EnCana cuts Haynesville stake sale

Canadian giant EnCana said it had drastically reduced the amount of acreage in the Haynesville Shale play it was offering in a farm-out opportunity after seeing better-than-expected drilling results.

EnCana and Anglo-Dutch supermajor Shell had been offering up to a 50% stake in 134,000 acres that the pair jointly control in the shale play, which stretches across eastern Texas and north-western Louisiana.

But recent drilling has led the companies to scale back the offering to just 30,000 acres.

“As time has gone on the drilling results have been very encouraging and we believe the core of play has moved south,” Paul Sanders, EnCana’s vice president of the mid-continent business unit, said during a conference call with investors.

“We are starting to like a lot of the position we had marketed so we whittled that down to about 30,000 acres.”

The assets were in portions of the field in Texas that had not seen as much drilling activity as those in Louisiana when the two companies offered the stake last year, Jeff Wojahn, EnCana’s president for its US division, said during the call.

EnCana currently has eight rigs working in the Haynesville area, but it could have as many as 15 spinning there by the end of the year to ensure that it can hold its recent lease purchases with production, Sanders said.

A Shell representative could not immediately be reached for comment.