Encana Corp. Chief Executive Officer Randall Eresman resigned effective Friday and will be replaced by board member Clayton Woitas until a permanent successor can be named.
Eresman, 54, will be an adviser of Canada’s largest natural gas producer until Feb. 28, according to a statement from the Calgary-based company Friday. Woitas has been a company director since 2002 and is CEO of Range Royalty Management Ltd.
“Now is the right time for me to step down and to turn over leadership of Encana,” said Eresman in the statement.
Under Eresman, who’s been CEO since Jan. 1, 2006, Encana has been pursuing a strategy of asset sales and joint-venture agreements to boost cash flow as North American natural gas prices dropped to a decade-low in April.
Last month, Eresman announced a deal to sell a 49.9 percent stake in the company’s Duvernay shale formation in Alberta to PetroChina Co. for C$1.18 billion ($1.2 billion). PetroChina, Asia’s biggest oil producer, also agreed to pay C$1 billion over four years to fund development of the project.
The PetroChina agreement brought Encana’s net proceeds from joint ventures and asset sales to C$3 billion last year, up from an annual target announced at the company’s June investor day of C$2 billion to C$2.5 billion.
Mitsubishi Corp. agreed to pay C$1.46 billion for a 40 percent stake in development of Encana’s Cutbank Ridge shale gas acreage in British Columbia a Alberta on Feb. 17. The deal came eight months after PetroChina walked away from an agreement to take a 50 percent stake in a larger position in Cutbank Ridge that also included existing production.
Some shareholders were speculating a CEO change was possible given the performance of the shares in recent years, Randy Ollenberger, an analyst at BMO Capital Markets in Calgary, said in a telephone interview.
Encana has fallen 43 percent to C$19.50 today in Toronto trading, from C$34.11 at the end of 2009.
Eresman helped to create the notion of amassing large resource positions in unconventional tight and shale gas formations, then moving to tap the reserves in a manufacturing mode, said Ollenberger, who has an outperform rating on Encana shares and owns none.