The Canada Pension Plan Investment Board (CPPIB) is buying a US oil and gas asset in a joint venture with the Broe Group.

Encana Oil & Gas is selling Denver Julesberg Basin in Colorado to the joint venture for around $900m.

CPPIB will own a 95% interest in the entity, with Denver-based Broe holding a 5% stake.

The transaction is expected to close by year-end.

Avik Dey, managing director and head of natural resources at CPPIB, said: “The DJ Basin is one of the leading oil and natural gas plays in North America, and Encana’s assets and operations have long been regarded as top-tier by industry standards.

“This investment offers attractive economics and aligns well with our strategy for the energy sector.”

DJ Basin, spread over 51,000 net acres, produced an average of 52m cubic feet per day of natural gas and 14,800 barrels per day of crude oil and natural gas liquids in the first half of this year.