Canadian Encana expands its reach with $ 5 billion contract between Newfield and North America

(Reuters) – Encana Corp., a Canadian company, announced Thursday the purchase of $ 5.5 billion worth of Newfield Exploration Co, providing better access to North America's largest oil fields, making it country one of the largest producers of shale oil.

Encana will benefit from better access to the Anadarko Basin as well as to the Permian and Montney areas.

Encana focuses on liquids-rich production from the Montney and Duvernay deposits in Canada, as well as the Eagle Ford and Permian mills in the United States, as part of a five-year plan to increase production.

"This strategic combination advances our strategy and immediately contributes to our five-year plan," said Executive Director Doug Suttles in a statement.

EnCana stated that liquid production would account for more than half of the new company's production and help increase margins. Under the terms of the transaction, Newfield shareholders will receive 2.6719 Encana common shares for each Newfield common share.

The company, based in Calgary, Alberta, said its total production increased 33 percent to 378,200 barrels of oil equivalent per day (BOE / d) in the third quarter ended September 30.

Oil and oil equivalent production increased by 40% to 178,700 barrels a day.

Newfield shares rose about 19% to $ 24.06 in pre-market trading. Encana shares listed in the United States are trading slightly at $ 10.30, after closing at $ 10.24 on Wednesday.