|New buy today. To add to an existing position today MCF-Contango Oil & Gas Company. IMO it would make a nice niche addition for ECA who wants to get oily again. IMO It most likely can be bought for around 1 billion. Little kicker. MCF just bought Crimson energy which is right next to some ECA Eagle Ford properties.|
Encana (ECA) to Sell Remaining PrairieSky Stake for C$2.6B
Natural gas exploration and production (E&P) company Encana Corporation ( ECA) announced that it has signed a deal with a syndicate of underwriters to sell its stake in PrairieSky Royalty Ltd., the company that Encana had spun-off in May (Read: Encana's PrairieSky IPO a Success).
The underwriters, who would in turn offer the shares to investors, would buy Encana’s remaining 54% stake in PrairieSky, representing 70.2 million common shares, at C$36.50 per share. Encana is expected to receive C$2.6 billion from the transaction. The offered price is over 30% higher than the initial public offering ( IPO) price of C$28 per share.
The secondary offering is expected to close on or around Sep 26, subject to regulatory approvals. PrairieSky generates revenues through royalties collected from other oil and gas exploration companies that operate in its properties.
Encana did not give any details as to how it intends to use the proceeds from the sale of its interest. However, in accordance with the company’s present strategy to move its operations away from natural gas, the proceeds will likely be used for oil-driven growth.
Based in Calgary, Alberta, Encana is the second largest gas producer in North America and has a highly competitive land and resource position in several of the region's most promising shale and tight gas resource plays. This provides the company with a low risk, long-life and sustainable growth profile. However, at the same time, Encana’s sizeable exposure to volatile natural gas prices remains a chief concern.