Oddly enough, Gwyn Morgan and the oilpatch may never have been formally introduced if it hadn’t been for Morgan’s humble roots.

If he had grown up with a silver spoon in his mouth, he may not have surfaced in the oilpatch en route to becoming the most influential player in Canada’s energy industry with 35 years of oil and gas experience under his belt.

Morgan, who hails from a modest upbringing on a farm at Carstairs, credits financial hardship for helping him beat a path into the oil and gas business. While studying mechanical engineering at the University of Alberta in the mid-1960s, Morgan aspired to branch into medicine and a career in biomechanics – but then he had to go to work to pay off his debts.

Once the ambitious Morgan settled into the oilpatch, there was no looking back as he went on to become the architect of a gusher of a growth story named Alberta Energy Co.

Mike Sturk photo, Business Edge
Gwyn Morgan, centre, says that establishing both personal and corporate ethical principles is important for success.

Morgan, the one-time financially strapped student, is now the $4-million-a-year chief executive (based on his 2003 compensation) of EnCana, North America’s largest independent oil and gas producer and the product of Alberta Energy’s 2001 mega- merger with PanCanadian Energy.

Today, when Gwyn Morgan talks, business people listen.

1. What did you dream about as a youngster milking cows on your family’s farm?

“In the early stages of my life, I thought I would stay and take over the family farm, as I was the only boy. I guess when I was milking cows in those days, I was contemplating either becoming an engineer or taking agriculture in university. Then I became an engineer.”

2. What’s the best piece of advice your parents gave you?

“The best piece of advice came from my father. My father had great capabilities. He was the top of his class and so on. But he couldn’t go by Grade 12 because he was financially unable. So his dream was for me to go well past him in terms of education and realize my potential. He always had a dream that I would do better than he did, although he did very well with what he had to work with. So the best advice was to get your education and go out and do your best.”

3. At what point did you determine that your future would be in the oilpatch?

“I guess it was about my fourth year in engineering (at the U of A). My plan at the time was to complete my engineering degree and then take a medical degree and then go into biomechanics. In other words, I would have been one of these guys working on heart/lung machines or MRIs (magnetic resonance imaging machines) and stuff like that. But the reality of it was that I came out of university so far in debt that I had to go to work. So I went to work in the oilpatch.”

4. What do you remember about your start in the oilpatch?

“My first job was working for the Oil and Gas Conservation Board, which is now the Alberta Energy and Utilities Board. I was a petroleum engineer, involved in inspecting drilling rigs in the north. It was one of the coldest winters on record: -60°C for two months and I remember almost everybody and everything was frozen.”

5. Who were your mentors early in your career?

“Nick Lashuk (a prominent oilman) brought me into the corporate setting. Beyond that, I worked for Dave Mitchell (his predecessor as CEO of Alberta Energy Co.) and I had great support and great advice from Stan Milner, who is one of the great oilmen in Alberta.”

6. What is the most important trait of a successful business leader?

“Well, for me it’s discipline – personal discipline and corporate discipline. I think that you need to establish a set of principles around which you’re going to pursue your business. That includes both strategic principles and ethical principles, and you need to have a very strong discipline in sticking with those principles.”

7. How do you think your leadership style has changed over the years?

“In my early days, I was extremely aggressive and maybe a bit insufferable at times. And it has evolved, I hope, into a stronger but more participatory and open approach. I have a great belief in people. If you can create a vision that you can share with people and if you can align what you want to accomplish with incentives and rewards, you can accomplish great things.”

8. Your biggest deal, of course, was the merger of Alberta Energy with PanCanadian Energy in 2002. Did you initially harbour any second thoughts about that merger?

“It wasn’t an easy decision. From the time I first called David O’Brien (chairman of PanCanadian) about the idea, there was about a month before we could get together. During that period, I must say I had lots of different thoughts. For example, I was running a company which had been building for a long time, things were going very well and we had a great future. So the idea of doubling in size and merging it all was a great debate for me personally, and for my team. There were both pluses and minuses. At the end of the day, we felt that the opportunity to build a truly strong Canadian company that could compete with the very best anywhere was an opportunity you don’t get very often.”

