Encana Corp. put more flexibility in its balance sheet, including the ability to make acquisitions, by agreeing to sell its remaining stakes in PrairieSky Royalty Ltd., CFO Sherri Brillon said Tuesday.

Speaking at the Peters & Co. Ltd. 2014 Energy Conference in Toronto, Brillon said Encana’s decision to sell the controlling interest in PrairieSky, worth an estimated $2.3 billion net, opens more doors for the independent operator.

Encana kept majority ownership when it spun off PrairieSky in May, Canada’s largest initial public offering (IPO) in 14 years (see Shale Daily, May 29). PrairieSky was created from the Clearwater portfolio’s 5.2 million acres of legacy land that stretches from Southern Alberta to the U.S. border. PrairieSky controls royalty-free property, allowing the operator to lease land to other operators in exchange for royalties.

The sale “gives us agility, flexibility to execute on our strategy” as Encana continues to transition from gas-heavy to more weighted to oil and liquids, Brillon said. The company would be able to be “opportunistic” in buying into new positions or bolting on more acreage in some of its onshore positions.

For instance, she pointed to Encana’s agreement in May to pay Freeport-McMoRan Inc. $3.1 billion to buy its 45,500-net acre portfolio in the Eagle Ford Shale (see Shale Daily, May 7). Expect those types of acquisitions in the future, Brillon said.

The Freeport deal alone helped Encana double its oil output, a benefit for the gas-heavy producer, the CFO told the audience.

Encana is selling its stake in PrairieSky through an equity offering in a transaction set to close by the end of the month. About 70.2 million shares would be sold at $36.50 each through a bought deal to a group of underwriters. The price is around 30% higher than what investors paid in the IPO in May, but about 4% lower than the closing price Monday.

Pro forma for the PrairieSky offering and other pending/closed transactions, Encana’s cash balance is about $6.7 billion, much of which is expected to be “prudently redeployed” in oil-producing properties, a credit positive, said analysts with Moody’s Investors Service.

Moody’s team ticked off Encana’s pending sales to date this year: Big Horn, AB assets to Jupiter Resources Inc. for $1.8 billion; Jonah, WY assets to Jonah Energy LLC, $1.8 billion; East Texas assets for $530 million; and the PrairieSky IPO.

“The sales of these mostly gassy assets have largely been offset by the acquisition of an oil production play in the Eagle Ford formation in Texas,” the analysts said. “If the cash reserves now built up are prudently redeployed into an oily acquisition as we expect, increases in oil production and cash flow should follow, along with an improvement in leverage metrics.”

Analysts with Tudor, Pickering, Holt & Co. called the PrairieSky sale “one heck of a bought deal,” with capital likely to be used to de-lever the balance sheet in the near-term, “but we believe this could help finance bolt-on acquisitions in liquids-rich areas.”