Encana Corporation said on Thursday it intends to move its corporate domicile from Canada to the United States and rebrand under a new name, amid a growing investor and company exodus from the Canadian oil patch plagued by pipeline capacity shortage and general anti-oil sentiment.
Encana's move to the US is expected to take place early next year, pending shareholder, stock exchange, and court approvals, the company said in a statement.
The new company will rebrand under the name Ovintiv Inc. After completing its corporate base shift and adopting the new name, the new company will begin trading on both the New York and Toronto stock exchanges under the ticker symbol "OVV."
"A domicile in the United States will expose our Company to increasingly larger pools of investment in U.S. index funds and passively managed accounts, as well as better align us with our U.S. peers," CEO Doug Suttles said, noting that the move will not affect day-to-day operations.
"The Company is generating significant free cash flow, returning cash to its shareholders and generating industry-competitive liquids growth from its multi-basin portfolio of assets. It is this unique combination that the Company believes will ultimately be differentiated by the market," Encana said in today's release.
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Encana has several high-impact assets in the U.S., including in the Permian, the Bakken, the Eagle Ford, the Anadarko basin, and the Uinta Basin in Utah. At the beginning of this year, Encana acquired Newfield Exploration Company in an all-stock transaction, gaining additional exposure to the Permian, Anadarko, and Montney basins.
Meanwhile, in Canada, insufficient market access and continued uncertainty over additional pipeline capacity have finally caught up with the growth projections of the Canadian Association of Petroleum Producers (CAPP), which estimates that Canada's crude oil production will continue growing from now until 2035, but at a much slower pace than previously thought.
Most recently, Canada's energy giant Husky Energy slashed jobs earlier this month as part of its reduced annual spending plans.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More