9. What’s your long-term strategy in growing EnCana?

“First and foremost, EnCana is a North American natural gas producer. We believe we will achieve the status as the top natural gas producer in North America. By the time we get the Tom Brown (company acquisition) done, we’ll be No. 2 behind BP Amoco. That (natural gas) will be the cornerstone of everything we do. We have a huge resource base in Canada and the U.S. and we have the ability to grow that reserve and production base for years and years to come. Everything else will be supplemental to that big core. We’re also a major player and a growing player in the oilsands in Alberta where we drill for the oil and stimulate the production through things like steam. We’ll also have exploration around the world that will add upside.”

10. While many of your competitors are focusing growth beyond North America, why isn’t that a major focus of EnCana?

“We already are in the U.K. and Ecuador. The answer to your question is that we will be dominantly North American for years and years. I think it’s a question of what your alternatives are. We have built a company, virtually starting decades ago, with AEC (Alberta Energy). “PanCanadian’s asset base had a lot of similar characteristics. We’ve built around these very long-life resource play assets on which you can build a business for years and years, literally decades. Because our land position on those kinds of assets is the largest in North America and because there is so much untapped potential in those resources, we have the ability to grow in North America when others can’t.

“You only have to look at North American gas production to see that. We’re growing while generally the production is falling in both countries. So for us, this is a profitable approach and a low-risk approach. If we didn’t have that land position, then we’d have to make other choices internationally.”

11. What are your thoughts about $40 US oil and whether it can be sustained?

“I had said that $30 oil was kind of normal because with the U.S. dollar having dropped by 20 per cent, $30 oil is really $25 oil to most people in the world. So that kind of normalizes $30 oil. But I can’t see normalizing $40 (oil). So the only thing I’m uncertain about right now – as everybody is – is that we’ve never had a time, at least in the past three decades, when there has been so little extra capacity (of oil) in the world. It (extra capacity) is something like three per cent right now. There’s also that risk premium built in and people know that an event (of terrorism) could push things up further. My general sense is that we’re moving to a higher level in the world for energy pricing – gas pricing, oil pricing and, ultimately, probably electricity prices. So this is uncharted territory and we’re all going to have to find ways of using less.”

12. What have you learned about getting the most out of your employees?

“First of all, you want to hire the best people that you can get. You want people with a can-do attitude who have a lot of potential to grow and build and achieve. You want team players. If you can get those people onboard, you want to align the goals and objectives of the corporation with their own personal goals. I think that today, as much as at any time, people want to feel proud of the company they work for. They want to feel proud of what the company is doing, what it represents and how it behaves. They want to be treated with respect and they want to be recognized for what they do. We try to do all those things, but you’re never going to get it perfect.”

13. You like to refer to your employees as EnCanans. What exactly is an EnCanan?

“I like to think they have a commonality in how they behave and in the principles on how they will act so that we don’t have to have a great long rule book.”

14. How often do you find yourself checking the stock price?

“I think a couple of times a day. Every time I look at my computer screen, there’s a little icon at the bottom. So you can’t go to your e-mail without seeing it. It’s just sort of there all the time. I think the broader thing is that if you’re going to build a company on a sustainable basis and it’s going to be around for a long time, you have to have a long-term view. You can’t worry about day-to-day fluctuations in the stock price, or even the oil price. It’s not a sprint. It’s a marathon. I think one of the things that distinguishes successful CEOs from short-term CEOs is the ability to constantly make decisions that will be beneficial to the company’s long-term vision. It’s very easy to take a company and make short-term decisions and get a great flash in the stock. But it’s much harder to continually make decisions that are sound and add value all the time, every day, year after year.”

15. What rankles you most about the ongoing corporate scandals and the way they’ve eroded investor confidence?

“It’s probably the same thing that rankles people in the political arena or other areas. But there are a lot of people around who really work hard and are highly ethical. They sometimes get tarred with the same brush. So what really rankles me is how a few people who don’t have what I call a rudder – my metaphor for keeping yourself on the right track with a proper value system – can really cause skepticism and negativity, not only among the general public but also investors.

