EnCana relaunches plan to split

EnCana Corp. said late Thursday it is relaunching its plan to split itself into two firms a natural gas company and an integrated oil company.

The natural gas company will keep the EnCana name, while the oil company will be named Cenovus Energy Inc.

Calgary-based EnCana said after the close of stock market trading that its board of directors unanimously approved the plans, which were originally unveiled in May 2008 only to be shelved in October 2008 due to the turbulence that was affecting financial markets at that time.

EnCana president and CEO Randy Eresman said market conditions have improved to the point where the split can proceed.

"Equity and debt markets have improved significantly with debt financing available at reasonable cost," Eresman said in a release. "Global and national economic indicators suggest that the worlds economies are showing promising signs of recovery.

Eresman added that while natural gas prices are currently low, the company has cut its short-term risk by hedging a significant portion of its expected production for the 2009-2010 gas year.

Under the proposed split, current EnCana shareholders would keep their EnCana stock, and get one Cenovus common share for each EnCana share held.

EnCana plans that the initial combined dividends of the two companies will be approximately equal to EnCanas current dividend of $1.60 US per share annually.