Cenovus strikes $4 billion deal for Athabasca to expand in Canada's oil sands
CVE•Cenovus Energy agreed to 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 terms
Athabasca shareholders will receive 0.264 Cenovus shares per share, with total consideration consisting of 65% to 75% cash and 25% to 35% stock; cash payments are capped at C$4.3 billion. The implied offer price of C$12 per share is about 13.4% above Athabasca's last closing price on Friday.
2. Production and assets
Cenovus said Athabasca's Leismer and Corner assets have more than 75 years of proved and probable reserve life and could help lift thermal oil production to 115,000 barrels per day by 2032. The transaction also gives Cenovus full ownership of Duvernay Energy, with potential to grow output in the Kaybob Duvernay area to 20,000 barrels of oil equivalent per day.
