Encana Corp., once a Calgary oil and gas industry anchor that late last year adopted a “headquarters-less model,” is formally moving south.
The company will establish its corporate domicile in the US and change its name to Ovintiv Inc.
The move “will expose our company to increasingly larger pools of investment in US index funds and passively managed accounts, as well as better align us with our US peers,” said Chief Executive Officer Doug Suttles.
The company plans a consolidation and share exchange offering one share of common Ovintiv stock for every five shares of Encana.
Formed in 2002 by the merger of PanCanadian Energy Corp. and Alberta Energy Co. Ltd., Encana in the past several years has shifted its operational focus to onshore US resource plays while maintaining its footholds in Canada’s Montney and Duvernay onshore developments.
The company manages the US operations from Denver but did not say that city would become its headquarters.
It reported third-quarter production of 605,000 b/d of oil-equivalent oil and natural gas, of which 237,000 b/d was crude oil and condensate.
Encana’s move follows the exits of several major oil and gas companies from the Alberta oil sands in a migration largely attributed to tightening federal regulation and opposition to the needed expansion of pipeline capacity.
Saying she was “troubled” but not surprised by the news, Alberta Energy Minister Sonya Savage said Encana “has been shifting its efforts to the US for years, in large part due to harmful policies in Canada.”
She added, “It is no coincidence that today’s news is being announced after the federal election” on Dec. 21, in which the Liberal Party was reelected with a minority.
“I sincerely hope today’s news will serve as a wake-up call for leadership in Ottawa,” she said.
