Encana Corp. shareholder Letko, Brosseau & Associates Inc. said Nov. 19 it will vote against the oil and gas company's proposed exit from Canada to the U.S.
The investment firm, which owns a nearly 4% stake in Encana, said the move will cause significant losses for Canadian investors.
However, Encana said it was "disappointed" with Letko's move as a redomicile would not harm Canadian investors.
Last month, the company said it would shift base from Calgary to the U.S. 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 Nov. 19.
Encana, once among Canada's largest oil companies, has been shifting its focus to the U.S. 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%.
“After exploring all strategic and financial options available to Rosehill,” CEO David French said the company agreed to a restructuring plan with its major creditors, which includes filing for Chapter 11 bankruptcy, .
Exxon Mobil last quarter cut oil production by up to 400,000 bbl/d and capex by 30%, much of it in its shale business.
Court rulings over disputes with midstream operators are no longer easy to predict.