Encana
| Company type | Public |
|---|---|
| Industry | Oil and gas |
| Predecessor | PanCanadian Petroleum, Alberta Energy Company |
| Founded | April 2002 |
| Founder | David P. O'Brien, Gwyn Morgan |
| Defunct | January 24, 2020 |
| Fate | Relocated headquarters to the United States and rebranded as Ovintiv |
| Headquarters | Calgary , Canada |
Area served | Canada, United States |
Key people |
* Randall K. Eresman (President, 2006–2013) * Douglas J. Suttles (President and CEO, 2013–2019) * Michael Gerard McAllister (President, 2019–2020) * David P. O'Brien (Chairman of the Board, 2002–2013)* Clayton H. Woitas (Chairman of the Board, 2013–2020) |
| Products | Oil and natural gas |
Number of employees | 4,169 (2012) |
Encana Corporation operated as an independent Canadian oil and gas enterprise from 2002 until 2020. Known as EnCana until 2010, it was established through the merger of PanCanadian Petroleum, led by David P. O'Brien, and the Alberta Energy Company, headed by Gwyn Morgan. At its formation, Encana ranked as the largest independent petroleum firm worldwide in terms of market value, output, and reserves. Under Morgan’s leadership until 2005, the company emerged as Canada's premier energy enterprise and briefly held the position of the largest Canadian company by market capitalization in September 2005.
Randall K. Eresman took over as president in 2006 following Morgan’s departure. During Eresman’s tenure, Encana achieved CAD 6.4 billion in earnings, marking a record profit for a Canadian corporation at that time. In 2009, Encana divested its oil assets by creating Cenovus, refocusing exclusively on natural gas production. Eresman stepped down in early 2013 and was succeeded by American executive Douglas J. Suttles, who restructured operations and prioritized expansion into the U.S., reestablishing crude oil production through shale plays.
In October 2019, Suttles revealed plans for corporate restructuring, which involved relocating the headquarters to the United States and rebranding as Ovintiv. This transition received overwhelming shareholder approval with a 90% vote on 14 January 2020 and was finalized on 24 January.
PanCanadian Petroleum
PanCanadian Petroleum was created in 1971 through the amalgamation of Canadian Pacific Oil and Gas (CPOG) and Central-Del Rio Oils. It possessed extensive freehold leases originally granted to the Canadian Pacific Railway, making it the Canadian oil company with the largest reserve base. CPOG began in 1958 as a mechanism to develop railway land grants, while Central-Del Rio was a smaller independent operator led by oilman Neil McQueen. After the merger, Canadian Pacific Limited maintained roughly an 87% ownership interest in PanCanadian.
Alberta Energy Company
The Alberta Energy Company (AEC) was founded in 1973 by the provincial government under premier Peter Lougheed to enable local investment in the Syncrude project. Initially, ownership was equally divided between public shareholders and the government. AEC also produced natural gas in areas such as the Suffield Block and Primrose Lake. Beginning in 1983, the government gradually reduced its shareholding, fully exiting its remaining 36% stake by April 1993. Gwyn Morgan assumed the presidency in 1994 and guided AEC through substantial expansion during the 1990s, becoming Canada's leading natural gas producer.
Formation of the company
In April 2002, Pan Canadian Petroleum Ltd was separated from Canadian Pacific Limited and merged with Alberta Energy Corporation to establish EnCana, with Gwyn Morgan appointed as president and CEO.
Morgan leadership period, 2002–2005
On 14 September 2005, EnCana overtook the Royal Bank of Canada to become Canada’s largest company by market capitalization, valued at $51.841 billion.
On 25 October 2005, Morgan declared his intention to retire as president at year-end, naming COO Randall K. Eresman as his successor. Eresman had a long-standing career with both AEC and EnCana, progressing from a summer student role in 1978 to executive vice-president and COO by 2003. Morgan expressed strong confidence in Eresman’s ability to sustain the company’s growth trajectory.
Eresman period, 2006–2013
In 2009, EnCana executed a corporate separation by spinning off its oil operations into a new entity, Cenovus Energy, while maintaining its natural gas activities. This division enabled investors to distinctly target either oil or gas assets.
By December 2012, EnCana had formed a joint venture valued at US$2.1 billion with Beijing-based state-owned PetroChina, granting PetroChina a 49.9% interest in EnCana’s holdings within Alberta’s Duvernay Formation. This arrangement aligned with Canadian regulations that restrict majority acquisitions by state-owned enterprises. At the close of 2012, EnCana's workforce numbered 4,169 employees.
