EnCana 3-month chart

A weekend announcement by Calgary-based EnCana Corp. to split into two fuelled a seven per cent gain in the company's share price on Monday.

EnCana stocked jumped $5.68 to end the trading day at a new all-time high close of $92.20 on the TSX.

At a Sunday news conference, the company said its board of directors had approved a proposal to split the oil and gas giant into two "highly focused" companies — an integrated oilsands firm and a natural gas-focused exploration and production company.

The first company, called IntegratedOilCo (IOCo), will focus on the development of EnCana's Canadian oilsands assets and refinery interests in the United States.

The other firm has the working name of GasCo, but is expected to retain the name EnCana Corporation. It will represent about two-thirds of EnCana's current production and proved reserves.

EnCana said it's dividing its holdings to enhance long-term value for shareholders. For each share of EnCana stock, shareholders will receive one share in each of the new companies.

"With the creation of these two companies, each management team will focus more directly on the critical success factors in its respective businesses," said EnCana CEO Randy Eresman in a release. "They will be better equipped to direct their strategies and operations towards building value by tailoring practices and execution to fit the unique nature of their assets."

Encana said it expects to complete the deal in early 2009.

EnCana is the largest natural gas producer in North America and is one of the biggest publicly traded companies in Canada, with a market capitalization of $69.2 billion.

It was created in 2002 by the merger of Alberta Energy Co. (AEC) and PanCanadian Energy Corp.