CALGARY – Natural gas giant Encana Corp. said Friday that CEO Randy Eresman has retired after 35 years at the company.
Eresman’s departure from the top job is effective immediately, but he’s agreed to stay on the board in an advisory role until the end of February.
Clayton Woitas, a director on Encana’s board and chief executive of Range Royalty Management LTd., has been appointed CEO on an interim basis while the board searches for a permanent replacement.
Company spokesman Jay Averill said he wasn’t aware of any particular shareholder push for new blood at Encana, as has been the case at some other companies lately.
The board will be searching internally and externally for Eresman’s replacement, Averill added. Unlike other high-profile CEO retirements in the oilpatch lately, no successor had been groomed to take over from Eresman.
“There is a lot of bench strength in the current executive team. Really, it’s up to the board to ultimately decide who the next person will be,” he said.
One of the biggest changes during Eresman’s tenure was the spinoff of Encana’s oil assets into Cenovus Energy Inc. (TSX:CVE) in late 2009 — a move some observers have questioned, but Eresman has publicly stood behind.
The rationale behind the split was to allow investors to better see the value of each distinct side of the business.
But being almost entirely focused on natural gas has posed challenges for Encana, with prices of that commodity remaining stubbornly low amid a North American supply glut.
To cope, Encana has been selling many of its assets and has been inking joint ventures, such as the recently announced $2.2-billion partnership with PetroChina in the Duvernay shale in Alberta.
An earlier $5.4-billion deal with the Chinese state-owned company to work together in northeastern B.C. fell apart in mid-2011 amid a disagreement over how the assets would be operated.
Last year, accusations surfaced that Encana and U.S. rival Chesapeake Energy had colluded to keep land prices low in Michigan.
In September, Encana said its board of directors found no evidence the company and Chesapeake Energy discussed ways to avoid bidding against one another for land leases in 2010.
Probes by the U.S. Department of Justice and Michigan’s attorney general are ongoing and Encana says it’s co-operating.
Encana chairman David O’Brien praised Eresman, saying “Randy has played a key role in the development of Encana and in his more than three decades with the company he has made many important contributions to the company’s success.”
Eresman, 54, said he has had a “wonderful and fulfilling” time at Encana and its predecessor company, Alberta Energy Company Ltd., where he started as a summer student in 1978.
He was appointed chief operating officer in 2002 and had been CEO since 2006.
“After a highly successful 2012, Encana is once again financially and operationally very strong and well positioned to execute on its plans to rapidly transition to a more balanced commodity portfolio,” Eresman said in a release.
“Now is the right time for me to step down and to turn over leadership of Encana to someone with the focus, drive and commitment to complete the transition,” he said.
Eresman added that while he has always had “a wide variety of interests, I will now be able to pursue them more extensively.”
Eresman is the latest high-profile oilpatch CEO to exit over the past year or so. Some departures have been more abrupt than others.
Rick George retired from Suncor Energy Inc. (TSX:SU) in May, handing the reins to then-chief operating officer Steve Williams. Enbridge (TSX:ENB) CEO Al Monaco took over from Pat Daniel this fall. In both of those cases, the succession plans had been announced several months before the actual handover.
About a year ago, Marvin Romanow suddenly left as CEO of Nexen Inc. (TSX:NXY), the international oil and gas producer that ultimately agreed to be taken over by CNOOC Ltd. for $15.1 billion. Investors had been growing increasingly impatient with a slow rampup at its flagship oilsands project and other operational glitches.
In September, Talisman Energy Inc. (TSX:TLM), signalling a change in direction, announced then-CEO John Manzoni had “agreed to” leave and that board member and former TransCanada Corp. CEO Hal Kvisle would be taking over.