NEW YORK (TheStreet) -- Shares of Encana (ECA) - Get Report were falling 6.03% to $9.27 on heavy trading volume mid-Tuesday morning after pricing a public offering of 107 million shares at $9.35 each.
An additional 16.05 million shares can be purchased under the terms of the transaction.
The Canadian oil and natural gas producer will use about half the proceeds to fund its 2017 capital program, including an expansion of production in the Permian Basin, and the other half to pay down debt.
The public offering is expected to close around September 23, and comes as crude oil prices have risen 65% from February lows, according to Bloomberg.
About 42.87 million shares of Encana have been traded so far today, well above its average trading volume of roughly 12.46 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
Encana's weaknesses include its generally high debt management risk, disappointing return on equity and weak operating cash flow.
You can view the full analysis from the report here: ECA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.