Encana to complete acquisition and establish Permian Basin position

Source:Encana Corporation

Unconventional oil and gas: Encana to complete acquisition and establish Permian Basin position

Encana Corporation (Encana) (TSX: ECA) (NYSE: ECA) announced today that the cash tender offer (the "Offer") made by Alenco Acquisition Company Inc., Encana's indirect, wholly owned subsidiary ("Alenco Acquisition") to acquire all of the issued and outstanding shares of common stock of Athlon Energy Inc. (Athlon) (NYSE: ATHL) expired at midnight, New York City time on Wednesday, November 12, 2014 (one minute after 11:59 P.M., New York City time, on November 12, 2014). All shares that were validly tendered into the Offer and not validly withdrawn have been accepted for payment. Promptly following consummation of the Offer, Alenco Acquisition will be merged with and into Athlon, and Athlon will become an indirect, wholly owned subsidiary of Encana. Encana expects to complete the Offer and the merger today.

The completion of the previously announced US$7.1 billion acquisition of Texas-based Athlon gives the company a premier 140,000 net acre position in the oil-rich Permian Basin.

"We are pleased to close this transformative acquisition and look forward to welcoming the Athlon team into Encana. We are delivering on the portfolio promises we made for 2017, today," says Doug Suttles, President & CEO of Encana. "Consistent with our strategy, we have built a balanced and resilient portfolio that comprises high-quality oil, natural gas liquids and natural gas opportunities. Our growth areas now include the top two resource plays in Canada, the Montney and the Duvernay, and the top two resource plays in the United States, the Eagle Ford and the Permian."

Encana expects the acquisition will add current production of about 32,000 barrels of oil equivalent per day (boe/d). In 2015, Encana intends to invest at least $1 billion of capital in the play and ramp up from four to at least seven horizontal rigs by year-end.

The company sees the potential for approximately 5,000 horizontal well locations with potential recoverable resource of approximately 3 billion barrels of oil equivalent. The Permian is expected to contribute significantly to Encana's total liquids production which is projected to approach 250,000 barrels per day (bbls/d) by 2017.

Result of the Offer and Effectiveness of the Merger
On October 10, 2014, Alenco Acquisition commenced the Offer to acquire all of the issued and outstanding shares of common stock of Athlon at a price of US$58.50 per share, net to the seller in cash. The depositary for the Offer has advised that, as of the Offer's expiration, 88,025,770 shares of Athlon common stock have been validly tendered and not validly withdrawn pursuant to the Offer and 4,487,330 shares of Athlon common stock have been delivered by guarantee, which in total represents 91.3 percent of the shares on a fully diluted basis. Following consummation of the Offer, and as a result of Alenco Acquisition being merged with and into Athlon, any Athlon shares not tendered into the Offer will be cancelled and converted into the right to receive the same US$58.50 per share paid in the Offer. Following the merger, shares of Athlon common stock will cease to be traded on the New York Stock Exchange.

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