Encana acquires Athlon Energy in Texas for $7.1B
Merger establishes Calgary-based energy producer in the Permian Basin.
Encana, an energy producer based in Calgary, said its growth areas now include the top two resource plays in Canada, the Montney and Duvernay, and the top two resource plays in the US, the Eagle Ford and the Permian.
The acquisition adds Athlon’s 140,000 net acres focused solely in the heart of the oil-rich Midland Basin to Encana’s portfolio, giving the company a seventh growth area.
“The Athlon team has built an exceptional asset with massive running room that includes greater than 10 years of drilling inventory with up to 11 potential productive horizons of high-margin liquids,” says Doug Suttles, Encana president and CEO.
Encana says the transaction will add about 30,000 barrels of oil equivalent per day (boe/d) based on Athlon’s current estimated production including its recent acquisitions, with potential for approximately 5,000 horizontal well locations and a recoverable resource of approximately 3 billion barrels of oil equivalent.
Encana intends to invest at least $1 billion in the play and ramp up from three to at least seven horizontal rigs by the end of 2015. The company says the Permian will play an important part within its growth portfolio, contributing significantly to company-wide projected 250,000 barrels per day (bbls/d) by 2017.