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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer County has three new confirmed COVID-19 cases

Government says Alberta up to 1,181 total cases

Rimbey textile artists creating hand-made masks

Group has also been helped out by a local business

107 new cases of COVID-19 in Alberta, 5 additional deaths

More than 1,000 cases in Alberta total

Sylvan Lakers howling to support essential workers

The Sylvan Lake Howl also serves as a way to release pent-up energy and connect the community

A message from the publisher

Consider a voluntary subscription to Sylvan Lake News

Canada looking to disinfect used masks, Tam asks they not be thrown away

Best defence against COVID-19 is to stay home as much as possible, wash their hands frequently

Actress-activist Shirley Douglas, daughter of medicare’s Tommy Douglas, dies

‘Sadly she had been battling for her health for quite some time’

Boeing to continue production shutdown due to coronavirus

Company is extending its planned two-week shutdown

COVID-19 case reported at supermarket in Wetaskiwin

Sobeys will not release names to protect employees

Trudeau unveils details for emergency payment for Canadians

Applications for the Canada Emergency Response Benefit will be accepted starting Monday

Drake does the ‘Toosie Slide’ in new video, shows his mansion and empty T.O. streets

New creative outlet during the COVID-19 pandemic: The “Toosie Slide.”

Singer Pink says she had COVID-19, gives $1M to relief funds

The artist and her three-year-old son displaying symptoms

Most Read