178 b/d of liquids in the first quarter. Estimated yearend 2016 proved reserves were 814 bcf of gas equivalent.

Encana also will reduce its midstream commitments by $430 million on an undiscounted basis and market Caerus’ production from the assets. Encana last year also exited the nearby DJ basin by selling its 51,000 net acres to Crestone Peak Resources.

Caerus’ existing Piceance operations include 800 producing wells and 2,000 future drilling locations (OGJ Online, Feb. 6, 2013).

The deal, effective Jan. 1, is expected to close during the third quarter.

Contact Matt Zborowski at matthewz@ogjonline.com.

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