Encana's Canada Ops Head Leaves Company

CALGARY - The president of Encana Corp.'s Canadian division, Mike Graham, has resigned his position at the Calgary natural gas producer, a company spokesman said Tuesday.

Graham will be replaced on an interim basis by his deputy, Mike McAllister, who currently serves as senior vice-president of the Canadian division, the spokesman said.

No reason was given for Graham's departure from Encana, North America's second-largest natural gas producer. But the company has been under a cloud recently due to the continued oversupply and low price of natural gas. Ratings agency Standard & Poor's cut its rating on Encana's debt last week by one level to BBB due to the continued weakness in the natural gas markets.

Graham is "moving on," Executive Vice-President Eric Marsh said Tuesday when he was asked about Graham by an audience member at an energy conference in Vail, Colo., hosted by the investment bank Credit Suisse. "It's business as usual at Encana," Marsh said. "We've got a lot of depth of leadership, so we'll be fine."

Encana shares have lost more than a third of their value over the last year, and declined 1.8% to $19.93 on the New York Stock Exchange Tuesday.

Copyright (c) 2012 Dow Jones & Company, Inc.


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Ben | Feb. 8, 2012
EnCana made a conscious decision back in 2005 or so to focus exclusively on natural gas. It divested in short order, and with handsome short term gains, major oil discoveries/holdings in the Gulf of Mexico, UK North Sea, Ecuador, and Brazil. It split and spun off its oilsands SAGD holdings (now Cenovus). Were those assets retained, EnCana would be delivering real shareholder value now, as is evident from companies that chose to retain their liquid assets. Unfortunately, even at $19, its stock seems overpriced, given that the Henry Hub value is hovering at a mere $2.50 currently and the global economy is not about to recover. It appears that Mr. Graham was a victim of the recent bad publicity - EPA report on acquifer contamination in WY as a result of fracking operations (and which has been disputed by EnCana and the industry). The real reason however can be attributed to poor strategy development and implementation at the Executive level. Wont be surprising if the company soon announces restructuring to align with the new reality - low natural gas prices for the predictable future.

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