* Ready to spend $5-10 billion on North American deal - WSJ
* Analysts say may sell Gas Natural before any big purchase
* Shares flat at 18.5 euros
MADRID, Sept 16 (Reuters) - Spanish oil company Repsol is ready to spend between $5 billion and $10 billion ona U.S. or Canadian exploration and production company, the WallStreet Journal reported on Monday,
Repsol has told investment bankers in recent months of itsplans and has a preference for a company that produces more oilthan natural gas, the WSJ said, citing people familiar with thetalks.
Repsol declined to comment.
Repsol's sale of liquefied natural gas assets to Royal DutchShell, due to close later this year, will bring in $4.4 billion before taxes for the firm.
The company has also said it is considering selling its 30percent stake in utility Gas Natural Fenosa, worthabout 4.5 billion euros at current market prices.
Repsol could use the proceeds from the potential sale of GasNatural to strengthen its growing exploration and productionbusiness.
Its strategic plan calls for 19 billion euros to be spent onboosting its upstream oil business through 2016, with focus onthe United States, Brazil, Russia and Latin America.
Analysts said they did not expect the company to do a majoracquisition until the sale of its Gas Natural stake iscompleted.
"The amounts mentioned (by WSJ) are relevant for Repsol'sdimension and considering the group's focus in maintaining aninvestment grade rating, we believe it would only make senseonce and if it completes the sale of its stake in Gas Natural,"BPI said in note to clients.
Repsol's finances came under scrutiny when Argentinanationalised its majority stake in YPF last year,forcing the company to take a series of steps to preserve itsinvestment grade credit rating.
Its shares, which have gained 23 percent so far this year,were flat at 18.5 euros by 0900 GMT.
