MONTREAL: Canadian energy company Encana yesterday said it has agreed to buy Texas’s Athlon Energy for $7.1bn, in a bid boost the Calgary-based natural gas producer’s shift into oil.
Encana would pay $5.93bn in cash for the US company, as well as assume $1.15bn of Athlon’s debt.
The proposed price, $58.50 a share, is 25 percent higher than Athlon’s Friday closing price on the New York Stock Exchange of $46.73. Athlon produces 30,000 barrels of oil equivalent per day in the Permian basin, a key oil-producing region in western Texas.
Encana hopes to meet its target of generating up to 75 percent of operating cash flow from liquids production, including oil and natural gas liquids, next year instead of 2017. Encana started as a natural gas producer but it has been shifting its priorities toward oil as the North American gas market has become saturated with the boom in shale gas. AFP