Both EnCana and Cenovus operated from shared offices in Calgary’s The Bow, completed in 2013 as the tallest building in Canada outside Toronto. Developed by H&R REIT, the building had been designated as EnCana's headquarters since 2006 prior to Cenovus’s establishment.
On 11 January 2013, Eresman stepped down from his role as president but continued as a board member until February. Interim president Clayton H. Woitas attributed Eresman’s resignation to exhaustion, although some analysts speculated that the company sought new leadership to guide EnCana forward.
Suttles period, 2013–2020
In November 2013, the company reduced its dividend payout, eliminated 20% of its staff, shuttered its Plano, Texas office, and announced intentions to divest assets while forming a separate entity to manage southern Alberta mineral rights and royalties. The capital budget for 2014 allocated three-quarters of funding toward five principal projects: Alberta’s Montney Formation and Duvernay Formation, New Mexico’s San Juan Basin, Louisiana’s Tuscaloosa Marine Shale, and the Denver-Julesburg Basin (DJ Basin) spanning Colorado, Wyoming, and Nebraska.
CEO Suttles revealed on 15 March 2018 that he would relocate to Denver for personal reasons; nonetheless, the company affirmed Calgary would remain its headquarters. Later that year in November, Encana completed a US$5.5 billion acquisition of Houston-based Newfield Exploration, shifting its production profile from approximately 60% Canadian to nearly 60% U.S.-based operations. Founder Gwyn Morgan criticized this transition as a consequence of Canadian government policies, lamenting the relocation of leadership and core assets southward. Analyst Ted Morton similarly interpreted the acquisition as emblematic of capital flight from Canada's energy industry.
In October 2019, the firm announced plans to move its base from Canada to Denver, coinciding with its CEO’s residence there, alongside rebranding as Ovintiv. The restructuring was finalized through the creation of a new Canadian corporation named Ovintiv on 22 January 2020, which acquired all Encana shares via a one-for-one stock swap. Two days later, Ovintiv was incorporated in Delaware, completing the corporate transition.
Analysis of Encana's decline
One month following this announcement, Jeffrey Jones of the Globe and Mail challenged the narrative that government policy alone was responsible for Encana's troubles, instead attributing significant blame to management since Suttles assumed presidency in 2013. Under his leadership, Encana’s stock price declined by 75%, whereas competitors such as Canadian Natural Resources and Suncor experienced gains. Jones observed that Suttles’ decisions "Americanized the company; regrettably for shareholders, none enhanced their wealth."
In April 2021, an investigative report titled "Who killed Encana?" was published by the Globe and Mail, featuring interviews with founders Morgan and O'Brien. Morgan held the Liberal federal government accountable for fostering an adverse investment environment and asserted that without spinning off its oil segment into Cenovus, Encana "would still be operating in Canada." O'Brien disputed government policy as a cause, instead pointing to the U.S. shale revolution beginning in 2008 as pivotal. Regarding Cenovus, he remarked that both companies suffered from post-2008 price corrections and stated bluntly, "Cenovus has been terrible. Encana has been terrible."
Following restructuring, scrutiny intensified around Suttles’s remuneration relative to company results. In January 2021, Kimmeridge Energy Management—holding a 2.4% stake in Ovintiv—criticized poor returns during his tenure: shareholder value dropped by 85%, while his compensation rose from US$6.7 million in 2014 to US$12.6 million in 2019. Over eight years at the helm, shares decreased by 58%, yet Suttles earned a cumulative US$104 million. David Milstead characterized this disparity between pay and performance as stark. The Financial Post highlighted that despite shareholder equity falling from US$5.29 billion to US$3.84 billion under his leadership, Suttles remained among Canada's highest-paid executives within the oil sector.
President
- Gwyn Morgan, April 5, 2002 – December 31, 2005
- Randall Kerry Eresman, January 1, 2006 – January 11, 2013
- Clayton Harvey Woitas (acting), January 11, 2013 – June 11, 2013
- Douglas James Suttles, June 11, 2013 – September 10, 2019
- Michael Gerard McAllister, September 10, 2019 – January 24, 2020
Chairman of the Board
- David Peter O'Brien, April 5, 2002 – July 24, 2013
- Clayton Harvey Woitas, July 24, 2013 – January 24, 2020
- Articles with short description
- 2002 establishments in Alberta
- 2020 disestablishments in Alberta
- Canadian companies established in 2002
- Canadian companies disestablished in 2020
- Defunct oil and gas companies of Canada
- Energy companies established in 2002
- Energy companies disestablished in 2020
- History of Alberta
- Non-renewable resource companies established in 2002
- Non-renewable resource companies disestablished in 2020