ECA considering forming seperate Co.EnCana CEO: Still Considering Forming Separate Crude Co
3:08pm ET (Dow Jones Newswires)
CALGARY -(Dow Jones)- Canadian energy company EnCana Corp. (ECA) said Monday that it is still considering spinning off its oil sands unit into a separate company, as it seeks to attain the most value for its crude oil developments.
"It's something we've always thought could create the most value for us," EnCana Chief Executive Randy Eresman told a press conference. Companies that only own oil sands assets tend to receive a better market valuation than those with a wide variety of oil and gas assets, he said.
However, EnCana would be unlikely to make any such move at least until after its oil sands units become self-funding in approximately two years' time. Even then, there is no guarantee that the oil assets will be spun off, Eresman said.
"In the near term, it's not something that we would move forward. Down the road, we will continue to monitor the possibility," he said.
EnCana originally said that it was considering forming its oil sands units into a separate company in April, but added that any decision would have to wait until it had secured a downstream partnership for its upstream oil sands assets.
That question was resolved last month, when EnCana agreed to a deal with U.S. energy major ConocoPhillips (COP) to spend $10.7 billion over the next decade to boost Canada's oil production and deepen its access to the U.S. market.
EnCana currently produces around 50,000 barrels a day of crude, but expects to increase output to 400,000 barrels a day by 2015 through a joint venture with ConocoPhillips.
-By Norval Scott, Dow Jones Newswires; 403-531-2912; norval.scott@dowjones.com
(END) Dow Jones Newswires
11-06-06 1508ET
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