That includes approximately 409,000 acres of undeveloped natural gas lands in the Montney region near Fort Nelson. The two companies plan to jointly develop production in the area. The partnership does not include any of EnCana's current Cutbank production or its processing plants and gathering systems.
This announcement comes on the same day EnCana announced a fourth quarter net loss of almost $250 million. EnCana has been looking for investors in its Cutbank Ridge assets since the $5.4 billion deal with PetroChina fell through last summer.
Like Talisman, Encana president and CEO Randy Eresman says the company is looking towards developing oil and liquids-rich gas development and reducing dry natural gas investments.
"As we look to 2012 it's abundantly clear that continued reduction of natural gas drilling activity will be required to restore market balance," he said in a press conference, adding, "We continue to believe that the long-term future for natural gas remains promising, however until we see signs of sustainable recovery in prices, we will be reducing our pace of natural gas development and restricting production from some of our natural gas wells to preserve value."
EnCana is also in a partnership to build a liquefied natural gas plant in Kitimat, so LNG can be sold overseas at a much higher price.