Cutbank Ridge Resource Play Development
Encana began assembling lands in Cutbank Ridge in early 2002 and for over a decade, it systematically and methodically explored, defined and developed the assets it acquired. In February 2012, Encana entered into a partnership agreement with Mitsubishi for the development of certain undeveloped Cutbank Ridge lands in British Columbia. Under the agreement, Encana owns 60 percent and Mitsubishi owns 40 percent of Cutbank Ridge Partnership. The transaction closed on February 24, 2012.
About This Project
Encana holds approximately 1.15 million next acres in the Cutbank Ridge resource play, which spans across northeast British Columbia and northwest Alberta, and consists of gas production from the Montney, Cadomin and Doig geological formations. State of the art technology and drilling techniques have been used to produce natural gas from the formation.
Under the partnership agreement between Encana and Mitsubishi, Mitsubishi initially invested approximately C$1.45 billion at the closing of the transaction on February 24, 2012. Pursuant to the agreement, Mitsubishi will further invest approximately C$1.45 billion, in addition to its 40 percent of the partnership's future capital investment, for a commitment period which is expected to be about five years. The assets subject of the partnership agreement include, among others, approximately 409,000 net acres of undeveloped Montney lands in British Columbia. Encana is the managing partner and operator of the partnership. The transaction does not include any of Encana's current Cutbank Ridge production of about 600 million cubic feet of natural gas per day, processing plants, gathering systems or Alberta's landholdings.
The Montney geological formation is part of Cutbank Ridge resource play that spans northeast British Columbia and northwest Alberta. The Montney formation has produced natural gas since 1998 and Encana has been active in the area for over a decade. Production in the Montney occurs thousands of metres below the surface, through the use of horizontal drilling and multi-stage hydraulic fracture stimulation. Future drilling will tap the 300-metre-thick, multi-stack zone within Montney lands. It is one of the most active plays in British Columbia.
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