Calgary-based natural gas producer Encana announced a $5.4-billion joint venture deal with PetroChina Wednesday in which the Chinese state oil company will take a half interest in Encana's Cutbank Ridge properties in northern B.C. and Alberta.
"This agreement is the culmination of more than nine months of discussions between PetroChina and Encana and represents both a significant achievement and major milestone in the developing relationship of our two companies," Encana CEO Randy Eresman said in a release.
PetroChina's stake represents current daily production of about 255 million cubic feet equivalent per day, proven reserves of about 1.0 trillion cubic feet of natural gas equivalent and about 257,000 net hectares of land straddling the British Columbia and Alberta boundary.
The transaction is subject to regulatory approval by Canadian and Chinese authorities.
This is Encana's second move to attract Chinese investment. In June, it announced it had reached a memorandum of understanding with the state-owned China National Petroleum Corp. for a joint venture to develop other natural gas fields properties in northeast British Columbia. In March, it signed a similar agreement with state-owned Korea Gas Corp.
Encana made its announcement after markets closed.
Its shares closed down 60 cents, or close to two per cent, at $30.65 on the Toronto Stock Exchange Wednesday.