Business

EnCana sells Alberta properties to StarPoint Energy Trust

EnCana Corp. continued its divestment program Monday, selling another package of oil assets to StarPoint Energy Trust for about $400M.

EnCana Corp. continued its divestment program Monday, selling a package of oil assets to StarPoint Energy Trust for about $400 million.

The properties in central and southern Alberta have the ability to produce more than 6,750 barrels of oil equivalent output a day. The sale is expected to close around June 30. It is not related to StarPoint's planned merger with APF Energy Trust.

Calgary-based EnCana (TSX:ECA) plans to sell off non-core assets as it focuses on its natural gas production in Western Canada and the U.S. Rockies. EnCana said that since the start of 2004, it had sold about 84,000 barrels of oil equivalent output a day.

The sales have generated about $6 billion for EnCana.

"Together with the 2004 sale of our U.K. North Sea assets and our recent agreement for the $2-billion sale of our Gulf of Mexico interests, EnCana is continuing to sharpen its focus on long-life North America resource plays where we expect to achieve reliable, profitable growth in reserves and production from unconventional gas and oil reservoirs," said Gwyn Morgan, EnCana's president and chief executive.

StarPoint plans to finance the deal by selling 16.4 million subscription receipts at $18 each, raising almost $296 million. Each receipt will be exchanged for one StarPoint unit when the deal is closed.

The underwriting syndicate of banks is led by BMO Nesbitt Burns.

The trust is also selling to the syndicate $60 million of 6.5 per cent convertible debentures, maturing in 2010.

EnCana shares fell 45 cents to $85.50 on the Toronto Stock Exchange.