Topic: How To Invest

The Successful Investor Hotline – Friday, September 23, 2016

Article Excerpt

ENCANA CORP., $11.99, Toronto symbol ECA, focuses on four key projects: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas). Those fields produce large amounts of oil and natural gas liquids such as propane and butane. Altogether, the four sites supplied 73% of the company’s total production for the three months ended June 30, 2016. The stock fell 7% this week after Encana raised $1.0 billion through a public offering of 107.0 million common shares at $9.35 each (all amounts except share price in U.S. dollars). The company plans to apply half of the proceeds to its long-term debt of $7.3 billion U.S. That’s equal to 92% of its $10.4 billion (Canadian) market cap. Encana will use the other half to pay for its 2017 capital spending plans. They include doubling the number of wells on the Permian field. If the underwriters of the share offering exercise their option to buy an extra 16.05 million shares, the company would…