CALGARY, Alberta (Reuters) - EnCana Corp (ECA.TO: Quote) stock rose as much as 8.7 percent on Monday as investors bid up shares of unconventional gas producers in the wake of Exxon Mobil Corp's (XOM.N: Quote) $30 billion offer for XTO Energy Inc (XTO.N: Quote).
Exxon, the world's largest publicly traded oil and gas company, said on Monday it plans to acquire XTO for its exposure to shale gas and other unconventional gas discoveries that have reshaped North America's natural gas industry.
Like XTO, EnCana, Canada's biggest natural gas producer, has built large positions in some of the most promising shale-gas regions in North America, including the Haynesville region in the U.S. Southeast and the Horn River region in northern British Columbia.
EnCana's Toronto Stock Exchange-listed shares rose C$1.58, or 5.3 percent, to C$31.60, after earlier touching C$32.63.
Analysts said the Exxon offer will boost the value of companies with shale gas assets.
"It's re-pricing unconventional gas in the United States," said Martin Molyneaux, an analyst at FirstEnergy Capital. "The largest oil company in the world thinks there's a ton of upside in unconventional gas."
New technologies have cut the cost of producing shale gas, opening vast new reserves of the fuel. Indeed, the U.S. Energy Information Administration estimates that the Marcellus shale region centered in Pennsylvania contains as much as 262 trillion cubic feet of recoverable gas reserves, while other shale plays also hold trillions of cubic feet of gas.
Along with EnCana, shares in some smaller Canadian companies with unconventional gas production also rose on Monday. Crew Energy Inc (CR.TO: Quote), which produces gas from Montney shale region of British Columbia, rose 74 Canadian cents, or 6.1 percent, to C$12.89.
Questerre Energy Corp (QEC.TO: Quote), which is exploring Quebec's Utica shale region, rose 19 Canadian cents, or 8 percent, to C$2.56.