CALGARY, Alberta — PanCanadian Energy Corp. is merging with Alberta Energy Co. in a more than $13 billion all-stock deal that will create one of the world's biggest independent oil and gas companies.
The new company, EnCana Corp., would overtake Houston-based Anadarko Petroleum Corp. as the world's biggest oil and gas exploration and production company.
The merger also includes the assumption of more than $3 billion in debt.
"We have decided to come together as equals from positions of strength so that we can achieve a stronger future in this highly competitive marketplace," said David O'Brien, PanCanadian chairman and chief executive officer, on Sunday.
PanCanadian CEO David O'Brien will chair EnCana's board, and Gwyn Morgan, AEC president and chief executive, will be president and chief executive officer of the new company.
EnCana's board of directors will consist of an equal number of directors from each company.
The merger is subject to shareholder and regulator approvals, but is expected to be complete by April. PanCanadian shareholders will own approximately 54 percent and AEC shareholders will own approximately 46 percent of EnCana.
PanCanadian Energy, which was spun off from the Canadian Pacific conglomerate last fall, had been seen as a potential takeover target for an American or European energy company because it was widely held and was one of the biggest cash generators in the Canadian oilpatch.
Alberta Energy is one of the dominant players in western Canada, where it is a major natural gas producer. It also has significant oilsands interests, with a part-ownership in Syncrude as well as the first large-scale plant that uses steam to draw out heavy oil from deep in the ground in northern Alberta.