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Encana, PetroChina enter into exploration deal

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December 13, 2012 01:15 PM EST | AP


CALGARY, Alberta — Encana Corp. and a subsidiary of China's state-owned PetroChina have entered into a joint venture agreement to explore and develop shale natural gas in Alberta.

Encana said Thursday that the PetroChina subsidiary, Phoenix Duvernay Gas, will invest US$2.21 billion for a 49.9 percent interest in about 445,000 acres (180,000 hectares) Encana has in the emerging Duvernay formation.

Encana will remain the operator of the Duvernay joint venture, which will see the partners together spend $4.06 billion on drilling, completion and processing facilities over the next four years.

Last week, Canada approved another Chinese company's US$15.3 billion takeover of Calgary-based Nexen Inc., but it said future acquisitions of oil sands producers will only be allowed under exceptional circumstances from now on.