Comprehensive M&A data with integrated detailed company information

Cenovus reclaims CAD 940mn from Weyburn deal
Posted on Tuesday, 14 November 2017 13:46
Cenovus is close to completing its series of non-core conventional asset divestments initiated in relation to its multi-billion-dollar acquisition of oil sands and deep basin assets in Western Canada from ConocoPhillips in May.

The Calgary-based, Encana spin-off announced yesterday it will sell its majority interest in the Weyburn carbon dioxide oil recovery operation in Saskatchewan for CAD 940.00 million (USD 739.57 million )to deleverage its balance sheet.

Whitecap Resources is the lucky buyer of a 62.1 per cent operated working interest in the Weyburn unit, billed as one of the largest capture and storage projects in the world.

The deal also includes the acquisition of 200 barrels of oil per day of production from minor assets in the southeast of the province.

Whitecap is funding the acquisition through a CAD 92.50 million non-brokered private placement and a concurrent CAD 332.50 million bought deal equity financing, as well as credit facilities.

The divestment is the last of four main assets put on the block in the first half of 2017 in order to retire the entire CAD 3.6 billion bridge facility associated with the CAD 17.70 billion deal with ConocoPhillips.

Cenovus has already handed over its Pelican Lake heavy oil operations, as well as other miscellaneous assets in northern Alberta, for CAD 975.00 million.

The group expects to close the previously announced disposals of its Palliser and Suffield activities for CAD 1.30 billion and CAD 548.00 million, respectively, later this year.

Altogether, the four deals should total roughly to USD 3.79 billion, though Cenovus said in its third quarter report it continues to target CAD 4.00 billion to CAD 5.00 billion of cumulative announced sale agreements in 2017.

It wants to reach its target of being below 2.0x net debt to adjusted earnings before interest, taxes, depreciation and amortisation.

© Zephus Ltd