on Thursday said it agreed to buy colleagues oil and gas companies
in a stock exchange worth approximately 5.5 billion dollars.
Calgary-based Encana said it would issue 2,6719 common shares for each Newfield share. The deal values Newfield at approximately $ 27.36 per share, a about 35% premium based on Wednesday’s US $ 10.24 closing price for Encana and $ 20.20 for Newfield.
Newfield shares jumped 18.5% to 23.93 USD in premarket trading Thursday.
Encana shareholders own approximately 63.5% of the merged company, while shareholders in Woodlands, Texas-based Newfield own approximately 36.5%.
Encana said it plans to raise its dividend by 25% and expand its $ 1.5 billion repurchase program at the completion of the transaction, expected in the first quarter of 2019. The companies expect annual synergies of $ 250 million.
Encana, which also takes up $ 2.2 billion in the Newfield debt, says the deal creates a multi-lingual company with major positions in Permian, Stack / Scoop and Montney oil and liquids.
The companies had combined production in the third quarter of 577,000 barrels of oil equivalents per day, including a liquid power of approximately 300,000 barrels a day. Encana said it expects that the production of liquids will contribute more than 50% of total production after it has completed the acquisition of Newfield.
Write to Colin Kellaher at [email protected]