Repsol considers US or Canadian oil and gas acquisition - WSJ

* Ready to spend $5-10 billion on North American deal - WSJ

* Analysts say may sell Gas Natural (AMEX: EGAS - news) 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 on a U.S. or Canadian exploration and production company, the Wall Street Journal reported on Monday,

Repsol has told investment bankers in recent months of its plans and has a preference for a company that produces more oil than natural gas, the WSJ said, citing people familiar with the talks.

Repsol declined to comment.

Repsol's sale of liquefied natural gas assets to Royal Dutch Shell (LSE: RDSB.L - news) , 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 30 percent stake in utility Gas Natural Fenosa, worth about 4.5 billion euros at current market prices.

Repsol could use the proceeds from the potential sale of Gas Natural to strengthen its growing exploration and production business.

Its strategic plan calls for 19 billion euros to be spent on boosting its upstream oil business through 2016, with focus on the United States, Brazil, Russia and Latin America.

Analysts said they did not expect the company to do a major acquisition until the sale of its Gas Natural stake is completed.

"The amounts mentioned (by WSJ) are relevant for Repsol's dimension and considering the group's focus in maintaining an investment grade rating, we believe it would only make sense once 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 Argentina nationalised its majority stake in YPF last year, forcing the company to take a series of steps to preserve its investment grade credit rating.

Its shares, which have gained 23 percent so far this year, were flat at 18.5 euros by 0900 GMT.