Ovintiv Divests 44,000 Gross Acres of Eagle Ford Shale Assets in South Texas
Denver-based Ovintiv Inc. has entered into an agreement with privately-held Validus Energy to divest its interests in approximately 44,000 gross acres of Eagle Ford Shale assets in South Texas, for a total consideration of US$880 million.
The assets include 42,000 net acres of Eagle Ford Shale assets located in Karnes County, Texas. The acreage is 100% developed and contains a total of 531 gross (495 net) producing wells. There is significant upside due to close proximity to markets and a well-developed infrastructure, including production facilities and pipelines. The properties have a current average daily production of approximately 28.1 thousand barrels of oil equivalent per day (Mboe/d), 82% of which is liquids. Production for 2021 is estimated to be approximately 21 Mboe/d.
“Today’s Eagle Ford announcement continues our track record of unlocking value from non-core assets. Proceeds will significantly accelerate the achievement of our debt reduction target and allow us to pay off near-term debt maturities with cash on hand,” said Doug Suttles, CEO of Ovintiv.
Ovintiv, formerly Encana Corp., is dual-listed on the NYSE and TSX, and is focused on E&P ,and marketing of oil and natural gas in Canada and the United States, with core operations located across the Duvernay and Montney formations in Alberta and British Columbia, the STACK play in Oklahoma, and the Permian and Eagle Ford formations in Texas. The company was formed in January 2020 after Encana completed a corporate reorganization that included a move in domicile from Canada to the United States and rebranding under the name “Ovintiv.”
Denver-based Validus Energy is focused on the acquisition and exploitation of upstream oil & gas assets in the United States, with a primary focus on a large-scale portfolio of producing wells and drilling locations in the Eagle Ford Shale in Texas.
The transaction is subject to customary closing conditions, including receipt of regulatory approvals, and is expected to be completed in Q2 2021.