Encana shares edge lower after CEO suddenly resigns

Mon Jan 14, 2013 10:43am EST
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* CEO resigned late on Friday

* Analysts say company could be takeover target

* Shares down 0.3 pct

CALGARY, Alberta, Jan 14 (Reuters) - Encana Corp shares dipped on Monday as investors brushed off the surprise resignation of the chief executive officer of Canada's largest natural gas producer.

The shares were down 0.3 percent at C$19.45 after Randy Eresman, 54, said late on Friday that he planned to leave his position immediately and retire.

Board member Clayton Woitas, an experienced Canadian oil and gas executive, is assuming Eresman's position while Encana searches for a permanent replacement.

Analysts said the appointment of an interim CEO might be a signal that the company is up for sale. Nexen Inc sold itself to China's state-owned CNOOC Ltd after its chief executive officer was fired last year and an interim CEO was put in place.

New federal rules limiting foreign investment by state-owned companies may reduce the number of potential buyers for Encana, which has a market capitalization of C$14.3 billion ($14.5 billion). But its massive natural-gas reserves from conventional and shale-gas fields in Canada and the United States could attract the attention of deep-pocketed international oil companies looking to supply liquefied natural gas projects.

"The appeal of Encana as an (acquisition) target relates primarily to their vast feedstock of gas opportunities to support LNG development both on West Coast Canada and on the U.S. Gulf Coast," CIBC World Markets analyst Andrew Potter said in a research note.   Continued...