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* Shareholders approve oil-natural gas split

* Transaction complete on Nov. 30

* Company sees split as takeover defense

* Shares rise 2.6 percent
(Corrects trading symbol for Cenovus to CVE.TO in final
paragraph from CEN.TO)

CALGARY, Alberta, Nov 25 (Reuters) – EnCana Corp’s (ECA.TO)
investors on Wednesday approved a plan to split Canada’s No. 2
independent petroleum producer into independent oil and natural
gas businesses, completing a move first mulled more than a year
ago but delayed by the financial crisis.

Shareholders voted 99 percent in favor of the transaction,
through which EnCana will spin off its oil sands operations
into a new company called Cenovus Energy Inc and retain its
natural gas production business, the largest in Canada.

The vote means EnCana can proceed with a transaction first
proposed in May 2008, but delayed when the credit crunch made
it too expensive for the oil sands business to raise capital.

EnCana will emerge from the split, final on November 30
pending court approvals expected later on Wednesday, focused on
its natural gas holdings.

The company has built large positions in some of the most
promising shale-gas regions in North America, including the
Haynesville region in the U.S. southeast and the Horn River
region in northern British Columbia.

To be sure, natural gas prices have floundered as new
supplies from the shale regions entered the market while the
recession cut demand, pushing the excess gas into storage.

But Chief Executive Randy Eresman said EnCana is somewhat
protected from the price squeeze because it has kept costs low.
He said that many in the industry may find it tough to make a
profit unless prices improve.

“I expect there will be some difficulty is showing bottom
line earnings … for corporations that are exposed to natural
gas,” he said.

Cenovus will take control of EnCana’s oil sands joint
venture with ConocoPhillips (COP.N), which includes oil
producing properties in northern Alberta, a half share in two
Conoco refineries in the United States and some conventional
oil and natural gas properties in Western Canada.

“We expect Cenovus will be an industry leader,” said Brian
Ferguson, EnCana’s chief financial officer and slated to be the
oil producer’s chief executive. “We have some of the best oil
assets in North America … and produce those resources at one
of the very lowest costs in the industry, lower than the vast
majority of our competitors.”

Some commentators have fretted that splitting EnCana into
two may make the parts appealing for would-be acquirers. But
Eresman said neither company was likely to be taken over.

“Both of these companies are roughly C$20 billion in size,”
he said. “The same handful of companies that could have
acquired EnCana are … the potential acquirers of the
individual parts. We’ve always believed that the split of the
company is the best defense against a hostile (offer) as a way
to reflect the full valuation of the individual companies.”

EnCana shares rose C$1.50, to 2.6 percent to C$57.54 late
afternoon on the Toronto Stock Exchange. Cenovus will list with
the Toronto ticker symbol CVE.TO.
(Reporting by Scott Haggett; editing by Janet Guttsman)
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