Canadian energy company buys Texas oil and gas producer

Canadian oil and gas developer Encana Corp. said Monday that it will buy Texas-based Athlon Energy Inc. for a total $7.1 billion in cash and notes.

The deal allows Encana to expand more into liquids production, the Canadian Broadcasting Corp. (CBC) reported. It gives Encana about 140,000 acres of mineral rights in the oil and natural gas rich Permian Basin in Texas and New Mexico.

{mosads}“This transformative acquisition further accelerates our strategy and provides us with a prime position in what is widely acknowledged as one of North America’s top oil plays,” Encana Presient Doug Suttles said in a statement Monday.

Encana said it plans to spend about $1 billion in the Permian Basin next year. It hopes to operate at least seven horizontal rigs in the region by the end of 2015, compared with the three it operates now.

It will add the equivalent of about 30,000 barrels of oil a day from the Midland Basin, which is part of the Permian.

The companies plan to close the transaction by the end of the year, CBC said.