Encana sells Clearwater CBM assets to Ember Resources for US$541 million

Report summary

Drilling efficiencies and economies of scale have brought Encana's well costs down to just Cdn$300,000, which results in a breakeven price of US$4.19/mcf for a well with an IP rate of 0.1 mmcfd. Ember cites a lower Horseshoe Canyon CBM well cost of Cdn$200,000, lowering the breakeven price to US$3.63/mcf. Even more attractive is the opportunity to recomplete existing wells into the Horseshoe Canyon Formation. Ember will need to capture this upside in order to justify the deal price.