EnCana splitting up!

[truth14]

http://www.encana.ca/investors/newsr...461445964.html

Huge news!

[JD]

Well that's a good idea, and it will definitely simplify our business dealings with EnCana, but could they pick a more awkward name for the oil company???

IOCo??? WTF? How do you pronounce that?

[edn88]

Originally Posted by JD

Well that's a good idea, and it will definitely simplify our business dealings with EnCana, but could they pick a more awkward name for the oil company???

IOCo??? WTF? How do you pronounce that?

IOCo is just short hand for Integrated Oil company - I am sure that there will be a different name later.

[Bill Bumface]

*sigh of relief* I think getting smaller is better news than getting bigger. Unless this just makes it easier for one of the evil companies to buy up the newly formed smaller pieces...

[Flames in 07]

That is huge news. Makes sense to streamline focus and talents better I suppose

[llama64]

Originally Posted by hulkrogan

*sigh of relief* I think getting smaller is better news than getting bigger. Unless this just makes it easier for one of the evil companies to buy up the newly formed smaller pieces...

There are "good" oil companies?

[Agamemnon]

Originally Posted by llama64

There are "good" oil companies?

Oil companies generally work by the rules set out by the government, and sell oil for the price the world market dictates. If there's evil in the oil industry it certainly isn't because of the oil companies... it's horrendous government oversight and regulations combined with unrestrained growth in resource/fuel use. The whole business of over-exploitation of natural resources is what's evil, oil companies are just a vehicle.

[Flames in 07]

Originally Posted by Agamemnon

Oil companies generally work by the rules set out by the government, and sell oil for the price the world market dictates. If there's evil in the oil industry it certainly isn't because of the oil companies... it's horrendous government oversight and regulations combined with unrestrained growth in resource/fuel use. The whole business of over-exploitation of natural resources is what's evil, oil companies are just a vehicle.

Agree with your post, but to clarify the bolded part is the consumers fault. I know it's much easier to just blame faceless companies, but all they are doing is serving a demand by the population.

Someone who makes a decision to have a bigger house and moves the burbs is as responsible for the high prices of crude products as anyone is.

[DFO]

They spin it as maximizing the value of the varied assets EnCana holds (NG resource plays vs. heavy oil).

http://www.theglobeandmail.com/servl...ry/energy/home

[Agamemnon]

Originally Posted by Flames in 07

Agree with your post, but to clarify the bolded part is the consumers fault. I know it's much easier to just blame faceless companies, but all they are doing is serving a demand by the population.

Someone who makes a decision to have a bigger house and moves the burbs is as responsible for the high prices of crude products as anyone is.

Definitely, though it might not be that simple. It's easy to blame the consumer for having a house in the 'burbs and leaving a large footprint, but at the same time, City planning has a lot to do with it. If you're out looking for a family house you have 2,000 suburban options and like 100 practical alternatives. I know that each individual has to change their lifestyles, but I also think it's impractical to expect the general population to magically change their consumption habits.

Government regulation has to smarten up to provide sustainable long-term options for home-buyers/general consumers. Like the LED lightbulb change... if it were left to us I'm sure half of us would just use the cheaper incandescents, but the gov steps in and makes the change happen quicker through regulation (no idea on the controversial aspects of LED, just an example).

I think government regulation is probably the better vehicle for prompting sweeping changes in consumption habits, but that's my opinion.

[Flames in 07]

Originally Posted by Agamemnon

Definitely, though it might not be that simple. It's easy to blame the consumer for having a house in the 'burbs and leaving a large footprint, but at the same time, City planning has a lot to do with it. If you're out looking for a family house you have 2,000 suburban options and like 100 practical alternatives. I know that each individual has to change their lifestyles, but I also think it's impractical to expect the general population to magically change their consumption habits. Government regulation has to smarten up to provide sustainable long-term options for home-buyers/general consumers. Like the LED lightbulb change... if it were left to us I'm sure half of us would just use the cheaper incandescents, but the gov steps in and makes the change happen quicker through regulation (no idea on the controversial aspects of LED, just an example). I think government regulation is probably the better vehicle for prompting sweeping changes in consumption habits, but that's my opinion.

