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From: carranza2	5/12/2008 9:02:59 AM
	of 206265

Encana split seen as positive. theglobeandmail.com Investors get their way at EnCana Andrew Willis, today at 7:38 AM EDT If the full story of the EnCana bust up is ever told, the background drama will include institutional investor pressure to split the company in two. The market will pass judgement Monday on EnCana's plan to morph into a long-life, natural gas play and a separate integrated oil sands company. But the first reviews on the restructuring are in, and they are positive, with Genuity Capital Markets energy analyst Phil Skolnick writing in a note to clients: “Major shareholders we have talked to in the past year-plus have wanted this.” The pressure for the split reflects a view that two pure play companies are worth more than one energy conglomerate. EnCana closed Friday on the TSX at $86.52, without a whiff of the restructuring in the rumour winds. “We expect to see EnCana's share price up based on valuation of $90-$117 a share,” said Mr. Skolnick, a forecast based on management's 2008 cash flow guidance. His take on this break up, which will cost about $300-million and is expected to conclude early in 2009, is that it “seems like the right thing… especially for the oil sands.” “In today's gas price environment and [with] the improvements in returns via technological advancements in developing natural gas resource plays, it was probably getting very difficult for the oil sands division to compete for capital resources,” said Mr. Skolnick. He also noted that both offspring are likely takeover targets.

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