Encana Layoffs 20131105

CEO Doug Suttles proposed spinning off the PrairieSky assets as part of his turnaround plan for Encana. (Jeff McIntosh/The Canadian Press)

Canada's biggest IPO in 14 years jumped out of the gate on its first day of trading Thursday, as PrairieSky Royalty gained more than 30 per cent.

PrairieSky is a collection of energy assets spun out of Encana in a $1.46 billion IPO, making the company the biggest Canadian company to go public since 2000, when insurer Sun Life went public in a $1.8 billion IPO.

The company holds rights to about two million hectares worth of oil and gas assets in central and southern Alberta, and will make money to pay its dividends by charging fees for drilling rights on its properties.

It's part of a massive turnaround at the company that includes a dividend cut, layoffs, and debt repayments to focus on core businesses.

The 52 million shares were priced at $28. Around midday on the TSX, the shares were trading at $36.41.

The company was the most traded stock on the TSX on Thursday, with almost 24 million shares — half the shares available in the IPO — changing hands by mid-afternoon.

The deal includes the ability for underwriters to sell an additional 7 million shares as demand warrants, which could boost the value of the company to just under $1.7 billion.

Encana will still control another 60 per cent of the company, a stake which will be reduced to 54 per cent if the underwriters exercise their options to sell more shares than the 52 million originally planned.