North American onshore heavyweight Encana Corp. has called a special meeting of its shareholders for mid-January to secure approval to rebrand as Ovintiv Inc. and move the Calgary headquarters to Denver.

The restructuring, announced in late October as part of the 3Q2019 results,

According to the definitive proxy statement/prospectus filed on Wednesday with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities, securityholders are scheduled to vote on the proposals Jan. 14. The single reorganization resolution requires approval by at least two-thirds of votes cast.

“The migration to the U.S. from Canada is expected to expose the company to increasingly larger pools of investment in U.S. index funds and passively managed accounts,” management said.

Most of the company’s “assets, people and production are in the U.S. The migration to the U.S. from Canada will better align our business operations with the corporate domicile, as well as our U.S.-based peers.”

Today, more than 80% of the company’s capital investments, 75% of revenues and around 70% of proved reserves are located in the United States.

In addition, rebranding as Ovintiv would reflect “the significant and recent transformation of the company,” it said. Ovintiv would trade on the New York and Toronto stock exchanges under the ticker symbol "OVV."

The company also wants to complete a consolidation and share exchange for effectively one share of Ovintiv common stock for every five common shares of Encana. The board has unanimously recommended a vote for the reorganization resolution.

The strategic initiatives “are being implemented to further create shareholder value and to recognize the company's significant transformation over the last five-plus years,” management said.

Encana today has a multi-basin portfolio with nearly 1.3 million net acres within the Permian, Anadarko and Montney formations. This year, more than 80% of total capital investments are being allocated to development plays in the United States, management noted.

“Oil and condensate production has grown seven-fold since 2013. Average net daily production in the most recent quarter was approximately 605 million boe/d, including 237 million boe/d of oil and condensate.”

Last month Letko, Brosseau & Associates Inc., an independent investment manager based in Canada, said it would vote against Encana’s proposed exit to the United States.

Encana's CEO Doug Suttles, who moved to Denver in 2018, said in November the company had “a long relationship with Letko and most certainly appreciate their investment in our company.”
However, Suttles argued that the change in corporate domicile would not change how the day-to-day operations were run “nor diminish the important role our Canadian assets play in our portfolio today...Furthermore, we know that most of our large investors in Canada also own many of our U.S.-domiciled peers today.

“We deeply believe this move ultimately will be positive for all shareholders as exposure to the significantly larger U.S. market and funds is estimated to create more than $1 billion of additional demand for our shares. As we said at the time of the original announcement in late October, 'our actions show that we will leave no stone unturned to capture the value we deeply believe exists within our equity'."