Oct. 23 (Bloomberg) -- EnCana Corp., which is splitting into a natural-gas producer and a separate oil company, may sell $500 million to $1 billion in gas assets per year that aren’t profitable enough.

“We always say that we want to sell the bottom 5-10 percent of our portfolio,” Executive Vice President Mike Graham said in an interview with Bloomberg. “The gas company going forward, we’ll continue to high-grade our portfolio, and we will probably sell in the order of $500 million to $1 billion, maybe even more than that as time goes on.”

Canada’s largest gas producer has shed about $1 billion in assets this year, including properties in central Alberta sold to Bonavista Energy Trust in August, said Graham, 50, from his Calgary office. Divestitures may include unconventional assets not material to EnCana after the company divested conventional, international and offshore fields in recent years, he said.

EnCana said Sept. 10 it will spin off its oil and refining operations under the name Cenovus Energy Inc. and continue as EnCana to produce gas. The separation will take effect Nov. 30. Graham, in charge of the Canadian Foothills Division, will head all of EnCana’s Canadian operations after the split.

EnCana is looking for a buyer for interests in about 600 wells in the Green River Basin of Wyoming that produced the equivalent about 27.9 million cubic feet a day in the first half of the year, according to Scotia Waterous, which is marketing the sale. Bids for the assets, 94 percent of which are gas, are due Nov. 3.

Cenovus officials separately said on Oct. 1 the spun-off oil company plans to sell about $500 million of assets on an annual basis.

Marcellus Plans

EnCana plans to enter the Marcellus formation in the eastern U.S. “relatively quickly” to complement its shale-gas operations in Canada and the U.S., Graham said. Beyond that, the company is looking for “tuck-in” acquisitions that have the potential to add at least 1 trillion cubic feet of gas in possible reserves, he also said.

Gas prices may rise as high as $7 in the long term as demand is rebounding with an improving global economy, allowing producers to step up drilling, Graham said. EnCana may have as much as 500 million cubic feet of daily production shut in across North America that the company plans to restart by the end of the first quarter, he said.

“We are not going back into that $10, $15 range,” he said. “The long-term price of natural gas will be in that $6- $7 range.”

Gas prices have declined 13 percent this year amid record storage levels. One million British thermal units fetched $4.875 as of 11:40 a.m. on the New York Mercantile Exchange.

Calgary-based EnCana produced the equivalent of 4.6 billion cubic feet of gas a day in the second quarter from areas such as Wyoming, Texas, Colorado and Alberta. More than 80 percent of its production is gas.

To contact the reporter on this story: Sonja Franklin in Calgary at sfranklin6@bloomberg.net

Last Updated: October 23, 2009 11:43 EDT