EnCana's Morgan says Shell takeover rumours just that
(CBC) - EnCana president Gwyn Morgan refuted rumours of a takeover Tuesday, as he announced he will be stepping down at the end of the year, ending a run that saw him build the largest independent oil and gas company in the world.
"I guess if we really thought that, I would stay on and fight," Morgan, 59, said of speculation that Royal Dutch Shell has been ready to launch a takeover bid. "But the fact is, that's just a ridiculous rumour.
"We have never, ever heard anything material from any of the large companies about purchasing EnCana, and have no reason to think we will."
Richard Moorman, an engineering analyst with Ross Smith Energy Group, says Royal Dutch Shell is the only large company that would both be interested and could afford the takeover - and that the rumours have been persistent.
"They do have operations in common in new areas," he said. "Shell certainly needs the kind of assets that EnCana has."
EnCana was created in early 2002 when Morgan merged his Alberta Energy Company with PanCanadian, and is now North America's largest natural gas producer with a market capitalization of almost $50 billion, the second highest in the country after the Royal Bank.
EnCana made almost $800 million US in its second quarter of 2005, triple its profit in the same period the year before.
Moorman says the company has been successful with difficult explorations.
Morgan "chose to make the most of North America, he did that very well, and it paid off," Moorman said. "EnCana is actually one of the best positioned companies for future growth that we come across in our studies."
Morgan says it is now time to move on, after marking 30 years in the province's oil and gas industry this month.
"What we want to do next is move into another phase of our life and enjoy the building of that phase in a different way," Morgan said, adding he and his wife Pat discussed their future during time on Vancouver Island over the summer. "You can see the period of company building for me, her certainly, has been long and challenging, interesting and rewarding."
Morgan will stay on a executive vice-chairman for 2006, working mainly in an advisory capacity to Randall Eresman, the company's chief operating officer who will step into the CEO's shoes.
Eresman, a petroleum engineering graduate from the University of Wyoming, joined the Alberta Energy Company in 1980. He was appointed chief operating officer of EnCana soon after its creation.
© the CBC, 2005