EnCana claims top in market value

First energy firm to lead TSX since ’ 80s Passes Royal Bank as biggest company

EnCana Corp., Canada’s biggest natural gas producer, has overtaken the Royal Bank of Canada as the country’s biggest company by market value, becoming the first energy firm to hold top spot in at least 18 years. EnCana shares rose $ 2.09, or 3.5 per cent, to $ 62.10 at the close on the Toronto Stock Exchange yesterday, for a market value of $ 53.5 billion. That tops the Royal Bank of Canada, the country’s biggest lender, at $ 52.4 billion.

“ It’s been inevitable that a resource company should climb the ladder to achieve the top rung,” Greg Eckel, a money manager at Morgan Meighen & Associates in Toronto, said yesterday. ‘‘ We’ll probably see more of this.” Morgan Meighen owns more than 100,000 shares of EnCana and holds Royal Bank stock. A huge gain in crude- oil prices the past 12 months has boosted shares of EnCana and other producers. Four of the 10 biggest publicly traded corporations in Canada are oil companies, joining banks and insurer Manulife Financial Corp. EnCana is the first oil and gas producer to hold top spot among Canadian companies since at least 1987, according to Toronto Stock Exchange data, TSX spokesman Steve Kee said. The Toronto- based Royal Bank and Manulife have held the top spot at various times over the past year. Exxon Mobil Corp., based in Irving, Tex., is the biggest company in the world, with a market value of about $408 billion ( U. S.). The rising oil prices have also boosted Canada’s economic growth and helped lift the Canadian dollar against the United States currency. Canada is the biggest supplier of oil to the U. S. and is the world’s Number 3 natural gas producer. EnCana chief executive officer Gwyn Morgan has sold more than $5 billion of assets and boosted natural- gas production in North America to capitalize on rising energy prices. The company, formed by the 2002 merger of Alberta Energy Co. and PanCanadian Energy Corp., said July 28 that second- quarter profit more than tripled to $839 million on higher prices and fuel production.

“ We created the strongest independent (producer) in North America,” Morgan, 59, said in a recent interview. “ From a personal point of view, I could have never imagined” becoming the largest publicly traded company in Canada. EnCana agreed to sell oil fields in Ecuador for $ 1.42 billion to a partnership of China’s two largest oil companies, China Petrochemical Corp. and China National Petroleum Corp. EnCana shed assets in the United Kingdom last year and in the Gulf of Mexico in May.

Investor interest in EnCana “ reflects the high oil price and the good, solid management, which has been realizing the value of assets at better- than- expected prices,” said Gordon Higgins, a money manager at Sentry Select Capital in Toronto.

EnCana’s shares have risen 81.6 per cent this year, making the company the fourth- best performer on the S& P/ Toronto Stock Exchange 60 index.