Encana Corp. (NYSE: ECA), Canada’s largest natural gas producer, said on March 4 it plans to raise up to CA$1.44 billion (US$1.16 billion) through a secondary share issue as the company looks to bolster a balance sheet weakened by low oil and natural gas prices.
Encana said it agreed to sell 85.62 million shares, priced at CA$14.60 each, to a group of underwriters led by RBC Capital Markets, Credit Suisse and the Bank of Nova Scotia, to raise CA$1.25 billion. The bankers have the option to purchase a further 12.8 million shares if demand warrants.
Encana said it plans to use the money to redeem two series of notes worth a combined US$1.45 billion as it looks to reduce debt while commodity prices remain weak.
The issue is the second by a major Canadian oil and gas producer in recent weeks. Oil sands developer Cenovus Energy Inc. (NYSE: CVE) last month raised CA$1.5 billion through a similar bought deal as it looked to fund its capital program despite oil prices that have fallen by more than half since June.
Encana’s offering is expected to close on March 16.
Recommended Reading
US Oil, Gas Rig Count Falls to Lowest Since January 2022
2024-05-03 - The oil and gas rig count, an early indicator of future output, fell by eight to 605 in the week to May 3, in the biggest weekly decline since September 2023.
Pemex Reports Lower 2Q Production and Net Income
2024-05-03 - Mexico’s Pemex reported both lower oil and gas production and a 91% drop in net income in first-quarter 2024, but the company also reduced its total debt to $101.5 billion, executives said during an earnings webcast with analysts.
Chouest Acquires ROV Company ROVOP to Expand Subsea Capabilities
2024-05-02 - With the acquisition of ROVOP, Chouest will have a fleet of more than 100 ROVs.
SLB, OneSubsea, Subsea 7 Sign Collaboration Deal with Equinor
2024-05-02 - Work is expected to begin immediately on Equinor’s Wisting and Bay Du Nord projects.
SilverBow Makes Horseshoe Lateral in Austin Chalk
2024-05-01 - SilverBow Resources’ 8,900-foot lateral was drilled in Live Oak County at the intersection of South Texas’ oil and condensate phases. It's a first in the Chalk.