Encana of Canada acquires Newfield Exploration under a $ 5.5 billion contract

(Reuters) – Canadian oil and gas producer Encana Corp (ECA.TO) (ECA.N) said Thursday that he would buy Newfield Exploration Co (NFX.N) for $ 5.5 billion (4.27 billion pounds), making it one of the largest producers of shale oil in North America.

As part of this transaction, Encana will benefit from improved access to three of the largest oil deposits in North America, including the Permian Basin. Encana will also assume $ 2.2 billion of Newfield's debt.

EnCana stated that liquid production would account for more than half of the new company's production and help increase margins.

Under the terms of the transaction, Newfield shareholders will receive 2.6719 Encana common shares for each Newfield common share.

Encana has announced its intention to increase the dividend by 25% and extend its share repurchase program to $ 1.5 billion.

The company, based in Calgary, Alberta, said its total production increased 33 percent to 378,200 barrels of oil equivalent per day (BOE / d) in the third quarter ended September 30.

Newfield shares rose about 19% to $ 24.06 in pre-market trading.