Encana, one of Canada’s biggest producers of natural gas and oil, agreed on Monday to buy Athlon Energy Inc. for $5.9 billion in a move to gain a foothold in one of North America’s most oil-rich regions.
By acquiring Athlon — Encana‘s biggest since its creation in 2002 — the Canadian driller will add 140,000 net acres in the Permian basin.
Behind the deal is an effort by the Canadian energy company to continue moving away from natural gas, which has been plagued by stubbornly low prices, and into more lucrative oil production.
Monday’s deal is expected to add about 30,000 barrels of oil equivalent per day to Encana’s production capabilities. The company added that it expects the Permian basin to become an important part of its growth strategy going forward.
“This transformative acquisition further accelerates our strategy and provides us with a prime position in what is widely acknowledged as one of North America’s top oil plays,” Doug Suttles, Encana’s chief executive, said in a statement. “The Athlon team has built an exceptional asset with massive running room that includes greater than 10 years of drilling inventory with up to 11 potential productive h