MUMBAI (Thomson Financial) - Moody's Investors Service said it cut its
outlook on EnCana Corp. to stable from positive, after the company said it plans
to restructure itself into two separate companies -- a natural gas company
(GasCo) and an integrated oil company (IOCo).
Also, Moody's affirmed its 'Baa2' senior unsecured rating on the company.
The outlook change reflects that EnCana's rating is unlikely to be raised
pending the conclusion of the proposed split. Also, stable outlook considers
EnCana's solid positioning within the 'Baa2' rating category, Moody's said.
Moody's said it has not rated either GasCo or IOCo at this time but based on
preliminarily available information and current market conditions it anticipates
that both companies would have ratings in the 'Baa' range.
EnCana's current 'Baa2' rating reflects its substantial scale and geographic
diversification, consistent reserve replacement, production growth and capital
productivity, ability to generate strong free cash flow and the value of its
oilsands development and joint venture interests in downstream assets, the
ratings agency said.
It also considers EnCana's very large capital expendture requirements for
its resource play gas business, oilsands development and refinery expansion.
The rating also reflects EnCana's aggressive shareholder return policies, in
which essentially all free cash flow is paid to shareholders through dividends
and share buybacks, Moody's added.
tfn.newsdesk@thomson.com
ndi/ypv
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
|