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

County of Paintearth releases summary of initial round of community engagement sessions

‘Various aspects of the existing Land-Use Bylaw and Municipal Development Plan were reviewed during the sessions’

County of Paintearth council hosts virtual delegation from RMA during June 2nd meeting

The RMA also usually hosts two conferences for municipalities in a given year

Alberta reports just seven new COVID-19 cases

‘Today’s numbers mark an occasion to be celebrated’

Still no confirmed active COVID-19 cases in Red Deer, central zone

There are 15 new confirmed cases were in Alberta, the province said Thursday

Town council moves to re-open community playgrounds

Highlights from the Town council meeting of May 25th

PODCAST: Black Lives Matter in central Alberta

Community organizers come on the show to discuss central Albertan anti-racist movement

Montreal man believes rough arrest caught on video was racially motivated

Montreal man believes rough arrest caught on video was racially motivated

N.B. police shooting of Indigenous woman leads to questions on ‘wellness checks’

N.B. police shooting of Indigenous woman leads to questions on ‘wellness checks’

Minister says reckoning on police violence against Indigenous people needed

Minister says reckoning on police violence against Indigenous people needed

Nunavut to bring in civilian police review after arrest video: minister

Nunavut to bring in civilian police review after arrest video: minister

Trudeau takes a knee at anti-racism protest on Parliament Hill

Trudeau takes a knee at anti-racism protest on Parliament Hill

Liberal MP Marwan Tabbara faces assault, break and enter, harassment charges

Liberal MP Marwan Tabbara faces assault, break and enter, harassment charges

Black Canadians say racism here is just as harmful as in the United States

Black Canadians say racism here is just as harmful as in the United States

Implementation of Divorce Act reforms delayed eight months by pandemic

Implementation of Divorce Act reforms delayed eight months by pandemic

Most Read