Canada’s largest natural gas producer EnCana Corporation ( ECA - Analyst Report ) has agreed to sell two processing plants to Calgary-based Veresen Inc. This divesture will fetch Encana about C$920 million or $905.1 million.

Per the deal, EnCana will sell its 100% interest in two natural gas processing plants that serve the Cutbank Ridge area – the Steeprock unit in northeast British Columbia and the Hythe facility in northwest Alberta – and approximately 229.9 miles of associated gathering pipelines. The facilities can process natural gas up to 516 million cubic feet per day (MMcf/d).

EnCana has also entered into a long-term competitive gathering and processing fee agreement with Veresen. This pact will enable Encana to conduct the ongoing natural gas development in Cutbank Ridge economically as well as efficiently supply natural gas and liquids to market.

The transaction, pending customary approvals and regulations, is slated to be closed in the first quarter of 2012.

This disposition forms a part of EnCana’s divesture program designed for 2011. While total proceeds from all assets sale upon closing is expected to reach $3.5 billion, management expects to meet its projected range of $1 billion to $2 billion in proceeds from the divestures completed in 2011.

In this regard, EnCana entered into an agreement with Enbridge Inc. ( ENB - Snapshot Report ) for the sale of its majority stake at the Cabin Gas Plant in Horn River Basin for approximately C$215 million. Earlier this year, EnCana sold its Colorado-based natural gas processing properties to Western Gas Partners, L.P. ( WES - Snapshot Report ) for $300 million.

EnCana has also soldsome of its midstream assets in Colorado to privately held Summit Midstream Partners LLC for $590 million. The company expects proceeds from these sales to strengthen its balance sheet and provide greater financial flexibility in 2012.

Headquartered in Calgary, Alberta, EnCana is the second largest gas producer in North America, and holds a highly competitive land and resource position in a number of the region's most promising shale and tight gas resource plays. This provides the company with a low risk, long-life and sustainable growth profile.

We are maintaining our long-term Neutral recommendation on the stock. EnCana shares currently retain a Zacks #3 Rank, which translates into a short-term Hold rating.