EnCana postpones its split

Article Excerpt

ENCANA CORP. $60.24 (Toronto symbol ECA; Shares outstanding: 749.8 million; Market cap: $45.2 billion; SI Rating: Average) has decided to postpone its plan to split itself into two separate companies — one focusing on natural gas, the other on oil sands and oil refineries. EnCana had hoped to complete the split in early 2009, but current problems in the credit markets will make it difficult for the two new smaller companies to raise capital to fund new projects. EnCana’s stock has dropped sharply in the past three months, along with oil and natural gas prices. However, hedging contracts will lock in prices for about 60% of EnCana’s natural gas production in 2009 at an average price 34% higher than the current spot price. Natural gas accounts for 80% of EnCana’s total production. EnCana is still a buy. buy…

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