CEO exits serve as warning to energy industry
By Scott Haggett
CALGARY, Alberta (Reuters) - The sudden departures of two energy industry chief executives this week should serve notice to their counterparts that corporate boards and the shareholders they represent are no longer willing to tolerate weak management.
Both Nexen Inc, NXY.TO a global oil producer and oil sands operator, and Connacher Oil and Gas Ltd CLL.TO, which operates a small thermal oil sands project, unexpectedly dismissed their chief executives in the past week, replacing them with stand-in managers until permanent replacements are found.
The two oil companies are very different but shared one troubling trait: In a time when oil is selling for around $100 a barrel, neither Marvin Romanow at Nexen nor Richard Gusella at Connacher convinced investors that they could take advantage of the good times.
Reaction to their exits was immediate, with shares of both companies rising as much as 9 percent after the news broke.
"These were CEOs of oil companies in a $100 dollar oil environment with relatively weak share prices that were dismissed, and the stocks reacted quite positively," said Michael Dunn, an analyst at FirstEnergy Capital. "That will not go unnoticed in the industry."
Graphic on share prices link.reuters.com/rap95s