May 19, 2020
Encana set to acquire Newfield Exploration in US$5.5bn deal
Calgary-based petrochemical company Encana Corporation announced on 1 November that it has agreed to purchase Newfield Exploration in a deal worth US$5.5bn
Encana will acquire all outstanding shares of Newfield in the all-stock transaction, with the deal expected to close early next year.
The acquisition will create a leading multi-basin firm with a significant footprint in the Permian, STACK/SCOOP, and Montney.
As a merged company, it will also become the second largest producer of unconventional resources in North America, with an annual synergy of US$250mn resulting from enhanced scale, cube development, and overhead savings.
“This strategic combination advances our strategy and is immediately accretive to our five-year plan,” said Doug Suttles, Encana President & CEO, in the firm’s statement announcing the acquisition.
“I am very excited to lead the combined company and want to congratulate the team at Newfield on doing a tremendous job building premium positions in the core-of-the-core in each of their assets, particularly in the world-class, oil-rich, STACK/SCOOP.
- TransCanada Corp to go ahead with CA$1.5bn expansion project
- Suncor Energy posts strong Q3 financial results
- The November issue of Business Chief North America is now live!
“When combined with our cube development model, expected synergies and relentless focus on efficiency, we are positioned to deliver highly efficient growth and quality returns.”
Lee K Boothby, Chairman, President, and CEO of Newfield, said the move was the most strategically viable way forward for the firm, offering investors a far stronger combination of attributes.
“We strongly believe that the synergies between these two organizations will create a dominant diversified resource player that is positioned to drive future value,” he said.