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Ovintiv reportedly puts Eagle
Ford assets up for sale
TEXAS DENVER-BASED Ovintiv – which was for- process is reported to be in its early stages for
merly based in Calgary and known as Encana Ovintiv, buyers have been emerging for various
– has reportedly put its assets in the Eagle Ford shale assets in recent weeks and months, suggest-
shale up for sale. The story was reported by Reu- ing that there could be interest.
ters, which cited several people familiar with the At the end of 2019, the company held 517
matter. producing wells in the Eagle Ford with total
Ovintiv entered the Eagle Ford in 2014 oil output of 25,300 barrels per day (bpd). This
through a $3.1bn acquisition from Freeport would have subsequently been reduced as shale
McMoRan. In line with the devaluation of drillers dramatically scaled back output earlier
oil and gas assets in the subsequent years, it is this year – and Ovintiv has cut its 2020 capi-
Ovintiv entered the likely to sell the properties for considerably less. tal expenditure budget by $900mn compared
Eagle Ford in 2014 Indeed, Reuters cited one of the sources as saying with its original guidance. However, it recently
through a $3.1bn the assets could fetch $600-700mn. reported that it had brought six new net wells
acquisition from Nonetheless, a sale could help the company online in the Eagle Ford in the third quarter of
Freeport McMoRan. pay down some of its debt, which stood at $7.1bn the year.
at the end of September. This aligns with com- The company did not provide third-quar-
ments made by Ovintiv’s president and CEO, ter production figures for the Eagle Ford
Doug Suttles, on the company’s third-quar- alone, saying overall output from all its assets
ter earnings call about debt reduction being a totalled 510,200 barrels of oil equivalent per day
priority. (boepd), with oil accounting for 138,900 bpd of
Ovintiv is one of a number of shale players this. Ovintiv does not consider the Eagle Ford
turning to asset sales in order to raise cash amid to be a core asset – with those consisting of its
an industry slump exacerbated by the corona- Permian Basin, Anadarko Basin and Montney
virus (COVID-19) pandemic. And while the play operations.
PERFORMANCE
US Gulf lease sale fetches
over $120mn in high bids
GULF OF MEXICO THE US Bureau of Ocean Energy Manage- oil prices, the sale generated more interest than
ment (BOEM) announced on November 18 expected. The figure for total high bids marked
that Lease Sale 256 in the Gulf of Mexico gen- an increase from $93mn in the previous lease
erated $120.8mn in high bids for 93 tracts cov- sale, which was held in March.
ering 517,733 acres (2,095 square km) in federal The apparent high bid of the sale was almost
waters. A total of 23 companies participated in $12mn, made jointly by Norway’s Equinor and
the lease sale, according to the agency, submit- Spain’s Repsol for an ultra-deepwater block
ting a combined $135.5mn in total bids. in the Walker Ridge area, at water depths
The lease sale included 14,862 unleased of more than 5,250 feet (1,600 metres). The
blocks located between 3 miles (4.8 km) and 231 second-highest apparent bid came from BP,
miles (372 km) offshore, spanning the Gulf’s at $7mn offered for a block in the deepwater
Western, Central and Eastern planning areas. Green Canyon area offshore Louisiana. BP was
The blocks were located in water depths ranging also the apparent winner of several blocks in
from 9 feet (2.7 metres) to more than 11,115 feet Mississippi Canyon.
(3,388 metres). The BOEM will take around 90 days to eval-
The sale had originally been scheduled for uate all bids and ensure that they are fair market
August, but was delayed in order to allow for value prior to confirming them.
additional time for oil and gas market analysis Also this week, the BOEM proposed offering
given the coronavirus (COVID-19) pandemic, roughly 78.2mn acres (316,464 square km) in
according to the BOEM. And despite the chal- the next Gulf lease sale, which is scheduled for
lenges posed by the pandemic and its impact on March 2021.
Week 46 19•November•2020 www. NEWSBASE .com P15