New chief executives often means new strategies – especially when the fresh face is in charge because shareholders grew tired of the previous boss. Encana Corp.’s new top executive will host his first conference call during this week’s earnings parade, but investors expecting Doug Suttles to roll out a grand vision will be disappointed.
This stands in contrast to the pace at which Hal Kvisle laid out his plans for Talisman Energy Inc. when he took over in an abrupt management change last fall. He immediately revealed his plans for the company, and provided further insight in his first quarterly conference call. Mr. Kvisle, however, was a board member before he was named chief executive officer, so he had less homework to do.
But investors and analysts are willing to be patient. “New president and CEO Doug Suttles will be formulating a defined corporate strategy which is expected to be unveiled in the autumn timeframe,” RBC Dominion Securities analyst Greg Pardy said in a research note.
Encana, which reports on Wednesday, selected Mr. Suttles, a company outsider, to run the company last month. He shied away from outlining, at least publicly, what he might do to turn around the sluggish natural gas outfit. But even without a rock-solid strategy, new information about Encana’s previous plans could still provide hints.
The Calgary-based company plans to sell between $500-million to $1-billion in assets in 2013, and the market is looking for an update. Encana has been auctioning so-called legacy assets – properties with less growth potential – to raise money. If these types of properties are yanked off the block, it might signal Mr. Suttles wants to reconsider Encana’s attitude toward mature projects.
Talisman reports next week.
Executives at oil companies and pipeline outfits will be quizzed about transportation methods after the train disaster at Lac-Mégantic, Que. The runaway cars were filled with oil and exploded when the train crashed in the first week of July. More than 40 people have been confirmed dead.
Oil companies have turned to rail as a way to ship crude around the continent given current pipeline constraints. Energy executives have been careful not to use the train disaster to support their argument that new pipelines – their preferred method of transportation – are superior to rails.
But the string of quarterly earnings calls means questions about shipping oil by rail, and executives’ carefully worded answers, will be in the spotlight again.