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

Sylvan Lake Wranglers earn another win at home

The Wranglers defeated the Ponoka Stampeders 3-1, Nov. 10

SLIDESHOW: Hundreds gathers in Sylvan Lake to honour Remembrance Day

There were two services for Remembrance Day in Sylvan Lake, Nov. 11

Black Press Extreme Education and Career Fair coming to Red Deer College’s Cenovus Learning Commons

Central Albertans can connect with employers on Nov. 28 from 11 a.m. to 3 p.m.

PHOTOS: Sylvan Lake students honour past and present soldiers at Remembrance Day services

Schools in Sylvan Lake took part in their Remembrance Day services the morning of Nov. 7

Food for Fines program returns to Sylvan Lake

The Sylvan Lake Municipal Library is forgiving fines in exchange for non-perishable food donations

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.

Disney Plus streaming service hits Canada with tech hurdles

Service costs $8.99 per month, or $89.99 per year, in Canada

Trudeau’s opponents: One gives him an earful, another seeks common ground

PM meets with Conservative leader Andrew Scheer and Saskatchewan Premier Scott Moe

Rona’s ‘truly Canadian’ ads are inaccurate, watchdog says

Ads Standards points out U.S.-based Lowe’s acquired Rona in 2016

Brian Burke considered favourite to replace Don Cherry

Brian Burke is the 5-4 pick to be the full-time replacement next season

Report predicts drug resistance likely to kill 400,000 Canadians by 2050

This increase is expected to cost Canada 396,000 lives, $120 billion in hospital expenses

Father of Broncos player who died says Alberta organ donation bill needs work

Six people benefited from organs harvested from his son, Logan, was one of 16 killed in the crash

Sportsnet fires Don Cherry after negative comments about immigrants

Don Cherry had said immigrants don’t wear poppies like other Canadians do

Trudeau’s new cabinet: Gender parity because it’s 2019? Or due to competence?

Prime Minister Justin Trudeau will soon appoint his new cabinet

Most Read