Under the terms of the deal, Canada Pension Plan Investment Board will acquire 95% stake in the assets, which include more than 1,600 wells and 51,000 net acres, while Broe Group will own the remaining 5% stake.
Broe Group COO & CFO Claude Pumilia said: "We are pleased to be partners with CPPIB to acquire an asset with significant proved reserves, strong production, and attractive well performance and returns.
"The combination of the management expertise of The Broe Group with the financial strength of CPPIB will drive the success of this new venture."
The assets plan to be sold include all of Encana’s DJ Basin acreage, which produced an average of 52 million cubic feet per day (MMcf/d) of natural gas and 14,800 barrels per day of crude oil and natural gas liquids during the first half of 2015.
Subject to satisfaction of normal closing conditions, regulatory approvals and post-closing and other adjustments, the transaction is slated for completion in the fourth quarter of 2015.
The transaction proceeds will be used by Encana to strengthen its balance sheet in addition to creating greater flexibility in market environment.
The divestment is a part of the company’s effort to shift its focus on four strategic assets, the Permian, Eagle Ford, Duvernay and Montney.
Encana has sold about $2.7bn of assets in 2015 and looks to cut down its debt by $3bn by year-end.
Encana president and CEO Doug Suttles said: "Our efforts to transform our portfolio, improve efficiency and grow margins are increasing returns and strengthening our balance sheet, positioning Encana for success throughout the commodity cycle.
"The new entity is acquiring a quality asset along with a highly talented team."
