Nucor Enters Long-Term Natural Gas Agreement With Encana

By Staff,

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Nucor Corporation ( NUE ) is up nearly 2% after announcing today that it has entered into a long-term agreement with Encana Oil & Gas ( USA ) 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 years."

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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Commodities
Referenced Stocks: NUE , USA

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