Updating ENCANA CORP. and CENOVUS ENERGY INC.

Article Excerpt

ENCANA CORP. $31 and CENOVUS ENERGY INC. $26 are now trading as separate stocks after EnCana split itself into two companies. One kept the EnCana name, and focuses on unconventional natural gas. The other operates as Cenovus Energy and specializes in oil-sands projects. Shareholders received one share in each of the two new firms for every EnCana share they owned. Investors should allocate 51.5% of their adjusted cost base to the new EnCana, and 48.5% to Cenovus. EnCana has moved up since the split, as cold weather has caused natural-gas prices to jump. As well, ExxonMobil’s purchase of natural-gas producer XTO Energy has fuelled speculation that EnCana’s smaller size will make it a takeover target. Best Buy. Cenovus has moved lower, as environmentalists demand more controls over oil-sands projects. However, its low-cost operations should help it pay for any new carbon-reducing equipment. Buy. Buy…