Former BP plc operating chief Doug Suttles on Tuesday took over as CEO and president of Encana Corp., one of the largest natural gas producers in North America.
Board member and interim CEO Clayton H. Woitas had run the company since January, when CEO Randy Eresman resigned following seven years as the chief (see Shale Daily, Jan. 15). Woitas will take over as chairman once David O'Brien retires this year.
Suttles discussed his new role just hours into his tenure during a conference call. The Calgary operator's decision to focus capital on its highest-return assets already has positioned it for the future, he said.
"My goal over the coming months is to gain an in-depth understanding of the company's assets and how they are performing in each key area. With that understanding, I will be in a position to form a compelling vision" and lay out a strategy for the long-term.
"I want to do this once and I want to do it right," he told analysts. "It will be some time before I have a clear and consistent vision for Encana...In the meantime, we will be focused on delivering the 2013 plan laid out earlier this year." The company also "will maintain a heightened focus" on capital discipline.
Encana in February said it would cut capital spending to $3 billion from $3.2 billion, with joint venture partners adding about $750 million (see Shale Daily, Feb. 19). Close to 80% of this year's spending is directed at oil and natural gas liquids; there also is a revamped gas drilling program in the Haynesville Shale. Woitas said at the time Encana couldn't rely on higher gas prices but it could "control the costs" associated with working in the onshore.
A mid-year operational review in July may lead Encana to "reallocate capital amongst various programs," said Suttles. Anything "noteworthy" would be addressed next month during a second quarter conference call. "I am committed to delivering a clear, measurable plan" to meet financial and operational objectives," he added.
Suttles has been serving as a board member of Ceres Inc., which is using advanced plant breeding and biotechnology to develop dedicated energy crops as raw materials for renewable transportation fuels, electricity and bio-based products.
Suttles retired from BP in 2011 after overseeing the oil major's response to the 2010 Macondo well blowout. From January 2009 to March 2011, he was COO of BP Exploration & Production Inc., where he led global energy and production activities, technology groups, and learning and development organization. From November 2006 to December 2008, Suttles was president of BP Exploration (Alaska) Inc. He also held similar responsibilities as president of BP Sakhalin from June 2005 to November 2006.
Before joining BP, Suttles worked from 1983 to 1988 as an engineer for ExxonMobil Corp. He also has served as a board member of the University of Texas at Austin's Engineering Advisory Board since 2007. He graduated from the university in 1983 with a bachelor of science degree in mechanical engineering.
During the conference call, Suttles was asked how his global experience with BP would translate into helping Encana develop its onshore North American resources.
"I've had the opportunity to work in many of the great basins around the world, both here in North America and internationally," Suttles said. As an "engineer by training, I've spent a good deal of time practicing that..It gives me a great position to help make judgments in early resource plays..."
Suttles said his "broad experience" would help guide his management of Encana. "In the end, this business is very dependent upon great assets and being incredibly efficient in how they are developed," he said. "It's a very capital-intensive business..." At Encana, "one thing I will be looking at is capital efficiency, which should be one of the best in the industry and improving continuously."