Encana Corp. (TO: ECA.TO, NYSE: ECA), Canada’s second-largest natural gas producer, is selling its controlling stake in PrairieSky Royalty Ltd. (TO: PSK.TO, OTC: PREKF) for CA$2.6 billion (US$2.4 billion) following the unit’s IPO, Bloomberg said Sept. 8.

A group of banks including Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, which co-led the IPO in May, will purchase Encana’s stake at CA$36.50 a share for resale to investors this month in a so-called bought deal, the Calgary-based company said in a statement Sept. 8. That’s 30% more than the IPO price.

Canada’s largest IPO in 14 years was part of Encana CEO Doug Suttles’ plan to sell assets and focus on primary regions that produce higher-value oil and gas liquids and pay down debt. PrairieSky generates revenue by charging drilling levies to other producers on its property. Encana’s secondary offering comes as rivals consider similar royalty IPOs or spinoffs poised to compete with PrairieSky.

“You’re going to have at least one more public entity, perhaps three,” Todd Kepler, an analyst at Cormark Securities Inc. in Calgary, said in a phone interview, applauding Encana’s total return on its former royalty unit. “They’re well north of $4 billion in proceeds from an asset they were just sitting on.”

PrairieSky has surged 36% since it started trading in May to CA$38.09 at 4 p.m. in Toronto, when trading on the stock was halted. Encana held 54% of PrairieSky after the IPO and an overallotment option, according to data compiled by Bloomberg.

Canadian Natural Resources Ltd. (TO: CNQ.TO, NYSE: CNQ) , the nation’s largest gas producer, has been considering how to extract value from its royalty-generating lands, including through an initial offering or asset sale. The company is targeting the end of the year to make a decision, Steve Laut, president of Canadian Natural, said last week at an investor conference in New York.

Cenovus Energy Inc. (TO: CVE.TO, NYSE: CVE) will evaluate options for its royalty lands, CEO Brian Ferguson said July 30 on a conference call.

Encana will probably boost its spending on drilling, raise its dividend and might buy back shares with the proceeds from the PrairieSky stake sale, Kepler said.

Jay Averill, an Encana spokesman, said the company hasn’t yet disclosed its plans for the proceeds.

Bank of Montreal and Royal Bank of Canada are also part of the group of banks leading the secondary offering expected to close later this month. Bank of Nova Scotia’s CA$2.62 secondary sale of shares in CI Financial Corp., including an overallotment option, was the biggest so far this year.