PrairieSky Royalty Completes Initial Public Offering

Encana Corporation and PrairieSky Royalty Ltd. completed the initial public offering of 52 million common shares of PrairieSky at a price of $28 per share.

The offering was conducted by way of a secondary offering by Encana, and resulted in Encana receiving gross proceeds of approximately $1.46 billion and retaining a 60 per cent interest in PrairieSky.

Following the exercise of the over-allotment option by the underwriters on June 3, 2014, the aggregate gross proceeds realized by Encana were increased to approximately $1.67 billion and Encana's retained interest in PrairieSky was reduced to 54 per cent.

The offering was, as of closing date, the largest energy IPO in Canadian history, and Canada's largest IPO since 2000, and was co-led and joint bookrun by TD Securities and CIBC on behalf of a syndicate of underwriters.

As part of the transaction, PrairieSky acquired Encana's royalty business, which includes approximately 5.2 million acres of fee simple mineral title lands and associated royalty interests in central and southern Alberta with petroleum and/or natural gas rights. PrairieSky does not intend to directly conduct operations to explore for, develop or produce petroleum or natural gas. Instead, the company will focus on attracting third party capital investment to develop PrairieSky's properties which is expected to provide PrairieSky with royalty revenues as petroleum and natural gas are produced from those properties.

Encana's in-house legal team on the transaction was led by Terrence Hopwood, Don MacDiarmid and Terence Trinh. Cameron Proctor, Vice-President, Legal and Corporate Services, oversaw legal matters for PrairieSky.

Encana and PrairieSky were represented by Blake, Cassels & Graydon LLP with a team including Chad Schneider, Olga Kary, Jeff Bakker and Britt Tan (securities); Ben Rogers, Chris Harris and Ky Kvisle (oil and gas); and Michael McIntosh and James Desjardins (banking). Paul, Weiss, Rifkind, Wharton & Garrison LLP provided US advice to Encana and PrairieSky on the transaction with a team including Andrew Foley, Alexis Fink and Emelia Baack. Felesky Flynn LLP provided tax advice to Encana with a team including John Burghardt and Sarah Chiu.

The underwriters were represented by Burnet, Duckworth & Palmer LLP with a team including Grant Zawalsky, Alyson Goldman, Lindsay Cox and Bronwyn Inkster (securities); and Stuart Money and Ashley Weldon (oil and gas). Daniel Miller of Dorsey & Whitney LLP provided US securities law advice to the underwriters.

The bank lenders to PrairieSky were represented by Rick Borden of Norton Rose Fulbright Canada LLP.


John J. Burghardt Olga Kary Sarah S. Chiu Jeffrey Bakker J. Stuart Money Grant A. Zawalsky Donald G. MacDiarmid Alyson F. Goldman Lindsay P. Cox Terrence J. Hopwood Chad Schneider Cameron Proctor Christopher R. Harris Terence Trinh J. Michael McIntosh Richard P. Borden


Blake, Cassels & Graydon LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP Felesky Flynn LLP Burnet, Duckworth & Palmer LLP Dorsey & Whitney LLP Norton Rose Fulbright Canada LLP