Exploration and production (E&P) company,
) declared the closure of 45,500 net acres of Eagle Ford
properties' acquisition from mineral explorer
Freeport-McMoRan Copper & Gold Inc.
). Encana paid roughly $3.1 billion in cash for the purchase.
Being Canada's largest natural gas producer, Encana's profits were
impacted negatively by a fall in
in the recent past that made the company restructure its asset base
with a focus on oil-producing resources. The latest deal
corroborates this shift.
The acquired Eagle Ford assets − situated at Karnes, Wilson and
Atascosa counties of south Texas - produced roughly 53,000 barrels
of oil equivalent per day (boe/d) during the first-quarter 2014.
Encana added that the contribution from the purchased resources has
doubled its current crude oil output. Moreover, the company
believes that the increase in production levels will in turn
generate higher cash flows and shareholder return in the near term.
Separately, Encana announced that it has completed most of the
previously declared sale of some non-core resources based in Leon
and Robertson counties of East Texas. From the divestment, Encana
got roughly $427.0 million out of the $530 million purchase price.
The company will likely receive the remaining amount by the third
quarter of 2014.
Encana is also planning to release its updated 2014 guidance,
considering the effect of all the completed transactions till now.
Calgary, Alberta-based Encana holds a highly competitive land and
resource position in a number of the region's most promising shale
and tight gas resource plays. This provides the company with a
low-risk, long-life and sustainable growth profile.
As a result, Encana currently holds a Zacks Rank #1 (Strong Buy),
implying that it is expected to significantly outperform the
broader U.S. equity market over the next one to three months.
One can also consider players in the same industry like
Ultra Petroleum Corp.
WPX Energy Inc.
). Both stocks sport the same Zacks Rank.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
FREEPT MC COP-B (FCX): Free Stock Analysis
ENCANA CORP (ECA): Free Stock Analysis Report
ULTRA PETRO CP (UPL): Free Stock Analysis
WPX ENERGY INC (WPX): Free Stock Analysis
To read this article on Zacks.com click here.