Encana and China National Petroleum Corporation Sign MOU to Jointly Develop Canadian Unconventional Natural Gas

Calgary-based Encana Corporation and China National Petroleum Corporation (CNPC) have signed a memorandum of understanding, formally called a heads of agreement, outlining a framework for the two companies to negotiate a potential joint-venture investment in the development of certain lands in Encana’s natural gas plays in Horn River, Greater Sierra and Cutbank Ridge in northeast British Columbia. Under a potential joint venture, Encana would be the operator of all developments, meaning it would drill and complete the wells, build the processing facilities and pipelines and conduct all field work for the joint venture. CNPC would invest capital to earn an interest in the assets and gain an advanced understanding of unconventional natural gas development through an ongoing sharing of technical knowledge. The companies expect that it will take several months to negotiate a joint venture. Encana is a natural gas producer focused on growing its portfolio of prolific shale and other unconventional natural gas developments. CNPC is a large Chinese oil and gas producer and supplier.