Energy giant Encana Corporation announced Thursday it intends to move its corporate headquarters to the United States and change its name to Ovintiv Inc.
The Calgary-based company said the move still requires shareholder, stock exchange and court approval but it is expected to take place in early 2020.
“We are excited about our strategic transformation. Our company is positioned to compete in the broader markets and lead the (exploration and production) industry on the road ahead,” said CEO Doug Suttles, in a news release. “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.
“A domicile in the United States will expose our company to increasingly larger pools of investment in U.S. index funds and passively managed accounts, as well as better align us with our U.S. peers. The change in corporate domicile will not change how we run our day-to-day activities. However, our actions show that we will leave no stone unturned to capture the value we deeply believe exists within our equity.”
Doug Suttles
CEO
In coordination with the change in corporate domicile, a consolidation and share exchange will be completed for effectively one share of common stock of Ovintiv for every five common shares of Encana. 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 stock exchange and Canadian court approvals, said the company.
The company did not say how many jobs in Calgary and Canada will be affected by the move. Nor did it say where specifically the company’s office will be located in the U.S.
Also on Thursday, Encana reported net earnings of $149 million, up from $39 million a year ago.
“Encana continues to deliver consistently strong financial performance,” said Suttles. “Our business is delivering free cash flow today. We have been very disciplined with our capital allocation and today increased our outlook for 2019 volumes while maintaining our capital investment guidance. We have a unique combination of profitable liquids growth, the generation of free cash and a track record of returning cash to our shareholders. We are confident that our business model is sustainable and that it will ultimately be differentiated by the market.”
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