Randy Eresman was wiped out. The toll of leading Encana Corp., one of Canada’s most prominent, although struggling, energy companies caught up with him.
He knew it, investors knew it, and Encana’s board members knew it. Moreover, the company’s directors knew it was time for a new leader.
“Randy was getting fatigued,” Clayton Woitas, an Encana board member and now its interim chief executive, said in an interview Monday when discussing Mr. Eresman’s sudden retirement as CEO. “He indicated to a number of board members how fatigued he was in the public marketplace.”
Outsiders were telling the board the same thing: “The feedback we were getting from the public market is they could see this fatigue on Randy’s part,” Mr. Woitas said.
The natural gas giant announced Mr. Eresman’s retirement Friday. Asked whether the board tried to persuade him to stay, Mr. Woitas said: “It was the recognition that it was time to move on with a fresh face representing Encana.”
Mr. Woitas, who expects a new chief executive to be named within the next three to six months, said Encana’s $2.2-billion joint venture deal with PetroChina, announced in December, created an opportunity for Mr. Eresman to leave.
“I think the coup de grâce for Randy was concluding the very large joint venture on the Duverney with a Chinese oil company,” Mr. Woitas said. “With that concluded, I think Randy felt very good about how strong the company has now become both financially and operationally. [It was] the time to hit the retirement trail.
“As board members, we said: ‘If we’re going to go down this trail, we probably should expedite it and we want a very clear path to our new president and CEO,” Mr. Woitas said. “It is a very key position and we can’t go about it tip-toeing around – we have to boldly step forward.”
Mr. Eresman has faced harsh backlash from investors over the years. In 2010, he said he wanted to double natural gas production in five years, expecting the commodity to rally. When prices remained in the gutter, the lifelong Encana employee backed off natural gas, opting to focus on the more profitable natural gas liquids such as butane and oil. Investors argued because the company was so heavily weighted toward natural gas, even spending millions on other commodities would only make a small difference. They also questioned whether Encana had lost focus.
Meanwhile, Mr. Eresman, who took over as CEO in 2006, was working to find partners for the company’s vast properties, which would give the company the financial firepower to develop projects.
Mr. Woitas acknowledged if investors blame Mr. Eresman for Encana’s troubles, the company’s directors are also at fault.
“We’re equally as innocent and equally as guilty,” he said.
The temporary CEO does not want to see Encana on the auction block. “It is not ready. It is like a young teenager – we have a long way to go to reach maturity.”
Retirements usually come with a transition period, although Mr. Eresman’s was instant. He will leave the board at the end of February, too.
Encana releases its budget and guidance next month. Mr. Woitas does not yet know which assets he will favour when figuring out where the company will spend money.
Mr. Woitas, best known for his tenure running Renaissance Energy Ltd., stressed he will keep to Encana’s current game plan until a new CEO fills his shoes.
“Once the new CEO is appointed, I quickly go out the door,” he said. “I emphasize quickly.”
He will stay on the board, but Encana’s corner office is not for him. “I never signed up for this.”