EnCana to split in two

Shareholders in Canadian energy group EnCana have voted to split the energy company into two separate businessesÔÇöone focused on natural gas, the other on the Alberta oilsands.  Following approval of the move, Calgary-based EnCana will focus exclusively on gas, while its oil and refinery assets will be spun off into a separate company, Cenovus Energy, which is valued at C$21 billion (US$19.8 billion).  The natural gas assets will be run by Randy Eresman, EnCanaÔÇÖs chief executive. Cenovus will be headed up by Brian Ferguson, EnCana's current chief financial officer.  Natural gas makes up the bulk of EnCana's output, which Eresman hopes will increase by 10 percent annually. It is focused on prolific unconventional natural gas reservoirs throughout North America, with production equivalent to 3.2 billion cubic feet of gas per day.  Cenovus has an estimated 40 billion barrels of oil in the Canadian oilsands. It will be focusing in particular on a Saskatchewan field that injects carbon dioxide to extract oil.  EnCana, one of North AmericaÔÇÖs largest independent energy producers, had planned to proceed with the move to split last year but postponed its plans following the onset of the global financial crisis. In September the plans were revived once global markets began to stabilize.  Since its formation in 2002, EnCana has struggled to maximize the potential of its two core assets due to differing oil and natural gas prices, as well as differing risks. Its difficulties have negatively affected its oilsands interests, resulting in a lower share price than many of its rivals.  EnCana has estimated that the combined value of the two companies could be worth 15 percent more as separate entities than if they remained together.  Although some of EnCanaÔÇÖs shareholders expressed concern that the two smaller companies could be more at risk of a foreign takeover, 99 percent voted for the deal to go ahead.  Fears of takeovers may relate to the fact that EnCana was formed as a result of the 2001 split of Canadian Pacific Railway (CPR) into several companies. CPR's oil and gas division became part of the newly formed EnCana the following year.  Owners of each EnCana share will receive one share in each of the two companies. The deal is expected to close on Monday, subject to court approval, and the companies will begin operating a day later.  No job losses are expected as a result of the split, with growth in each business segment expected to result in a recruitment drive instead.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *