EnCana Corp. founder Gwyn Morgan announced that he will step down as CEO and president of the company at the end of the year. Morgan said he will remain executive vice chairman of the company for 2006, working mainly as an advisor for the new president and CEO, Randall K. Eresman, who currently is COO of the company.

At a news conference, Morgan discounted rumors that EnCana’s board was pushing him out because he refused to negotiate a sale of the company. EnCana released a statement last week saying that it knew nothing about a possible takeover bid by Shell or any other producer (see Daily GPI, Oct. 21).

“It’s amazing what can be created out of the ether, and we made it as clear as anybody could last week that there never has been any discussions,” Morgan said. “There never has been any substance that we know of. We know of nothing. Nothing.”

The rumor pushed EnCana’s share price up about 10%. Shell declined to comment. In its statement, Calgary-based EnCana said the company’s board and management team believe the independent’s “continued independence” was the best way to create long-term value for shareholders.

“When EnCana Chairman David O’Brien and I announced the creation of EnCana Corp. three and a half years ago, our vision was to build a flagship, Canadian-headquartered energy company that would be one of the strongest in our industry,” Morgan said in a statement last week. “The name EnCana was chosen from the words ‘energy Canada.’ Since that time, investors have realized a total shareholder return of approximately 200% as employees delivered top-tier production and reserves growth.”

With these achievements in mind, Morgan, 59, apparently believes his time has come to step down. During the call, he said that he and his wife, Pat Trottier, had agreed last summer at their Vancouver home that ending his career at EnCana in his 30th year with the company would be a good decision.

Morgan joined EnCana predecessor Alberta Energy Co. (AEC) in October of 1975 and was responsible for drilling the wells that resulted in AEC’s first production. Morgan was head of AEC’s oil and gas division until his appointment as president and CEO in 1994. In early 2002 he led the merger of AEC and PanCanadian to form EnCana (see Daily GPI, Jan. 29, 2002). The company is now North America’s largest gas producer and independent oil and gas company with an enterprise value of US$50 billion.

EnCana’s Chairman David O’Brien said Eresman is the “natural and capable successor” to Morgan. Eresman is a petroleum engineering graduate from the University of Wyoming, who joined AEC in 1980. He played a key role in the building of AEC and was appointed COO of EnCana soon after its creation. He is credited with leading the development of EnCana’s “resource play” strategy of focusing on unconventional onshore gas resources in North America.

While many of the largest oil and gas companies have bolstered their overseas operations and sold off North America assets, EnCana has steadily sold off its international assets to focus on unconventional gas and oil sands in Canada and the United States. It production, meanwhile, is expected to grow about 25% this year to 3.7 Bcf/d from 2.97 Bcf/d in 2004.

“I have seen Randy develop over a quarter century and for the past decade he has been a key part of my executive team,” Morgan said. “Randy’s ethical foundation, business judgment and exceptional industry knowledge give me great confidence in the future of EnCana under his leadership.”

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