Jim Letourneau's Blog

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Encana to be Eaten?

Andrew Willis of the Globe and Mail reports in its Tuesday, March 1, edition reports that Encana might make a tasty takeover treat for a major energy firm. In the absence of a controlling shareholder, the largest natural gas player in North America could end up on the plate of a multi-national energy company.

A major part of Encana's corporate strategy is to focus on the development of "resource plays". Resource plays are relatively low risk requiring more exploitation expertise than outright exploration. We have talked about the resource triangle here before and Encana's move towards the base of the triangle is driven by necessity given the relative maturity of North American gas exploration.

Encana made our Mega Monster Metal Mayhem portfolio because its approach to natural gas development is analagous to mining as opposed to outright wildcat exploration.

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