Notable Calls: Tilray, Ovintiv and S&P/TSX Capped Energy Index
Ovintiv Inc. Chief Executive Officer Doug Suttles has mapped out the end of his tenure at the company, announcing he will retire after eight years at the helm of the company formerly known as Encana.
Suttles will be succeeded by Brendan McCracken, who has been with the firm for 25 years, and is currently the company's president. His last day will be August 1, the company said.
Under Suttles’ tenure, the company made a number of transformational moves, the most prominent of which was the corporate name change to Ovintiv and redomiciling to the U.S. in January 2019.
Suttles argued at the time that redomiciling to the U.S. would attract U.S. index funds to hold the stock, with the potential for passive ownership to increase to 20 per cent to about US$1 billion.
While shares of the company have recovered somewhat during the surge in crude prices since the beginning of 2021, the company has lost about 65 per cent of its value during Suttles’ tenure.
That move south of the border effectively marked the end of a Canadian corporate behemoth with roots stretching back to the 1880s and the construction of the Canadian Pacific Railway.
The name change was far from the only transformational move Suttles pursued during his tenure. Under his watch, the company honed in on a handful of energy formations, namely the Permian and Eagle Ford in the United States, and the Montney and Duvernay formations in Canada.
The company also cut hundreds of jobs in the wake of the oil price rout of 2014 and slashed its dividend 79 per cent in late 2015.
Under Suttles’ watch, the company also undertook significant dealmaking, both in terms of acquisitions and divestitures. Among the most prominent deals were the acquisition of Newfield Exploration Co. in 2019 for US$5.5 billion and the 2014 deal to purchase Texan oil producer Athlon Energy for $7.1 billion.
While those acquisitions grabbed headlines as a major shift from natural gas back to oil for the company, Suttles also identified the company’s royalty-free lands as a ripe source of funds. In 2014, Encana announced a $1.5 billion initial public offering of PrairieSky Royalty. Encana sold off its remaining stake in the company for $2.6 billion a few months after the IPO was completed.