Nov. 2 (Bloomberg) -- Cenovus Energy Inc., the spinoff of EnCana Corp. that will take over its oil assets, is being valued at about C$21.3 billion ($19.7 billion) as investors submit bids for the stock, which starts trading Dec. 3 in Toronto.

Prospective buyers of Cenovus shares are willing to pay C$28.30 a share, according to so-called gray-market trades submitted to Canadian exchanges. Calgary-based EnCana had 751.2 million shares outstanding on Sept. 30, the company said last week, and holders will receive one Cenovus share for each EnCana share they own once the new company begins trading officially.

The implied market value for Cenovus represents 47 percent of EnCana’s current market capitalization.

“Some thought that Cenovus would dominate the valuation,” said Peter Ogden, oil and gas analyst at National Bank of Canada. “But oil in general’s been weaker; refining’s been weaker. Cenovus could be deemed cheaper than expected. For us, that would be a buy signal.”

Cenovus will take over 80 percent of EnCana’s oil and natural-gas liquid production and 23 percent of its natural-gas production. The part of EnCana being spun off had 909 million barrels of proven oil reserves at the end of last year. It will be one of the largest players in Western Canada’s oil sands, which the Canadian Association of Petroleum Producers says will be responsible for 80 percent of Canada’s oil production in 2025, up from 45 percent last year.

The company said it is targeting oil-sands production growth of 10 to 15 percent a year over the next five years.

In gray-market trading, investors buy and sell shares on an “if, as and when issued basis.” Sellers must deliver actual shares to buyers once trading in the stock officially begins.

Crude-oil futures have declined 4.2 percent since Oct. 21.

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.

Last Updated: November 2, 2009 16:32 EST