The Largest Independent Producer

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McQueen had a theory that the Mississippian rocks that housed the big oil and gas reservoir at Turner Valley might yield some oil fields in south­eastern Saskatchewan, and in 1950 filed on 400,000 acres of permits. Four years later, Central Leduc and Del Rio discovered the Weyburn field, Saskatchewan's biggest oil field which is now expected to yield nearly half a billion barrels of oil.

This was the plum that Canadian Pacific Investment sought, the major asset among a spread of exploration and production properties throughout Western Canada that by then was Central-Del Rio. After buying 52 percent of Central-Del Rio's shares on the open market, Canadian Pacific Investments arranged a merger with CPOG to create PanCanadian Petroleum in 1971. By the time of the merger, Central-Del Rio had grown in 12 years from assets of $280,000 to $47 million ($230 million in 2004 dollars), with revenues of more than $9 million a year, earnings of more than $3.5 million, and no debt. It was one of the very few post-Leduc penny oil stocks that ever made a penny of profit, except for the promoters.

Bob Brown had just lost his fortune with his last, desperate, extravagant wildcat gamble on the North Slope of Alaska. Non-gambler Okah Jones at Consumers' Gas had just acquired control of Home Oil. Canadian Pacific was looking for a known leader to head its newly minted PanCanadian. Bob Campbell, Brown's top man at Home, was available. Under Campbell's management for a dozen years, until he moved up to head Canadian Pacific Investments, PanCanadian spread its wings and new. Each year it drilled more wells in Western Canada than any other outfit; it expanded its oper­ations from the West to the East Coast offshore, to the Gulf of Mexico, the North Sea, the Mediterranean, and grew its market price from $9 to $145 per share. After Campbell's reign, PanCanadian continued to grow during the next two decades under a succession of CEOs: Bart Rombough, :moth­er Home Oil expatriate; David O'Brien, before he stepped up as president and chief operating officer of Canadian Pacific Limited; and David Tuer.

From the cauldron of energy politics

Briefer, but even more spectacular, was the trajectory of the enterprise that would later join forces with PanCanadian to create EnCana Corporation. Alberta Energy Company was initially a creature of the Alberta government, cooked up in a boiling cauldron of energy politics.
AEC arrived, as we saw in chapter 16, in 1974 in the midst of global energy turmoil. Peter Lougheed's Conservatives had swept into power three years earlier with interventionist policies that contrasted sharply with the laissez faire, staunchly free-market approach that had marked most of the 36-year rule of the Social Credit government. Peter's pals were egged on by a bureaucracy in Edmonton that lamented the export and depletion of non-renewable resources, a damaged environment, and the "ever-increasing foreign control" of Canadian resources. The Arab oil embargo had triggered the explosion in energy prices that shook world economies and threatened the most "dramatic difference in the lives and fortunes of Canadians" since the onset of the Great Depression, in the words of federal Energy Minister Donald Macdonald. The governments of Canada, Ontario, and Alberta were desperate to revive the stalled second oil sands plant that had been planned by Syncrude, which they resuscitated with several hundred million dollars of taxpayers' money.

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