As per the agreement, Encana will acquire around 360,000 net acres of land as well as Encana’s working interests in all pipelines, facilities and service arrangements.

Subject to regulatory approvals, the transaction is slated to be completed by the end of the third quarter of 2014.

At the end of 2013 (on an SEC basis), total net proved reserves were approximately 1,100 billion cubic feet equivalent (Bcfe).

Encana president and CEO Doug Suttles said that the Bighorn high quality asset has not been receiving significant investment in 2014.

"This transaction advances our strategy by unlocking value from our portfolio as we focus on developing our core growth plays and extracting additional value from our base assets," Suttles added.

Encana is focused on growing portfolio of diverse resource plays, held directly and indirectly through its subsidiaries, producing natural gas, oil and natural gas liquids.