The Calgary-based oil and gas producer says a syndicate of underwriters — led by RBC Capital Markets, Credit Suisse and Scotiabank — has agreed to buy about 85.6 million common shares of the company at $14.60 apiece.
Encana shares were down by three per cent, closing at $15.20 on the Toronto Stock Exchange on Wednesday.
The underwriters have the option of buying up to 12.8 million more shares within 30 days of the offering closing, bringing total proceeds potentially as high as $1.44 billion.
Encana says the proceeds from the sale will help it pay down about $1.6 billion in debt.
Encana is not the only oilpatch name to sell stock as a means to bolster its finances in the face of low crude prices. Cenovus Energy Inc. (TSX:CVE) last month announced a $1.5 billion bought deal, which it said would be used to partially fund its capital program for this year, pay off debt and for general corporate purposes.