TPG Capital, a US-based private equity firm, is launching a new oil and gas platform to manage the natural gas properties it is acquiring in Wyoming from Encana Oil & Gas for $1.8 billion.
Encana Oil and Gas, the US subsidiary of Encana, a Canadian energy company, has agreed to sell its Jonah Field operations, which comprise a total productive area of about 24,000 acres and over 1,500 active wells, Encana said in a statement.
The transaction also includes over 100,000 undeveloped acres adjacent to Jonah known as the Normally Pressured Lance area.
“With the divestment of Jonah, we are unlocking value from a mature, high-quality asset and allowing our teams to focus on our five core growth areas and continue with execution of our new strategy,” Encana president and chief executive Doug Suttles said.
“The Jonah field is a world-class, low-risk resource with long reserve life and future drilling opportunities that will be a strong platform to continue to grow a portfolio of cash flow-producing assets,” said Tom Hart, chief executive of the new TPG platform being formed to pursue this investment.
Craig Manaugh will serve as president and chief operating officer of the new company.
TPG expects to retain the employees working in connection with the Jonah field and will continue to invest in those properties as well as in adjacent acreage, according to the statement.
The sale of Encana’s assets is expected to close in the second quarter of 2014 with an effective date of December 1, 2013.
Founded in 1992, TPG has experience with global public and private investments across a range of sectors, executed through leveraged buy-outs, recapitalisations, spin-outs, growth investments, joint ventures and restructurings. It has more than $59 billion in assets under management.
Alberta-based Encana is a leading North American energy producer. It is listed on the Toronto and New York stock exchanges.