EnCana Corp., Calgary, (Toronto, NYSE: ECA) updated its plans to split the company into separate natural gas- and oil-focused companies. Asset sales will follow.

EnCana (GasCo), will have a portfolio of shale and other gas resource plays across North America. The integrated oil company, Cenovus Energy Inc., will comprise enhanced oil production and refineries, as well as an underlying foundation of reliable oil and gas resource plays.

Originally proposed in May 2008, the deal was to close in early 2009, but was postponed due to turmoil in the global debt and equity markets. EnCana announced in October 2008 a revision to the original reorganization schedule and delayed seeking shareholder and court approval for the transaction until stability returned to the financial markets.

EnCana’s debt as of Aug. 31 was about $8.2 billion, down about 19% from when it first announced its plans.

Oil-focused Cenovus includes EnCana’s Canadian enhanced-oil assets and U.S. refinery interests, underpinned by an established natural gas and oil production base in Alberta and Saskatchewan with significant capacity to deliver long-term free cash flow. The company’s medium- and long-term growth is expected to be driven by enhanced-oil-recovery projects at Foster Creek and Christina Lake. Cenovus also holds extensive lands in Alberta’s Athabasca oil region. The company’s 1.4 million acres of existing leases contain an estimated 40 billion bbl. of original bitumen in place.

In 2009, the Cenovus assets are forecast to produce net oil production of more than 110,000 bbl. of oil per day and about 820 million cu. ft. per day of natural gas, for a total of about 248,000 barrels of oil equivalent per day (BOE/d). The assets contain about 8.1 million net acres of land and, at year-end 2008, an estimated 1.2 billion net proved BOE (75% oil).

Brian Ferguson, EnCana chief financial officer, is the designated president and chief executive of Cenovus.

EnCana (GasCo) will be a pure-play gas company growing high-potential North American resource plays, focusing on assets primarily in Alberta and Saskatchewan and with U.S. operations in the Rockies’ Piceance Basin and in the Fort Worth Basin in East Texas. Gross production is 3 billion cu. ft. of gas equivalent per day. Proved reserves are 12.4 trillion cu. ft. of gas equivalent.

EnCana shareholders will own one share in each of the two companies.

EnCana has hedged two-thirds of expected 2009 gas production, about 2.6 billion cu. ft. per day, through October at an average Nymex equivalent price of $9.13 per thousand cu. ft. EnCana has also extended its risk management program through 2010.

The company also has 27,000 bbl. of oil per day of expected 2010 production hedged at an average fixed price of $76.89 per barrel (WTI).

Cenovus has entered a committed and fully underwritten C$3-billion, nonrevolving, 364-day bridge financing from RBC Capital Markets to partially fund the approximately C$3.5-billion amount to be paid by Cenovus to EnCana to acquire the Cenovus assets under the transaction. In addition, RBC Capital Markets has committed and fully underwritten a C$1.5-billion, three-year revolving credit facility and a C$500-million, 364-day, revolving credit facility, both for general corporate purposes.

BofA Merrill Lynch and RBC Capital Markets are financial advisors to EnCana. CIBC World Markets is financial advisor to the EnCana board. Barclays Capital and Scotia Waterous Inc. are strategic advisors and Bennett Jones LLP, Felesky Flynn LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP and Dewey & LeBoeuf LLP are legal advisors to EnCana. McCarthy Tétrault LLP is legal advisor to the EnCana board.

The deal is expected to close Nov. 30.