Encana announced today its plans to move its base to the United States and change its nave to Ovintiv Inc.
The move, which requires shareholder, stock exchange and court approval, is expected to occur in early 2020.
“Our Company is positioned to compete in the broader markets and lead the E&P industry on the road ahead,” said CEO Doug Suttles.
“Over the last five-plus years, we have transformed our portfolio and our culture. We’ve created a high quality, liquids focused multi-basin portfolio. Our focus on innovation and efficiency is consistently delivering superior financial and operational performance.”
Suttles said moving to the U.S. will expose them to larger investment pools in U.S. index funds and passively managed accounts as well as better align with their U.S. peers.
Encana’s company’s founder, Gwyn Morgan, told U.S. media that they are forced out of Canada because of the Libera government’s policies.
“The destructive policies of the Trudeau Liberals have left the company with no choice but to shift its asset base and capital program south of the border. Now, its re-election strikes the final blow.”“The destructive policies of the Trudeau Liberals have left the company with no choice but to shift its asset base and capital program south of the border. Now, its re-election strikes the final blow." – Encana founder Click To Tweet
Minister of Energy Sonya Savage said she is troubled by Encana’s move.
“I am troubled by the news that Encana is formally relocating its headquarters to the United States,” she said today.
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“Sadly, I cannot say I am surprised, as Encana has been shifting its efforts to the U.S. for years, in large part due to harmful policies in Canada.
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“Today’s news follows Encana’s earlier decision in November 2018 to move to a ‘headquarter-less model’ with a heavy shift to the U.S. It is no coincidence that today’s news is being announced after the federal election.
“I would encourage all to read Encana founding CEO and energy pioneer Gwyn Morgan’s 2018 commentary on how the company he founded is being pushed out of Canada due to policies from our federal government. I sincerely hope today’s news will serve as a wake-up call for leadership in Ottawa.
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“Encana still maintains significant operations within Alberta, and I expect that to continue. The government has been informed that today’s news does not involve elimination of jobs in Alberta, nor does it alter the company’s Canadian capital allocation plans.”
A special meeting of Encana shareholders will be held in early 2020 to approve the name change, the share consolidation and the U.S. domicile.
Approval by two-thirds of votes cast will be required to approve the changes, as well as the stock exchange and Canadian court approvals.
A preliminary proxy statement/prospectus is expected to be filed with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities in early November.
The new company will then start trading on both the New York and Toronto stock exchanges under the ticker symbol “OVV.”
Encana’s announcement comes on the heels of their third-quarter profit of $149 million (11 cents per share), which is up from last year’s $39 million, or four cents per share.
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