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Pump jacks pump oil at an Encana well near Standard, Alta., May 12, 2014.

Encana Corp. added its name to the growing list of energy companies tapping equity markets to make up for a severe drop in cash flow owing to the oil-price collapse.

Encana said on Wednesday that it is selling $1.25-billion worth of new shares in the industry's second-largest offering of the year. If underwriters exercise an overallotment option, proceeds will climb to $1.44-billion.

With the latest financing, Canadian oil and gas producers have raised more than $3.3-billion in share issues since the start of 2015.

Energy companies across the board are under pressure to bolster their finances as the price of oil hovers around $51 (U.S.) a barrel, down from levels above $100 last summer.

Encana said proceeds will be used to help pay back $1.6-billion (Canadian) of debt, which reached a total of $7.3-billion (U.S.) as of Dec. 31.

The Calgary company made $9-billion of acquisitions over the past year, as chief executive officer Doug Suttles adopted an aggressive strategy to turn the struggling company from one focused on natural gas to an oil-and-gas-liquids powerhouse. Newly acquired assets include big properties in the Eagle Ford and Permian regions of Texas. The timing of the shift has proven difficult, playing out just as oil began to weaken after years of strong prices.

At an industry conference last week, Mr. Suttles suggested he is acutely aware of his company's debt burden.

After mentioning the need to cut more costs, he noted that "maintaining our balance sheet and an investment-grade rating are important aspects of our plans."

Encana is selling shares at $14.60 (Canadian) apiece in a bought deal to a syndicate of underwriters led by RBC Dominion Securities, Credit Suisse and Bank of Nova Scotia. In such an offering, the dealers purchase the shares for resale to institutional and retail clients.

The deal was priced at a 4-per-cent discount to the value of Encana's shares at Wednesday's market close. It's not clear how the issue will be received by investors, given the growing amount of equity issued by energy and mining companies this year.

Cenovus Energy Inc. recently sold $1.5-billion of shares of its own in another bought deal. It was particularly important for Cenovus, which had pledged to maintain its dividend. The issue did not sell out immediately.

Much like many of its energy peers, Encana recently announced plans to slash its capital spending in 2015, but that wasn't enough to erase concerns about its debt, leading some analysts to assume asset sales were on the horizon to raise cash.

In other energy offerings, Crew Energy Inc. issued $100-million of shares and Raging River Exploration Inc. raised $88.3-million. ARC Resources Ltd. did a $402-million deal and junior producer Rock Energy Inc. closed a $13.2-million offering.

Investment banking sources have said caution remains among investors, but there appears to be simmering demand for bargains.

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