“That’s a very sad thing and it’s obviously disturbing.”

16. How long do you want to remain CEO of EnCana?

“That’s always a question that I can’t answer. I think one of the things that determines a person’s tenure is your zest for what you’re doing, and I still have a lot of that. The other is the time it takes to make sure you have the kinds of successes that you need. A friend of mine once said to me, ‘It’s not what you build, it’s what you leave.’ There’s a time to stay and a time to go, and you have to make sure you balance that properly. So obviously I’m having quite a bit of fun, and at the same time I’m in the process of developing a very strong succession.”

17. With the time it takes to run EnCana and all your other engagements in the energy industry, have you been able to balance your business and personal life?

“I have, yes. It’s crucial to me. I do a lot of travelling. Most times, my soulmate (Pat Trottier) comes with me so we’re not apart from each other all of the time. I’m very much into the outdoors and fitness and I’ve been able to continue that.”

18. You take the day off tomorrow. How do you spend the day?

“Pat and I would probably jump on our bikes and cycle around the bike- path system for maybe 70 kilometres. We might go for a hike. But it would always be something outdoors.”

19. What’s your proudest achievement from your time in the energy industry?

“I’m proudest of the fact that we have built the strongest Canadian- headquartered energy company and the largest company ever to be headquartered in Western Canada. We’ve been able to have a really positive impact on the communities where we operate. I really believe we have quality people who are good citizens, and that those values are reflected back through their communities. One of the things I believe in strongly is that there is nothing more beneficial to a country or a community or a city than a highly successful corporation, because there are so many spinoffs that are positive for everyone. To have been a part of that is gratifying.”

20. What’s your most important goal beyond business?

“I think my most important goal is to contribute in some ways to public policy development of this country that makes it a better place to be.”

IN PROFILE: GWYN MORGAN
* Title: President/CEO, EnCana Corp.
* Born/raised/age: Didsbury; Carstairs; 58.
* Education: University of Alberta, bachelor of science, mechanical engineering; Cornell University (New York), executive business program.
* Career: Prior to becoming CEO of EnCana when the company was formed in 2002, Morgan was the president and CEO of Alberta Energy Co. (the entity that merged with PanCanadian to form EnCana). He has spent most of his 35 years in the oilpatch with Alberta Energy, having joined that company from its startup phase in 1975. Prior to that, he was a petroleum engineer with Alberta Energy Resources/Norlands Petroleums. He began his career as manager of operations and engineering with Consolidated Natural Gas in 1969.
* Moonlighting: Morgan is a director for HSBC Bank North, Lafarge North America, the Institute of the Americas and the Canadian Council of Chief Executives. He is also a governor of the Council for Canadian Unity and a trustee of the Fraser Institute.
* Accolades: Morgan is the recipient of the 2002 Ivey Business Leader Award and the Strategic Leadership Forum President’s Award, as well as an inductee to the Alberta Business Hall of Fame. He is an honourary colonel (retired) of 410 Tactical Fighter Squadron, Canadian Air Force.
* Passions: Cycling, hiking.

THE COMPANY: ENCANA CORP.
* Brass: Gwyn Morgan, CEO/president; David O’Brien, chairman; Randy Eresman, executive vice-president/chief operating officer; John Watson, executive VP, chief financial officer.
* Profile: Formed in the 2002 merger between Alberta Energy Co. and PanCanadian Energy, EnCana is North America’s largest independent oil and gas producer with about 90 per cent of its production and reserves onshore North America.The company is also the largest private-sector oil producer in Ecuador and operator of a major discovery in the United Kingdom.
* Market Cap: $24.6 billion US
* Recent Stock Price (ECA-TSX): $54.73 (52-week range, $44.60-$59.73).
* Website: www.encana.com
* Headquarters: 1800, 855 2nd St. S.W., PO Box 2850, Calgary, Alta.,T2P 2S5.
* Phone/Fax: 403-645-2000/645-3400.