No suitor for Encana?
For its most recent report, Bernstein played the role of matchmaker for North American oil and gas companies and found possible suitors for a number of beleaguered natural gas companies — except for Encana Corp. The investment bank says a few potential marriages that would make sense include ConocoPhillips Co. wooing EOG Resources Inc., Royal Dutch Shell PLC sweeping Range Resources Corp. off its feet, and Chevron Corp. charming Apache Corp. But Calgary-based Encana may not get the attention it deserves. “For ECA, we remain unenthused by the company’s U.S. asset base, and see the company continuing down a route of joint ventures,” said analyst Bob Brackett. “In addition, we believe the Investment Canada Act is an enormous roadblock to any acquisition of ECA (unless, of course, the acquirer were a Canadian company, which we view as unlikely).” Not everybody agrees. Andrew Potter, an analyst at CIBC, says the odds of an Encana takeover are 40%. Meanwhile, Talisman Energy Inc. may not find a suitable partner either as new investment rules will keep foreign suitors away, Mr. Brackett said. “Better candidates exist for exposure to North American resource bases, and the Investment Canada Act may pose a hurdle, although recent poor stock performance makes valuation intriguing (don’t get us wrong — we still like the stock as a turnaround story, just not as a first-tier consolidation target).”