EnCana splitting up!

[Rathji]

Originally Posted by Azure

If the government would do its job 'properly'.....oil/gas prices wouldn't be through the roof.

So no, don't give me that shtick about unregulated free markets failing to serve the best interests of society.

Or perhaps if those s in India and China didn't all start buying gas so they could drive around in cars our government would be able to do something about prices in a manner that didnt kill Oil companies.

Demand is at an all time high, affordable cars in China and India coupled with overall increased demand in North America due to "SUV or Urban Sprawl" type issues have caused this.

In my views there are 2 ways the government can help stem the tide of these increases:

Price ceilings and subsidies to oil companies.

Price ceilings don't work. If a station can't sell for enough to make a profit they will just shut down. Consider how things worked out in the Maritimes a few years ago when they tried this. All it does it make gas harder and harder to get.

I highly doubt anyone here would support giving money to oil and gas companies so they will lower their prices. So the only way for the government to decrease gas prices by subsiding or participating in the development of exploration and extraction technologies. This is a solid plan, that is in affect ( see Oilsands) but that certianly hasn't in the past had any immediate affect on gas prices, which seems to be your goal.

[Reaper]

Originally Posted by JD

Well that's a good idea, and it will definitely simplify our business dealings with EnCana, but could they pick a more awkward name for the oil company???

IOCo??? WTF? How do you pronounce that?

The official press release mentioned that IOCo was a temporary name and that there would be permanent one finalized before the finalization of the stock transaction.

To me, it seems like they were jumping the gun a tad. "The natural gas company will be called Encana and the Integrated Oil Company will be called ...umm ...errr ...something. We'll tell you later."

[Bill Bumface]

Originally Posted by Reaper

The official press release mentioned that IOCo was a temporary name and that there would be permanent one finalized before the finalization of the stock transaction.

To me, it seems like they were jumping the gun a tad. "The natural gas company will be called Encana and the Integrated Oil Company will be called ...umm ...errr ...something. We'll tell you later."

It's not jumping the gun at all. You have to form the new organization before the new organization can decide it's name. This is done all the time when spinning off companies, it's just usually you wouldn't know about it until the process was complete and the new company with it's new name was spun off.

[Bring_Back_Shantz]

Originally Posted by Reaper

The official press release mentioned that IOCo was a temporary name and that there would be permanent one finalized before the finalization of the stock transaction.

To me, it seems like they were jumping the gun a tad. "The natural gas company will be called Encana and the Integrated Oil Company will be called ...umm ...errr ...something. We'll tell you later."

Jumping the gun or not, does it really matter?
With all of the planning that needs to go into something like this, is picking a name really that important?
The news of the split is what's important, what they're gonna call the oil business is kind of irrelevant at this point.

[Gozer]

Originally Posted by onetwo_threefour

And people mock on political boards when I suggest that unregulated free markets fail to serve the best interests of society.

I would too.

[Clarkey]

Originally Posted by IHATEOILERS

A big reason is for market valuation purposes. Heavy oil and natural gas have different risk / reward profiles, and appeal to different investor appetites. By giving investors the discretion to invest in one division but not the other, you attract more aggregate demand. More demand = a higher combined price, which is in the best interest of the shareholders (and the company, because it gives them a cost of capital advantage)

Thanks.

[Shazam]

Decent article about the zillions of signs that Encana gave off that they were splitting:

http://www.theglobeandmail.com/servl...ry/energy/home

Anyhoo, didn't really surprise me, other than that they actually had the cajones to do it. My company responded to an Encana RFP; the process was unravelled when their oilsands division did an end run and decided to go with a product that locked the whole company in.

[edn88]

For those who are following along at home, the EnCana split is back on.

http://www.theglobeandmail.com/globe...rticle1283491/

[Top Shelf]

Yep, should be an interesting next couple of months. Basically have to re-duplicate all the IT Infrastructure all over again, as most of the hardware that was purchased for the original split has been pilfered for production.

Wow, when I think about it, it's mind boggling how much work has to happen between now and the end of the year.

ECA stock up 5.80% already this morning

[TurnedTheCorner]

This was announced over a year ago, wasn't it? Then delayed because of the credit crunch/recession?

EDIT: Yeah, the news release mentioned this was first announced in May 2008. Which means it's been in the works and planned for for more than 18 months.

[Eagle Eye]

I wonder which major is gonna take a run at them now?

[Shazam]

I figure the NG company will be independent for about 33 seconds before the takeover announcement appears.

[Hustle]

Originally Posted by Eagle Eye

I wonder which major is gonna take a run at them now?

The rumor mill is already in overdrive over here....

[SeeGeeWhy]

I wonder how the two different stocks will be valued once the split is complete.

I'm thinking that the gas business will be extremely undervalued right now, and will be a good pick up.

[red sky]

Originally Posted by Hustle

The rumor mill is already in overdrive over here....

Over where?

[Hustle]

Originally Posted by red sky

Over where?

I work at EnCana.

[Bill Bumface]

nm

[TurnedTheCorner]

Originally Posted by Shazam

I figure the NG company will be independent for about 33 seconds before the takeover announcement appears.

Because natural gas prices are looking so good for the next 5 years?

[Bobblehead]

The Encana split can just hire all the excess staff from the PetroCan/Suncor merger.

[TurnedTheCorner]

But they've largely got the staff in place. A co-worker of mine was hired away by Encana in preparation for the split ages ago.