CALGARY, Alberta, April 14 (Reuters) - Encana Corp, Canada’s largest natural gas producer, said on Monday it has filed a preliminary prospectus for the spinoff of its wholly owned properties in Western Canada as it continues a restructuring aimed at boosting profit while gas prices remain low
Encana said it expects to wrap up divesture of PrairieSky Royalty Ltd by early June. The new company will control 5.2 million acres of fee simple lands in Alberta, where the oil and gas production is free from government royalties.
The spinoff is part of a restructuring announced late last year by Chief Executive Doug Suttles which included cutting 20 percent of the company’s staff, slashing the dividend and concentrating capital spending in five regions rich in oil and high-value natural-gas liquids.
PrairieSky will not explore for oil and gas. Instead it will take royalties from other producers on the properties, much of which come from 19th-century land grants awarded to the country’s first national railroad. Encana expects to remain the majority shareholder of the new company.
Also on Monday, the company announced the sale of its U.S. LNG operations, which sold the gas as a transportation fuel, to Stabilis Energy for an undisclosed price.
The divesture of PrairieSky is being led by TD Securities and CIBC, Encana said in a release.
Encana shares closed up 13 Canadian cents at C$24.78 on the Toronto Stock Exchange. The shares have risen 25 percent over the past 12 months. (Reporting by Scott Haggett; Editing by Jonathan Oatis)