Encana names BP Gulf spill veteran as its new CEO
By Scott Haggett and Kristen Hays
CALGARY/HOUSTON (Reuters) - Encana Corp (ECA.TO: Quote) named former BP Plc (BP.L: Quote) executive Doug Suttles, who played a major role in responding to BP's disastrous 2010 Gulf oil spill, as its new chief executive on Tuesday as Canada's largest natural-gas producer searches for a new course following years of strategic missteps.
Suttles, a nearly three-decade veteran of the oil and gas industry, is taking the reins from interim CEO Clayton Woitas, a board member who replaced former CEO Randy Eresman temporarily when Eresman left the company unexpectedly in early January. Suttles was also named an Encana director.
Encana shares have dropped 41 percent over the past two years as the company weathered low gas prices and a balance sheet weakened by a focus on growth despite falling revenue. Investors will look to Suttles to reverse the company's course, but no one expects quick moves.
"It will take time to turn the ship around so I don't expect miracles," said John Stephenson, a portfolio manager at First Asset Investment Management, which owns Encana shares. "But I think it's really positive. I think it good that he's an outsider. Taking someone off the bench (internally) would have viewed much more negatively."
Indeed, Suttles said he plans to study Encana, which operates in Canada and the United States, before making any decisions on where he'll take the company.
"My goal over the coming months is to gain an in-depth understanding of the company's assets, capabilities of the staff, and how we are currently performing in each of our key areas," he said on a conference call. "With that understanding ... I will be in a position to formulate a compelling vision for Encana's future."
Eresman led Calgary, Alberta-based, Encana for seven years. He faced criticism from investors over strategic changes that included spinning off the company's oil operations as oil prices strengthened and accelerating natural gas production even as new shale-gas supplies flooded the market and pushed prices down.
Encana also faces a U.S. Department of Justice probe into whether the company illegally colluded with Chesapeake Energy Corp CHK.N to lower the price of exploration lands. Continued...