Tokyo-based Mitsubishi Corp. has signed a deal to invest approximately $2.9 billion for a 40% stake in Encana Corp. (TSX: ECA; NYSE: ECA)'s Cutbank Ridge Partnership.
The partnership holds about 409,000 net acres of Encana's undeveloped Montney-formation natural gas lands in the company's Cutbank Ridge resource play in northeast B.C.
"The agreement we announced this morning with Mitsubishi Corp. to jointly develop our B.C. Cutbank Ridge undeveloped lands represents a major step forward in our plans to unlock the tremendous value contained in our asset base," said Randy Eresman, Encana's president and CEO, in a conference call Friday.
Eresman said the deal is expected to close later this month.
Encana previously announced a joint venture with PetroChina International Investment Co. to develop Cutbank Ridge. However the parties called off the $5.5 billion deal in June 201l.
At the time, Encana said that the parties "were unable to achieve substantial alignment with respect to key elements of the proposed transaction, including the joint operating agreement."
As of press time, Encana's stock was up nearly 3% to $20.73.
See next week's edition of Business in Vancouver for how a supply glut is damaging B.C.'s natural gas industry.
