Roughneck Mag

Encana’s Boss Moves to Denver

By Scott Jeffrey, Publisher

How To Send The Wrong Message

We have long memories in the Canadian oilpatch.

We remember the introduction of the NEP as if it was yesterday, and not 38 years years ago. We remember the good sense decision that brought 1500 Esso employees to Calgary from Toronto in 2005. We also remember the TCPL decision to move its headquarters from Toronto to Calgary in the early ‘90s. We remember the ill-considered move to Denver of Gulf Canada’s leadership team in 1996, but more on that later. As I said, we have long memories, and we’re sensitive to news that could be could be seen as the start of a worrisome trend in the industry.

And because we’re a bit sensitive and have long memories, we reacted with alarm last month when it was announced that Encana CEO Doug Suttles, who was appointed to the position in 2013, was moving to Denver. And despite all the anxiety alleviating phrases that were used to calm us down, it didn’t. Of course, it didn’t help that a couple of news outlets might have announced that the whole company was consolidating in the Mile High City.

Doug Suttles is a far cry from the mercurial J.P. Bryan of Gulf Canada infamy. Although both hail from Texas, J.P.’s shoot from the lip style and bullying ways didn’t endear him to the industry here. Bryan’s decision in 1996 to move the entire executive team to Denver was based mainly on personal reasons, and the folly of the move was apparent before the Gulf team moved back to Calgary in 1999.

An employee of BP for more than 22 years, Doug Suttles was in the news a lot over the Deepwater Horizon spill in the Gulf of Mexico. He was on the ground as the cleanup progressed, and although his handling of the job was not unmarred by controversy, he did a lot better than Tony “I want my life back” Hayward, who was BP president at the time. As a bonus, he even got to meet Kevin Costner to explain their remediation efforts.

To misuse a metaphor, Mr. Suttles was able to throw some oil on troubled waters back in 2010. That is why the announcement that he is moving to Denver, even though he’s head of a Canadian oil and gas company, seems like an bit of a public relations disaster.

To be fair, Encana has about 800 employees in Denver, to Calgary’s 1,000, and the company has sizeable land positions south of the border. However, they don’t have a lot of land left in Colorado, after selling their Denver-Julesberg Basin properties to Crestone Peak Resources in 2016. That sale to a Canadian owned company amounted to almost 20 per cent of their U.S. wells. Given that disposition, I’m sure the oil and gas community in Denver heaved a sigh of relief when Encana renewed their lease at Republic Plaza, committing the company to over 300,000 square feet in Denver’s tallest building. The lease apparently runs until 2026.

This background serves to indicate that although they could have moved to a number of locations to be closer to their Permian and Eagle Ford holdings in the U.S., they chose to remain in Denver and not disrupt their resident workforce.

As we know, nothing is certain in the industry, and sometimes companies make decisions that seem baffling to us on the street. However, this information from Denver may serve to calm the Calgary community. While there many locations that would suit an oil and gas company in the U.S,, there is really only one head office location in Canada, and that is Calgary. While Encana’s main resource base lies in the Duvernay and Montney fields, no one would suggest that they move to Grande Prairie or Fort St. John just so they could be closer to the wells.

So, while we might question Doug’s stick handling prowess when it comes to moving south of the border, no one can deny that he’s entitled to a life outside of Encana. Unfortunately though, you’re going to be under a microscope if you’re the head of a public company.

However, if more than one indispensable employee moves with him, expect the rumour mill to ramp up immediately. As it is, with our long memories, we’ll remember this incident for a long time, and any subsequent announcement that causes us undue alarm and discomfort.

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