Encana

PanCanadian Petroleum was founded in 1971 through the merger of Canadian Pacific Oil and Gas and Central-Del Rio Oils. CPOG had been founded in 1958 by the Canadian Pacific Railway as a vehicle to produce petroleum on the land grants it had received in the nineteenth century. Central-Del Rio was a small independent producer run by oilman Neil McQueen, and the CPOG had acquired gradually a majority holding in the company. After the creation of PanCanadian, Canadian Pacific Limited remained the company's majority shareholder with approximately an 87 per cent stake. PanCanadian's freehold leases, which it inherited from the railway, gave it the largest reserves of any Canadian petroleum company.

The Alberta Energy Company was created in 1973 by the provincial government under premier Peter Lougheed as a mechanism for Albertans to invest in the Syncrude project. Initially, the company was half owned by the government and half owned by the public. The AEC also produced gas in the Suffield Block and in Primrose Lake. The government began in 1983 to reduce its equity in the company, and in April 1993 it sold off its remaining 36 per cent stake. In 1994, Gwyn Morgan assumed the presidency and led the company for the duration of its existence. As a fully public company, the AEC grew substantially in the 1990s and became Canada's largest producer of natural gas.

In April 2002, Pan Canadian Petroleum Ltd was spun out of Canadian Pacific Limited. It subsequently merged with Alberta Energy Corporation to form EnCana. Gwyn Morgan was named president and CEO.

On Wednesday, 14 September 2005, EnCana surpassed the Royal Bank of Canada to become Canada's largest corporation by market capitalisation, with a value of $51.841 billion.[1]

In 2009, EnCana completed the corporate spin-off of Cenovus Energy, which held its oil business, representing one-third of its total production and reserves, and EnCana Corporation retaining the natural gas business.[2][3] Investors favoured the split as it gave them the flexibility to choose between investing in oil, gas, or both.[4]

In December 2012, Encana announced a US$2.1 billion joint venture with state-owned, Beijing-based PetroChina through which PetroChina received a 49.9% stake in Encana's Duvernay Formation acreage in Alberta. This was in line with the rules that "favor minority stakes over takeovers" since Prime Minister Stephen Harper's December 7, 2012 prohibition of purchases by state-owned enterprises seeking to invest in Canadian oil.[5][6] By the end of 2012, Encana's staff had increased to 4,169 employees.[7]

Encana and Cenovus' headquarters, The Bow in Calgary, was completed in 2013, becoming the tallest building in Canada outside of Toronto.[8] The project, owned by H&R REIT, was announced as Encana's headquarters in 2006, prior to the Cenovus split.[9]

In November 2013, the company cut its dividend, announced layoffs of 20% of its employees, closure of its office in Plano, Texas, and plans to sell assets and to found a separate company for its mineral rights and royalty interests across southern Alberta.[7] It planned to invest 75% of its 2014 capital budget into 5 projects: Projects in the Montney Formation and the Duvernay Formation in Alberta, the San Juan Basin in New Mexico, Louisiana's Tuscaloosa Marine Shale, and the Denver-Julesburg Basin (DJ Basin) in northeast Colorado, Wyoming, and Nebraska.[7][10]

When the restructuring was announced in October 2019, the Financial Times solicited several reactions to the move. Tim Pickering, an asset manager in Calgary, stated that the announcement "highlights what we’ve known all along, that outside foreign investment is losing interest in the Canadian energy sector." Meanwhile, Martin Pelletier, a portfolio manager in Calgary, said that "risk is a critical factor when making capital-allocation decisions, and currently Canada is viewed as a high-risk region."[14] In another article, Canadian Business quoted Jennifer Rowland, an analyst with Edward Jones, who said "I am not surprised at all by the move. Post the Newfield deal, 60 per cent of Encana’s production is in the U.S. and two of its key growth drivers are in the U.S. Plus CEO Suttles doesn’t live in Canada; he lives in Denver."[15]

The name change, notably the dropping of "Cana" was met with criticism in Canada. Encana's departure from Canada "only intensified the gloom enveloping the Canadian energy industry after foreign companies sold more than US$30 billion".[16] Youssef Youssef, a commerce professor at Humber College in Toronto, also takes this perspective, citing the difficulty in changing a brand as recognizable as this one "(Encana) was a solid brand and it had resonance within the Canadian oil industry, and everybody knows the company, so to change the brand, it takes a lot of steps.”[17]

In April 2021, a year after Encana restructured, the Globe and Mail published a lengthy investigation entitled "Who killed Encana?" In the piece, the authors interviewed the company's founders, Morgan and O'Brien, who disagreed with one another on the causes of the company's demise. Morgan laid the blame on the Liberal federal government, which he believed had created a climate hostile to energy investment. He also stated that if Encana had not spun off its oil business into Cenovus, the company "would still be in Canada." O'Brien, on the other hand, said "I don't think the government had anything to do with what happened to Encana, frankly." Rather, he believed the company's difficulties, and its migration to the United States, were the product of the U.S. shale revolution that began around 2008. On the question of the Cenovus split, he said both companies were hit by the revision in prices after 2008, and that "Cenovus has been terrible. Encana has been terrible."[18]