ENCANA CORP. $15 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 839.6 million; Market cap: $12.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.3%; TSINetwork Rating: Average; www.encana.com) recently sold 98.5 million shares for $14.60 (Canadian) each, increasing the number outstanding by 13%. (All amounts except share price and market cap in U.S. dollars.)
As well, Encana has sold natural gas pipelines and compression facilities in B.C.’s Montney region for $461 million (Canadian).
It will use the total proceeds of $1.9 billion (Canadian) to pay down its long-term debt of $7.3 billion (as of December 31, 2014), which is a high 73% of its market cap.
The company will spend between $2.0 billion and $2.2 billion on new projects and upgrades in 2015, down $700 million from its earlier forecast. About 80% of this spending will go to its four main shale oil properties in Texas and B.C. As a result, oil will account for 34% of its 2015 production, up from 18% in 2014.
Encana is a buy.
