Split plan sends EnCana shares soaring

CALGARY, Alberta (Reuters) - EnCana Corp (ECA.TO: Quote) (ECA.N: Quote) shares surged nearly 7 percent on Monday after Canada's biggest energy company said it plans to split into a natural gas firm and an integrated oil sands producer to boost its market value.

Shares of the Calgary-based independent producer jumped C$5.68 to close at a new high of C$92.20 on the Toronto Stock Exchange, after climbing as high as C$94.27. In New York, they gained $5.80 to $91.93.

The gains pushed its market value up by more than C$4 billion ($4 billion) from Friday to C$69 billion.

The stock's rise was also a major factor in a more than 2 percent increase by the TSX energy subgroup .

EnCana said on Sunday it will give its stockholders one share in each of the new firms for every share held.

The aim is to boost the value of the businesses by turning them into more focused and easily evaluated entities, it said.

Several analysts increased their share-price targets for the company following the announcement as they weighed the future of the spinoffs.

A broken-up EnCana could be worth C$99 a share, and with more aggressive pricing and production assumptions as much as C$116, Blackmont Capital analyst Menno Hulshof said.

The gas producer -- which will operate EnCana's unconventional gas holdings in Canada and the United States -- may be worth C$61 a share, he said.