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Oil Patch Insider ‘EnCanans’ get a new helmsman
First Gwyn Morgan slammed the door on rampant rumors that EnCana was a takeover target for Royal Dutch Shell, one day after the big independent’s shares climbed 10 percent.
Then, five days later, he slammed the door on his own career as the founding chief executive officer at EnCana, announcing he will step down on Dec. 31.
There must have been some connection between those two events?
Nothing of the sort Morgan told a news conference Oct. 25. He said the decision was essentially made during a summer of sailing — “the first time in a long time that I (have taken a lengthy vacation) and had time to reflect on my career.”
The significant milestones for Morgan are the 30th anniversary of his entry into the petroleum industry and his 60th birthday on Nov. 4, plus 12 years as a chief executive officer (first with Alberta Energy Co. and now with EnCana, which resulted from the merger of AEC and PanCanadian Energy).
To those who asked whether the EnCana board was instrumental in his departure, Morgan laughed and his wife Patricia Trottier said she had been startled to hear news reports that her husband had been “shoved out by the board because they’re unhappy. The date (of his resignation) is of our choosing — nobody else’s.”
But these have been volatile times for the company that has become North America’s No. 1 gas producer and, for a while, the company with the largest market capitalization on the Toronto Stock Exchange. Shell bid speculated Published speculation had Royal Dutch Shell offering US$65 a share, getting rebuffed and sweetening the deal to US$70.
Morgan ended two days of market frenzy with an unequivocal statement that EnCana was “not aware of any takeover bid” and that no discussions had taken place with Shell.
He said the name EnCana was a blending of “energy and Canada” and his objective had been to create a flagship Canadian-headquartered energy company.
More than that, Morgan has been an unabashed Canadian nationalist.
Industry and political observers doubted the Canadian government would ignore a foreign bid for EnCana, just as the United States government torpedoed China National Offshore Oil Corp’s attempted takeover of Unocal.
Deputy Prime Minister Anne McLellan reinforced that view by telling Parliament that the government would be concerned about the loss of a standard-bearing Canadian company.
But the Shell talk is not expected to fade. The Dutch-based company lacks a strong natural gas position in North America, which the acquisition of EnCana assets would solve in short order. EnCana-Suncor would be C$75B powerhouse For those casting about for other possibilities, a merger of EnCana and Suncor Energy would create a Canadian powerhouse worth more than C$75 billion and combining the long-term oil sands and unconventional gas resources of the two companies.
Morgan’s own thinking is that the Shell rumors stemmed from a combination of factors, notably the “tremendous influence of hedge funds, which generally have a pretty short time frame” along with a “zest for deal-making on the street.”
“It’s amazing what can be created out of the ether,” he said.
The reins at EnCana will be handed to Chief Operating Officer Randy Eresman, who has been groomed over 25 years by Morgan.
Credited with turning EnCana into a “resource play” company, known for his attention to detail, Eresman will bring a lower-key style to the top job.
For some observers, the boldest first move he could make would be to shed part of the Morgan legacy and stop referring to employees as EnCanans.
—Gary Park
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