Cenovus sells more assets

17 November 2017, Week 45, Issue 484

Cenovus Energy announced this week that it was selling its majority stake in the Weyburn carbon dioxide (CO2) enhanced oil recovery (EOR) assets in Saskatchewan to Whitecap Resources for C$940 million (US$737 million).


The transaction is the last on the list of four major asset sales that the firm has targeted in an effort to help it pay for the C$17.7 billion (US$13.9 billion) acquisition of the majority of ConocoPhillips’ Canadian operations earlier this year.

Cenovus previously struck deals to sell three separate assets in Alberta. It agreed to sell its Palliser assets to Torxen Energy and Schlumberger for C$1.3 billion (US$1.0 billion), its Suffield properties to International Petroleum Corp. (IPC) for C$512 million (US$401 million) and its Pelican Lake heavy oil operations to Canadian Natural Resources Ltd (CNRL) for C$975 million (US$764 million).

The Pelican Lake sale closed on September 29, while the Palliser and Suffield asset sales are anticipated to close later this year, Cenovus said in a statement this week. The Weyburn asset sale is also expected to close during this quarter.

In a separate statement, Whitecap said the purchase of Cenovus’s 62% interest in the Weyburn project would boost its overall production in 2018 by about 25% to about 74,000 boepd.

The Weyburn asset has been in operation since 1954, with EOR operations aimed at extending the life of the field starting in 2000. The asset currently produces around 11,500 boepd.

Cenovus’s new CEO, Alex Pourbaix, said the Weyburn sale would allow the company to retire the entire C$3.6 billion (US$2.8 billion) bridge facility associated with the ConocoPhillips purchase before the end of 2017.

Cenovus said it would identify other assets for sale this year to take the total raised to C$4-5 billion (US$3.1-3.9 billion). And indeed Pourbaix proceeded to announce on November 15 that it had put a package of some of its Deep Basin gas assets up for sale.

Pourbaix did not elaborate on the specific Deep Basin assets – which straddle British Columbia and Alberta – that are set to be sold beyond saying only they would be “non-core”, Reuters reported. He declined to say how much the company expected to fetch for them.


Edited by

Anna Kachkova


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