Your TMS Information Source Since 2012

Have a TMS tip? Share it here and keep up with latest on our Facebook Page or Twitter!


Encana Acquires Athlon Energy - Permian Basin Assets

Posted by bernell on September 29, 2014

For our purposes, here's what is happening.

EnCana is buying Athlon Energy and its Permian Basin holdings for $7.1 billion and is committing to spending $1 billion drilling wells in the play in 2015.

Excerpts from the news release read, "The acquisition will add Athlon's land position of approximately 140,000 net acres focused solely in the heart of the oil-rich Midland Basin to Encana's portfolio, giving the company a seventh growth area."

And, " In 2015, Encana intends to invest at least $1 billion of capital in the play and ramp up from three to at least seven horizontal rigs by year-end 2015. The Permian will play an important part within Encana's growth portfolio..."

And, a portion of a quote from CEO Doug Suttles, "'...Our growth areas now include the top two resource plays in Canada, the Montney and Duvernay, and the top two resource plays in the United States, the Eagle Ford and the Permian.'"

Last November EnCana announced its intent to focus its efforts on just a few plays and to grow its oil resource assets. This focus resulted in only 5 remaining plays where the company was active.  The TMS made the cut as an "emerging play" with a lot of promise.

True to the plan, EnCana has divested itself of several billion dollars in assets while along the way acquiring acreage in the Eagle Ford area, such that prior to this acquisition the company was involved in 6 plays and had only $500 million in debt, down significantly from the beginning of the year.

The Permian Basin will be a 7th play for EnCana to be operating.

By acquiring this asset and planning to spend $1 billion there in 2014 coupled with its earlier purchase this year of Eagle Ford assets and resultant capital required to fully develop that asset, the question now is does EnCana wish to continue developing the TMS?

Maybe we will learn an answer to this question later today. 

For now, here's a link to the news release.

And to read the slide presentation, is a link:

Nothing appears to have been mentioned about the TMS in any of the materials...I don't mind flying under the radar and being treated as an underdog...After all, I am a Mississippi State fan.

But, I just hope ignoring the TMS for now doesn't translate into lesser funding and focus for 2015. 

We shall see.

What do you think about it?