Encana cutting jobs at Newfield HQ in The Woodlands after recent acquisition

Encana cutting jobs at Newfield HQ in The Woodlands after recent acquisition

Less than a week after closing a multibillion-dollar acquisition, Canada-based Encana Corp. notified the state of Texas it would be cutting jobs.

Encana acquired The Woodlands-based Newfield Exploration Co. in an all-stock deal that closed Feb. 13. The company then sent a Worker Adjustment and Training Notification Act letter to the Texas Workforce Commission on Feb. 18. 

At least 30 percent of the current workforce — or about 274 jobs — will be cut at 4 Waterway Square Place and 24 Waterway Square Place in The Woodlands, according to the WARN letter, which the TWC released March 1. Those are the locations of Newfield’s headquarters and operations facilities, respectively, according to the company’s website.

The cuts will occur gradually between mid-February and May 31, per the letter. Affected employees are not represented by a union and do not have bumping rights, meaning workers with more seniority cannot take jobs from those with less seniority.

Encana’s all-stock acquisition of Newfield was valued at approximately $5.5 billion when it was announced in November. At the time, Encana also planned to assume $2.2 billion of Newfield’s net debt. 

The combined company is expected to achieve $250 million in annual synergies. Half of that will come from general and administrative costs, while the other half will come from reducing costs by at least $1 million per well.

The combined company is expected to be North America’s second largest producer of unconventional resources and have an enterprise value of $19.6 billion, as of November. 

With large positions in the Permian Basin, the STACK/SCOOP region of the Anadarko Basin and the Montney Formation in Canada, the combined company’s pro-forma production was 577,000 barrels of oil equivalent per day in the third quarter of 2018. That includes liquids production of about 300,000 barrels per day, of which oil and condensate contributed about 210,000 barrels per day. The combined company will run operations out of Calgary, Denver and the Houston area in what Doug Suttles, president and CEO of Encana, calls a “headquarter-less model.”

Published: 04-03-2019