Encana to Sell Its Haynesville Natural Gas Assets for $850M

Encana Corporation

announced today that its wholly-owned subsidiary, Encana Oil & Gas (USA) Inc., has reached an agreement to sell its Haynesville natural gas assets, located in northern Louisiana, to GEP Haynesville, LLC (GeoSouthern), a joint venture formed by GeoSouthern Haynesville, LP and funds managed by GSO Capital Partners LP.Total cash consideration to Encana under the transaction is US$850 million. In addition, through the transfer of current and future obligations, Encana will reduce its gathering and midstream commitments, which will be substantially complete through 2020, by approximately US$480 million on an undiscounted basis. Further, Encana will transport and market GeoSouthern's Haynesville production on a fee for service basis for the next five years.Encana will use the total cash consideration to reduce its net debt, further strengthening its balance sheet.Consistent with its strategy, Encana remains focused on growing high margin production. Over 80 percent of 2015 capital will be invested in the company's four most strategic assets in the Permian, Eagle Ford, Duvernay and Montney. During the first half of 2015, Encana's Haynesville assets produced an average 217 mmcf/d, contributed approximately 9