Encana Corp shareholder Letko, Brosseau & Associates Inc said on Tuesday it will vote against the oil and gas company’s proposed exit from Canada to the United States.
Source: nasdaq.com
The investment firm, which owns a nearly 4% stake in Encana, said the move will cause significant losses for Canadian investors.
Encana was not immediately available for a comment.
Last month, the company said it would shift base from Calgary to the United States and become Ovintiv Inc next year, the latest company to move away from Canada that is battling with pipeline capacity shortages.
Concerns that some Canadian funds would be unable to invest in the company once it moves to the United States had dragged its U.S.-listed shares down over 8% on the day of the announcement. Shares were down about 4% on Tuesday.
Encana, once among Canada’s largest oil companies, has been shifting its focus to the United States and had earlier this year bought Texas-based Newfield Exploration Co for $5.5 billion.
The Western-based oil industry has been forced to cut production this year as proposed pipeline expansions stalled much of Alberta’s oil from the U.S. refineries that buy it, hurting prices.
U.S. operations accounted for 60.5% of Encana’s total revenue in the third quarter, while Canada contributed 24.8%.
