Encana Corp. chief executive Doug Suttles has cut deeply into the company’s executive suite as he sets the stage for a series of sweeping strategic changes at Canada’s largest natural gas producer.
Five veteran executives are leaving the Calgary-based company, with four classified as retiring. Six remain to report to Mr. Suttles, though some are being handed different titles.
One notable shift is the disappearance of separate Canadian and U.S. divisions. Two top U.S. bosses, Jeff Wojahn and Eric Marsh, are among those leaving as Encana readies for its corporate retooling, expected to be rolled out by the end of the year.
“The way Doug likes to talk about it is, the rocks don’t care what country they’re in,” Encana spokesman Jay Averill said. Mr. Suttles, a former BP PLC executive who replaced Randy Eresman at the helm in June, has signalled that “radical change” is in the offing, including a sharp reduction in the number of assets the company will spend money on. That is likely to mean job cuts, but the company has not provided estimates of such a move.
Once one of Canada’s most valuable corporations, Encana struggled as executives tried numerous ways to respond to slumping natural gas markets, including forming joint ventures and attempting to increase production of more valuable liquids-rich gas from its properties, with mixed results.
In the midst of poring over the details of the business, Mr. Suttles said last month that Encana needs to concentrate capital on its best prospects rather than employing a scatter-shot approach. Other potential changes could include a reduction in the company’s dividend, analysts have said.
Investors remain wary of the moves. Encana shares rose slightly on Tuesday, but are down more than 8 per cent year-to-date.
In a note to clients this week after a meeting with Mr. Suttles, Canaccord Genuity analyst Phil Skolnick warned of some potential moves that could still hit the stock. They include a sizable cut in the dividend that would send retail investors scurrying, falling production and cash flow as the company reallocates capital, and a drive to sell dry-gas asset sales into a weak market.
Under the new management structure, Mike McAllister, who headed up the Canadian division, becomes chief operating officer. David Hill becomes vice-president of exploration and business development.
Remaining in their current roles are Sherri Brillon as chief financial officer, Renee Zemljak as vice-president of midstream, marketing and fundamentals, Terry Hopwood as vice-president and general counsel and Ryder McRitchie as vice-president of investor relations and communications.