) has announced the filing of initial prospectus related to the
spinoff of its gas and oil resources in Western Canada. The plan
reflects the company's intent to vend non-core properties and to
primarily focus on five liquid-rich assets.
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The company that will be formed through the offering - PrairieSky
Royalty Ltd. - is expected to own roughly 5.2 million acres of
land in Alberta, Western Canada. The properties will be free from
royalties of the government. PrairieSky Royalty will not be
executing upstream operations on the assets but will instead
collect fees from the companies exploring the resources.
Encana added that the divesture of PrairieSky Royalty is expected
to be closed by the first half of June this year.
Separately, Encana declared that it has entered into a deal with
Stabilis Energy, provider of liquefied natural gas (LNG). Per the
agreement, Encana is expected to sell its U.S.-based LNG
business. The company has not disclosed the price yet.
Based in Calgary, Alberta, Encana is the second largest gas
producer in North America and holds 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.
Encana currently carries a Zacks Rank #2 (Buy), implying that it
is expected to outperform the broader U.S. equity market over the
next 1 to 3 months.
One can also look at well-performing players in the energy sector
Range Resources Corporation
Helmerich & Payne Inc.
). All the players sport a Zacks Rank #1 (Strong Buy).