Deal Insight
Encana makes bold move into the Permian with US$7.1 billion Athlon Energy acquisition
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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.
Table of contents
- 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
Tables and charts
This report includes 11 images and tables including:
- Executive summary: Table 1
- Acquired acreage from Athlon by Wolfcamp sub-play
- Upstream assets: Table 1
- Oil & gas pricing and assumptions: Table 1
- Oil & gas pricing and assumptions: Table 2
- 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
What's included
This report contains:
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