Encana buys Texas oil field for $3.1 billion from Freeport-McMoRan

Encana Corp. says it has reached an agreement to acquire 45,500 net acres of oil-producing property in south Texas for $3.1 billion.

The Calgary-based energy producer says the deal with Freeport-McMoRan covers property which produced about 53,000 barrels of oil equivalent per day in the first quarter of 2014.

Encana says the agreement will approximately double the company's current oil production and significantly enhance its ongoing efforts to reposition to a more balanced commodity portfolio.

The Calgary company says the acreage has an estimated drilling inventory of more than 400 locations in the heart of the oil-rich Eagle Ford resource play.

"Gaining a position in a world class, oil-rich resource play like the Eagle Ford accelerates the transition of our portfolio and underscores our investment focus on high margin assets," says president and CEO Doug Suttles.

"With this transaction, combined with our announced divestments of Jonah and properties in East Texas, we're replacing natural gas production with high margin oil and liquids production."