Nucor Corporation (
) is up nearly 2% after announcing today that it has entered into a
long-term agreement with Encana Oil & Gas (
) Inc. (ECA.TO, ECA) - which is slightly higher - for an onshore
natural gas drilling program in the continental United States that
its believe "will ensure a reliable, low cost supply of natural gas
for our existing and expected future needs for more than 20
Under the terms of the agreement, Nucor will pay its share of
costs plus an additional amount of carried interest as each well is
drilled, subject to a cap on carry paid for each well and a cap on
total carried interest. Either party may suspend drilling if
natural gas prices fall below a predetermined threshold. Encana
will be the operator and will provide expertise to drill, complete
and operate the wells. This new agreement is in addition to an
earlier and smaller onshore natural gas drilling agreement with
Encana that was established in 2010.
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