EnCana Corporation has reached agreement on a transaction with Bonavista Energy Trust encompassing approximately 409,000 net acres of non-core natural gas and oil producing properties for approximately $632 million (C$707 million).

Current production on these lands is approximately 60 million cubic feet of natural gas equivalent per day, after royalties (approximately 68 million cubic feet of natural gas equivalent per day before royalties). Production from the assets is about 80 percent natural gas and EnCana retains a lessor royalty on the majority of the lands. The transaction includes properties known as the Hoadley trend which covers an expansive area in west-central Alberta located west of Red Deer, running from Caroline north to the Pigeon Lake area just south of Edmonton.

"This sale reflects our ongoing efforts to high-grade our portfolio of producing assets and it represents a substantial portion of our 2009 divestiture target of between US$500 million and $1 billion. We continue to look for other opportunities for divestitures and acquisitions to improve the long-term value creation capacity of our extensive North American unconventional resource portfolio," said Randy Eresman, EnCana's President & Chief Executive Officer.

This sale has an effective date of April 1, 2009 and is subject to typical closing conditions and regulatory approvals. It is expected to close in the third quarter of 2009. Tristone Capital acted as EnCana's financial advisor for the sale.

Tags: EnCana Corporation