Canada's Cenovus strikes $4 billion Athabasca deal to expand oil sands assets
CVE•Cenovus Energy will buy Athabasca Oil in a C$5.7 billion ($4 billion) cash-and-stock deal, adding about 45,000 barrels of oil equivalent per day to production. The transaction is expected to close in December.
1. Deal expands production
Cenovus said the acquisition will add about 45,000 barrels of oil equivalent per day and more long-life oil sands assets near its existing operations. Athabasca shareholders will receive 0.264 Cenovus shares per share held, valuing the deal at about C$5.76 billion.
2. Production growth plans
Cenovus said Athabasca’s Leismer and Corner assets have more than 75 years of proved and probable reserve life and could help lift its thermal oil production to 115,000 barrels per day by 2032. Executives said Cenovus sees an opportunity to raise Leismer production to more than 60,000 barrels per day through de-bottlenecking and a facility expansion.
3. Additional assets
The transaction will also give Cenovus full ownership of Duvernay Energy, where it sees potential to grow output to 20,000 barrels of oil equivalent per day. Cenovus CFO Kam Sandhar said the company returned C$1.9 billion to shareholders in the third quarter.
