Encana is an oil and gas company based out of Canada, but many people in Denver have become familiar with it over the years, as the headquarters for the U.S. operations are in the city. Additionally, the company has been working for a time in the Denver-Julesburg Basin, also known as the DJ Basin.
That’s all going to change, though, as it’s been announced that the company is going to sell off the oil field. The sale will go to both the Canada Pension Plan Investment Board, or the CPPIB, and to the Broe Group, which is already based out of Denver. Reports are that the sale is in the area of $900 million.
There are about 51,000 acres that will be part of the transaction. The Canada Pension Plan Investment Board is the primary buyer, as it will have a 95 percent interest when all is said and done. The Broe Group will control the other five percent.
This move will push Encana out of Colorado entirely. At the same time, though it may only be buying five percent, the Broe Group will continue its recent moves to invest in this industry, which have been notable lately. In a statement, the officials for the group noted that they were going to set up a company to operate in the basin, but that they had not done so yet, and they had not even named that company.
The sale of a business on a scale like this can be very complex, and it’s important for all parties to be fully aware of what legal steps have to be taken to make things official.
Source: Denver Business Journal, “Encana bails out of Colorado oil field in $900M deal with Denver firm,” Oct. 08, 2015