A pump jack is seen in this file photo.© Todd Korol / Reuters/Reuters
Encana Corp. has completed its land-office business in shares of PrairieSky Royalty Ltd., but not before underwriters took another $218-million as part of the over-allotment option.
That brings total proceeds from the initial public offering to $1.67-billion, nearly double its initial target.
Encana said the syndicate in the PrairieSky deal, one of the largest IPOs in Canadian history, exercised their option to take another 7.8-million shares for a total issue of 59.8-million at $28 apiece. The IPO was led by TD Securities and CIBC World Markets.
Shares in PrairieSky, which takes in royalties and fees from third-parties that drill on its vast acreage, were up 5 cents at $36.10 on the Toronto Stock Exchange early on Tuesday.
Encana launched the IPO as a way to strengthen its balance sheet, raising a stack of cash to re-deploy into its other operations while still collecting the fees from the royalty business. Brisk demand for the stock prompted it to increase the number of shares on offer, reducing its interest in PrairieSky to 54 per cent from its initial target of 75 per cent.
Jeffrey Jones