DJR positioned to dominate San Juan shale after Encana asset buy

By Luke Geiver | October 01, 2018

Denver-based DJR Energy LLC believes it is poised to become a dominant operator in the San Juan Basin of northern New Mexico. In a deal valued at $480 million, DJR has acquired roughly 182,000 net acres in the San Juan from Calgary-based Encana Corp. The move will give DLR more than 350,000 net acres in the play noted for its shale gas production opportunities. DJR however, is focused on the oil production possibilities in the San Juan’s Mancos formation. The deal with Encana will give DJR more than 6,000 barrels of oil equivalent per day and 1,100 high value drilling locations with breakevens competitive with other premier oil basins, according to the company.

Trilantic North America, a private equity investor that has backed DJR previously, said the team is “excited to further unlock the potential of the San Juan Basin.”

DJR formed in 2017 with a focus on the San Juan. Previously, the management team at DJR was active in the DJ Basin.

Encana President and CEO Doug Suttles, said the sale of his company’s San Juan assets is consistent with Encana’s strategy of maximizing its highest producing assets values and in showing capital deployment discipline.

Earlier this year, WPX Energy sold its San Juan oil assets for $700 million. In August 2017, BP announced a major shale gas discovery in acreage located within the Mancos shale area. In May 2017, Trilantic expressed its initial enthusiasm for the San Juan and DJR.

“We believe the San Juan Basin is at an attractive stage of its development,” said Glenn Jacobson, a partner at Trilantic North America.