Current ECA Stock Info

Encana Corporation (ticker: ECA) today announced the completion of its offering of 85,616,500 common shares of the company at a price of C$14.60 ($11.42) per share. The aggregate gross proceeds of the offering is C$1.25 billion (about $980 million), according to the company’s press release.  ECA has alos granted the underwriters an over-allotment option to purchase up to an additional 12,842,475 shares at the same price. The additional shares would add another C$187.5 million (about $146.72 million) to the aggregate gross proceeds.

The company will use the net proceeds of the offering to redeem its US$700 million of long-term debt maturing in 2017 and C$750 million (about $587 million) of long-term debt maturing in 2018 on April 6, 2015. Pursuant to the terms of their respective indentures, the redemption of this debt requires an estimated on-time early interest payment of approximately US$165 million, which is expected to save Encana a gross amount of approximately US$205 million in future interest expense, based on current foreign exchange and treasury rates.

Based on EnerCom’s E&P Weekly for the week ended March 13, 2015, Encana’s debt-to-market cap ratio of 68% is above the median of 62% for the 88 companies compiled. ECA is paying a dividend of $0.07 per share on March 31, 2015, to all common shareholders of record as of March 13, 2015.

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication.

Legal Notice