Encana president and CEO Doug Suttles addresses the company’s annual meeting in Calgary, on April 30, 2019. THE CANADIAN PRESS/Jeff McIntosh

Encana moves headquarters from Calgary to U.S., changes name to Ovintiv

CEO says changes won’t result in layoffs or divert investment strategies in Alberta and B.C.

Encana Corp., one of Canada’s oldest and largest energy companies, is moving its corporate headquarters from Calgary to the United States to bolster its access to deep-pocketed investors.

The company, which is also changing its name to Ovintiv Inc., says having a U.S. address will expose it to increasingly larger pools of investment in U.S. index funds and passively managed accounts.

On a conference call on Thursday morning, CEO Doug Suttles insisted the name and “corporate domicile” changes will not affect any Canadian staff, result in any layoffs or divert investment strategies in oil and gas formations in Alberta and B.C.

“Make no mistake, we have a long and proud history in Canada and our assets here are world class,” he said.

“Our returns in Canada continue to be every bit as strong as the rest of our portfolio. We will continue to make profitable investments in the Montney and the Duvernay and manage these assets out of the Calgary office. We do not expect any impact on our Canadian workforce, either in the office or the field.”

Encana’s Canadian address means it isn’t included in stock market indexes with its U.S. peers and therefore doesn’t attract dollars from growing ranks of passive investors, said chief financial officer Corey Code on the call.

“We estimate today that less than 10 per cent of our ownership is comprised of passive accounts, far less than the 30 per cent average for our U.S. peers,” he said.

Analysts said the move is not surprising given Encana’s increased focus on oil and natural gas liquids plays in the United States over the past decade, culminating in its US$5.5 billion all-shares acquisition of U.S. rival Newfield Exploration Co. announced a year ago.

“I am not surprised at all by the move,” said Jennifer Rowland, a U.S.-based analyst with Edward Jones.

“Post the Newfield deal, 60 per cent of Encana’s production is in the U.S. and two of its key growth drivers are in the U.S. … Plus CEO Suttles doesn’t live in Canada; he lives in Denver.”

Alberta Energy Minister Sonya Savage had a similar message. “I am troubled by news that Encana is formally relocating its headquarters to the United States,” she said, in a tweet. “Sadly, I cannot say I’m surprised, as Encana has been shifting its efforts to the US for years, in large part due to harmful policies in Canada.”

RELATED: No government can bring back Alberta oil boom, experts say

Analyst Phil Skolnick of Eight Capital Research said the headquarters move is bound to lead to speculation about a sale of Canadian operations.

“It will beg the question of whether or not ECA will eventually sell or spin out its Canadian assets. We believe in this current market, this is not in the works,” he said in a report.

The company’s shares sank on the news, falling 49 cents, or 8.86 per cent, to $5.04 in midmorning trading on the Toronto Stock Exchange.

Dan Healing, The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

Santa is coming

Tis the season

Four Maskwacis residents charged with 38 crimes Nov. 9

Maskwacis RCMP: four arrested following armed robbery, pursuit and home invasion

Lest We Forget

Remembrance Day service in Rimbey well attended

Premier vows to fight for oilpatch as drillers forecast almost no growth in 2020

The CAODC said it expects the Canadian drilling rig fleet to continue to shrink

NDP Leader Jagmeet Singh meets Trudeau to discuss throne speech

Top ask was the immediate creation of a national universal Pharmacare program

Jagmeet Singh says he’ll vote against throne speech if NDP requests not met

Singh is to meet with Prime Minister Justin Trudeau on Thursday

Small group of Cherry fans protest his firing at Rogers HQ

One sign at the Toronto rally: ‘Rogers cancels Don, we cancel Rogers’

Ideas for Alberta independence would increase costs, Nenshi says

Province has formed panel to examine how to get what a ‘fairer deal’ from Confederation

Alberta harvest a ‘growing crisis’: MP Blaine Calkins

Alberta Conservative MP’s resolve to assist farmers struggling with harvest

Petition to ‘bring back Don Cherry’ goes viral after immigrant poppy rant

Cherry was fired from his co-hosting role for the Coach’s Corner segment on Nov. 11.

‘We love you, Alex!’: Trebek gets choked up by ‘Jeopardy!’ contestant’s answer

The emotional moment came in Monday’s episode when Trebek read Dhruv Gaur’s final answer

Most Read