Encana, a Canadian oil and gas firm, announced today it will spend about $4.2 billion U.S. dollars to acquire a U.S.-based company that’s very active in Oklahoma’s STACK and SCOOP plays.
Encana said it also has agreed to pick up another $2.2 billion in debt held by Newfield Exploration Co. as part of the all-stock deal, which has been approved by the boards of directors of both companies.
Encana calls the acquisition strategic, saying it will create a multi-basin company active in both nations.
The deal still must be approved by shareholders of both companies and by regulators.
Encana expects the transaction to close sometime during the first quarter of 2019.
“This strategic combination advances our strategy and is immediately accretive to our five-year plan,” said Doug Suttles, Encana’s president and CEO, in a release announcing the agreement.
“Our track record of consistent execution gives us confidence to accelerate and increase shareholder returns. I am very excited to lead the combined company and want to congratulate the team at Newfield on doing a tremendous job building premium positions in the core-of-the-core in each of their assets, particularly in the world-class, oil-rich, STACK/SCOOP.
“When combined with our cube development model, expected synergies and relentless focus on efficiency, we are positioned to deliver highly efficient growth and quality returns.”
Lee Boothby, Newfield’s chairman, president and CEO, said he believes the proposed acquisition is “the best path forward.”
“The combination of the two companies provides our investors with the very attributes that should be differentiated in today’s energy sector — operational scale, proven execution in development of large, liquids-rich onshore resource plays, a peer-leading cost structure and an exceptionally strong balance sheet.”
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