Correct me if I'm wrong, but at least indirectly, city planning is a function of the will of the residents.

And no the general population can't magically change their consumption but we all knew high commodity prices were coming for about 5 years, people could have made adjustments, but Calgary inparticular bought bigger cars and moved to cranston in this time.

Anyway I for one welcome our $126US/bbl overloards. It will shape behavior in ways that are better for society.

[DFO]

Originally Posted by Flames in 07

Correct me if I'm wrong, but at least indirectly, city planning is a function of the will of the residents.

And no the general population can't magically change their consumption but we all knew high commodity prices were coming for about 5 years, people could have made adjustments, but Calgary inparticular bought bigger cars and moved to cranston in this time.

Anyway I for one welcome our $126US/bbl overloards. It will shape behavior in ways that are better for society.

I agree that alot of it lies with the residents/consumers. In my case I bought a place within walking distance of work (downtown) to avoid sitting in the car 2hrs a day.

[Agamemnon]

Originally Posted by DFO

I agree that alot of it lies with the residents/consumers. In my case I bought a place within walking distance of work (downtown) to avoid sitting in the car 2hrs a day.

Well... given that right now there are 100,000's of suburban residences in Calgary, is it realistic to just tell everyone 'buy smaller, live closer to downtown'? Fantastic that you're able to do that, but a lot of people can't afford it. The damage is done, the unsustainable communities are already built. You can't blame individual home-buyers for the makeup of Calgary's established housing over the past 30 years. They didn't create the housing market, it's city regulations and permits that allowed the monstrosities to be built.

[onetwo_threefour]

And people mock on political boards when I suggest that unregulated free markets fail to serve the best interests of society.

[llama64]

Originally Posted by Agamemnon

Oil companies generally work by the rules set out by the government, and sell oil for the price the world market dictates. If there's evil in the oil industry it certainly isn't because of the oil companies... it's horrendous government oversight and regulations combined with unrestrained growth in resource/fuel use. The whole business of over-exploitation of natural resources is what's evil, oil companies are just a vehicle.

Heh, that's a bit deeper then what I was pointing out. I just was drawing attention that calling a company "evil" is kinda silly.

Interesting to see people figuring that the reasons around this split are "spin". Seems to me that Encana is responding to concerns from investors to properly deal with the diverse focuses of their entire business operation.

[I-Hate-Hulse]

In the face of increasingly nationalized oil companies, I can't help but think it's a matter of time before one of the halves of Encana becomes foreign owned.

[Azure]

Originally Posted by onetwo_threefour

And people mock on political boards when I suggest that unregulated free markets fail to serve the best interests of society.

If the government would do its job 'properly'.....oil/gas prices wouldn't be through the roof.

So no, don't give me that shtick about unregulated free markets failing to serve the best interests of society.

[Clarkey]

What is the implication of this? Why couldn't the organization split into different org units while still staying under the same banner company? Does this mean that one of the arms is likely to be bought out down the road? What about The Bow, how will they split out the building?

I hope this isn't setting the stage for some grubby UAE takeover.

[Bill Bumface]

Originally Posted by llama64

There are "good" oil companies?

To work for, there sure as hell are. EnCana is (was?) one of them. Everything I hear about working at Imperial makes me want to jump out of a tall building on behalf of those people. Getting in trouble for emailing your friends to go to lunch? No internet access? Welcome to Imperial.

[IHATEOILERS]

Originally Posted by Clarkey

What is the implication of this? Why couldn't the organization split into different org units while still staying under the same banner company? .

A big reason is for market valuation purposes. Heavy oil and natural gas have different risk / reward profiles, and appeal to different investor appetites. By giving investors the discretion to invest in one division but not the other, you attract more aggregate demand. More demand = a higher combined price, which is in the best interest of the shareholders (and the company, because it gives them a cost of capital advantage)