Deal insight
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9 Pages

Encana makes bold move into the Permian with US$7.1 billion Athlon Energy acquisition

Encana makes bold move into the Permian with US$7.1 billion Athlon Energy acquisition

Report summary

We value the deal at US$4.9 billion, which is significantly short of the consideration. There are a number of levers that could materially increase our valuation, including: 1) further downspacing; 2) de-risking of multiple Wolfcamp benches; 3) de-risking of the Spraberry and Clearfork; and 4) higher average EURs across the acquired acreage. Success here could move our valuation above the consideration paid. But the operational and geological challenges should not be underestimated.

What's included?

This report includes 1 file(s)

  • Encana makes bold move into the Permian with US$7.1 billion Athlon Energy acquisition PDF - 406.99 KB 9 Pages, 8 Tables, 3 Figures


The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
    • Modelling assumptions
    • Precedent transactions
  • Upsides and risks
    • Continuous strong well results
    • Multi-bench development and downspacing
    • Cost reduction
    • Production ramp-up
    • Pricing differential risk
  • Strategic rationale
    • Encana
    • Athlon
  • Oil & gas pricing and assumptions

In this report there are 11 tables or charts, including:

  • Executive summary
    • Executive summary: Table 1
  • Transaction details
  • Upstream assets
    • Acquired acreage from Athlon by Wolfcamp sub-play
    • Upstream assets: Table 1
  • Deal analysis
    • Upside to valuation - 500 mboe base case type curve
    • Upside to valuation - 600 mboe high case type curve
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Deal analysis: Table 3
    • Deal analysis: Table 4
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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