Every time I check to see what EnCana shares are trading at, I ask myself, Is the price an accurate reflection of the underlying value and future potential of our company? Like many CEOs, I’m prone to believing there’s a gap between our current stock price and our real value. But I don’t spend much time concerned about our day-to-day stock price, or fret over short-term fluctuations. Rather, my prime function at the company is to increase the long-term intrinsic value of EnCana shares. My leadership team and I work closely with our IR team to provide the information investors need. When you boil it down, we have two accountabilities to shareholders: to act with integrity in delivering top-flight performance; and to explain the company’s outlook as clearly as possible.
Then the question becomes, How do we tell our story? What guides how we work? Our investor relations’ work, like everything else we do at EnCana, is founded on the guiding principles in EnCana’s corporate constitution, which was adopted in September 2003 (accessible at encana.com). This foundation document sets out the principles and values that guide how we pursue all areas of our business, whether it’s drilling natural gas wells or telling our investment story. It comprises the following four main principles, each one playing a guiding role in how we deliver our results and explain the company’s strategy and outlook.
Strong character is reflected by our commitment to communicate clearly and consistently how we pursue long-term growth and returns. We commit to providing clear and candid information that illustrates a highly disciplined, transparent approach.
Ethical behaviour means we function on the basis of trust, integrity and respect. Our success is measured by both our bottom line and our behavior. While we spend many hours delivering our story we also take time to listen to our audiences, soliciting feedback from the investment community to verify we are delivering the information that’s required.
High performance – our IR group works beyond basic compliance with laws and regulation. We explain our financial information and benchmark our performance against our targets and our peers. This year, as our US-based shareholdings grew to half of our outstanding shares, we expanded our Investor Day beyond Calgary to a one-day conference in New York. Beginning with our 2003 year-end results and annual report, we will report our financial and operating results in US dollars using industry protocols on reserves and production that are consistent with our US peer group.
Great expectations of ourselves. Skeptics sometimes question our forecasts – for example, we are often asked how the largest independent North American oil and gas producer can deliver 10 percent growth over the coming years. The short answer is we have spent decades building a long-life, low natural decline asset base with huge growth potential.
The only way to prove this forecast is through consistent, long-term performance and a proven track record. In the meantime our IR team works hard to detail the characteristics of our prospects and opportunities, and explain why our investment and divestment decisions make sense.
We strive to live by our constitutional principles. And as our employees deliver and our investment audiences understand our work, I’m confident that our stock price will reflect the intrinsic value and outlook of our company. I also believe we will earn shareholders’ confidence that we are a principled, disciplined company positioned to create continuous long-term value.
Sincerely,
Gwyn Morgan
President and CEO of EnCana
