Canada’s beleaguered energy segment suffered another morale blow as Encana Corp. — one of its marquee companies that was born out of the 19th-century railway roar — announced plans to move its headquarters to the U.S. and leave the link to Canada from its name.
The Calgary-based company stated Thursday that it will inaugurate a corporate domicile in the U.S. early next year, pending various sanctions, and rebrand under the name Ovintiv Inc. The shares fell as much as 9.3 per cent in Toronto, the largest intraday drop in a year.
The move is likely to intensify the despair already hanging over the Canadian energy industry, which has writhed from a lack of pipeline space that has choked off predictions for growth, prompting foreign companies to ditch more than US$30 billion of resources in the past three years. Encana joins pipeline owner TransCanada Corp., which altered its name to TC Energy Corp. earlier this year.
For Encana, the change is a logical shift since Doug Suttles, a Texan, took over as chief executive officer in 2013. Suttles soon set about selling Canadian resources and building a major position in the U.S. through the obtain of Permian driller Athlon Energy and the acquisition of Freeport-McMoRan Inc.’s Eagle Ford shale assets. The company progressed into the Scoop and Stack shale fields in Oklahoma, the Bakken region of North Dakota and the Uinta play in Utah with its procurement of Newfield Exploration, which shut in February.
Suttles himself had by this time left Canada, moving to Denver in March of last year.