Cenovus agrees to sell oil assets to Whitecap

CALGARY Cenovus Energy Inc. (TSX:CVE) says it is selling its majority stake in a Saskatchewan enhanced-oil recovery project to Calgary-based Whitecap Resources Inc. (TSX:WCP) for $940 million.

The deal is the last on a list of four asset sales the major oilsands producer vowed to complete to help pay for its $17.7-billion acquisition of most of the Canadian assets of Houston-based ConocoPhillips earlier this year.

It has previously agreed to sell its Palliser assets in southeastern Alberta to Torxen Energy and Schlumberger for $1.3 billion, its Suffield operations in southern Alberta to International Petroleum Corporation for $512 million and its Pelican Lake heavy oil assets in northern Alberta for $975 million to Canadian Natural Resources (TSX:CNQ).

Incoming Cenovus CEO Alex Pourbaix says in a statement that the sale will allow the Calgary company to retire the entire $3.6-billion bridge facility associated with the ConocoPhillips purchase before yearend.

Cenovus has said it will identify other assets for sale this year to take the total raised to between $4 billion and $5 billion.

In a separate release, Whitecap says the purchase of Cenovus’s 62 per cent interest in the Weyburn, Sask., project will boost its overall production in 2018 by about 25 per cent to about 74,000 barrels of oil equivalent per day.

The Weyburn project has been in operation since 1954. Cenovus began injecting carbon dioxide into its oilproducing underground formations in 2000 to enhance oil production and extend the life of the field.