8. Business Combination Newfield Exploration Company Acquisition On February 13, 2019, the business combination with Newfield Exploration Company, a Delaware corporation (Newfield) was completed pursuant to an Agreement and Plan of Merger with Newfield (the Merger). As a result of the Merger, Newfield stockholders received 2.6719 Encana common shares, on a pre-Share Consolidation basis, for each share of Newfield common stock that was issued and outstanding immediately prior to the effective date of the Merger. The Company issued approximately 543.4 million Encana common shares, on a pre-Share Consolidation basis, representing a value of $3.5 billion and paid approximately $5 million in cash in respect of Newfields cash-settled incentive awards. Following the acquisition, Newfields senior notes totaling $2.45 billion was outstanding. For the three months ended March 31, 2019, transaction costs of approximately $31 million were included in other (gains) losses, net. Newfields operations focused on the exploration and development of oil and gas properties located in Anadarko and Arkoma in Oklahoma, Bakken in North Dakota and Uinta in Utah, as well as offshore oil assets located in China. The results of Newfields operations have been included in the Condensed Consolidated Financial Statements as of February 14, 2019. Purchase Price Allocation The transaction was accounted for under the acquisition method, which requires that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date, with any excess of the purchase price over the estimated fair value of identified net assets acquired recorded as goodwill. The purchase price allocation represents the consideration paid and the fair values of the assets acquired, and liabilities assumed as of the acquisition date. Purchase Price Allocation Consideration: Fair value of Encana's common shares issued (1) $ 3,478 Fair value of Newfield liability awards paid in cash (2) 5 Total Consideration $ 3,483 Assets Acquired: Cash and cash equivalents $ 46 Accounts receivable and accrued revenues 486 Other current assets 50 Proved properties 5,903 Unproved properties 838 Other property, plant and equipment 22 Restricted cash 53 Other assets 105 Goodwill (3) 25 Liabilities Assumed: Accounts payable and accrued liabilities (3) (4) (795 ) Long-term debt (2,603 ) Operating lease liabilities (76 ) Other long-term liabilities (3) (65 ) Asset retirement obligation (184 ) Deferred income taxes (3) (322 ) Total Purchase Price $ 3,483 (1) The fair value was based on the NYSE closing price of the pre-Share Consolidation Encana common shares of $6.40 on February 13, 2019. (2) The fair value was based on a price of $6.50 per notional unit which was determined using a volume-weighted average of the trading price of pre-Share Consolidation Encana common shares on the NYSE on each of the five consecutive trading days ending on the trading day that was three trading days prior to February 13, 2019. (3) Since the completion of the business combination on February 13, 2019, additional information related to pre-acquisition liabilities and contingencies was obtained resulting in a measurement period adjustment. Changes in the fair value estimates comprised an increase in other liabilities of $16 million, of which approximately $11 million is presented in accounts payable and accrued liabilities and $5 million is presented in other long-term liabilities, a decrease in deferred tax liabilities of $4 million and a corresponding increase in goodwill of $12 million. (4) In conjunction with the acquisition, various legal claims and actions arising in the normal course of Newfields operations were assumed by the Company. On March 29, 2019, Newfield and its wholly-owned subsidiary entered into an Agreement and Mutual Release with Sapura Energy Berhad, formerly known as SapuraKencana Petroleum Berhad, and Sapura Exploration and Production Inc., formerly known as SapuraKencana Energy Inc. (collectively, Sapura), and agreed to settle arbitration claims in the amount of $22.5 million arising from Sapuras purchase of Newfields Malaysian business in February 2014. The settlement amount including legal fees was included in the purchase price allocation as part of the current liabilities assumed at the acquisition date. Although the outcome of any remaining legal claims and actions assumed following the acquisition of Newfield cannot be predicted with certainty, the Company does not expect these matters to have a material adverse effect on the Companys financial position, cash flows or results of operations. The income approach valuation technique was used for the fair value of assets acquired and liabilities assumed. The carrying amounts of cash and cash equivalents, accounts receivable and accrued revenues, restricted cash, other current assets, and accounts payable and accrued liabilities approximate their fair values due to their nature and/or the short-term maturity of the instruments. The fair values of long-term debt, right-of-use (ROU) assets and operating lease liabilities were categorized within Level 2 of the fair value hierarchy and were determined using quoted prices and rates from an available pricing source. The fair values of the proved and unproved properties, other property, plant and equipment, other assets, other long-term liabilities and asset retirement obligation were categorized within Level 3 and were determined using relevant market assumptions, including discount rates, future commodity prices and costs, timing of development activities, projections of oil and gas reserves, and estimates for abandonment and reclamation. Goodwill arose from the Newfield acquisition primarily from the requirement to recognize deferred taxes on the difference between the fair value of the assets acquired and liabilities assumed and the respective carry-over tax basis. Goodwill is not amortized and is not deductible for tax purposes. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information combines the historical financial results of the Company with Newfield and has been prepared as though the acquisition had occurred on January 1, 2019. The pro forma information is not intended to reflect the actual results of operations that would have occurred if the business combination had been completed at the date indicated. In addition, the pro forma information is not intended to be a projection of the Companys results of operations for any future period. Additionally, pro forma earnings were adjusted to exclude transaction-related costs incurred of approximately $69 million and severance payments made to employees which totaled $113 million for the three months ended March 31, 2019. The pro forma financial information does not include any cost savings or other synergies from the Merger or any estimated costs that have been incurred to integrate the assets. Ovintivs consolidated results for the three months ended March 31, 2020 include the results from Newfield. For the three months ended March 31 (US$ millions, except per share amounts) 2019 Revenues $ 1,515 Net Earnings (Loss) $ (117 ) Net Earnings (Loss) per Share (1) Basic &amp; Diluted $ (0.48 ) (1) Net earnings (loss) per share reflect the Share Consolidation as described in Note 1. Accordingly, the comparative period has been restated.