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Encana trims Arkoma assets from portfolio

US independent sells off Newfield properties for $165m

Canadian independent Encana plans to offload Oklahoma properties acquired in its $7.7 billion takeover of Newfield Exploration which was completed earlier this year.

The company has signed an agreement to sell its recently purchased assets in the Arkoma basin in the eastern part of the state to an undisclosed buyer for $165 million in cash. The deal is expected to close later in the third quarter of this year.

The assets to be sold include about 140,000 net acres of leasehold and current production of approximately 77 million cubic feet equivalent per day, 98% of which is natural gas.

The Arkoma has been producing for more than 100 years and has traditionally been targeted for its deep gas reservoirs. However, producers are starting to move into the liquids-rich fairway using modern drilling and completions techniques.

The sale follows Encana's decision to end Newfield's production sharing contract with the the Chinese National Offshore Oil Corporation (CNOOC). Encana expects to terminate the agreement and handover operation to CNOOC on 31 July.

"Along with our recently announced agreement to exit China, this transaction shows our commitment to realise value from non-core assets," Encana chief executive Doug Suttles said.

Proceeds from the sale will go to the company's balance sheet, he added.

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