Cenovus announces asset sales of nearly $660 million
November 30 2021 - 5:00PM
Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) has reached agreements
to sell its Husky retail fuels network and the Wembley assets in
its Conventional business for combined total cash proceeds of
nearly $660 million, allowing the company to further focus the
portfolio, accelerate deleveraging and support increasing
shareholder returns.
“This is another demonstration of Cenovus delivering on
opportunities to continue to optimize our portfolio and unlock
value from assets that will not attract significant investment in
our business,” said Alex Pourbaix, Cenovus’s President & Chief
Executive Officer. “With these latest transactions, we now expect
to realize more than $1.1 billion of total proceeds from sales
announced in 2021.”
In November Cenovus announced the substantial achievement of its
interim net debt target of $10 billion, the doubling of its
quarterly dividend as of the fourth quarter of 2021 and the
establishment of a normal course issuer bid program for the
repurchase of up to 146.5 million of the company’s common shares.
Proceeds from these latest transactions will advance net debt
repayment towards the company’s longer-term target of $8 billion
and enhance the company’s capacity to increase shareholder
returns.
All final cash proceeds will be subject to customary closing
adjustments.Husky retail fuels networkCenovus has
reached agreements to sell 337 gas stations in its Husky retail
fuels network to Parkland Corporation and Federated Co-operatives
Limited for total cash proceeds of $420 million. Cenovus is
retaining its commercial fuels business, which includes
approximately 170 cardlock, bulk plant and travel centre locations.
The transaction is expected to close in mid-2022, and is subject to
approval under the Competition Act (Canada) and other customary
closing conditions.
Conventional segmentIn the Conventional
segment, the company has entered into an agreement to sell its
primarily Montney assets in Wembley for cash proceeds of
approximately $238 million. Total production from this asset
averaged approximately 3,200 barrels of oil equivalent per day in
2021, with about 38% oil and natural gas liquids. This transaction
is expected to close in December 2021, subject to customary closing
conditions.
AdvisoryBasis of Presentation
All financial figures and information have been prepared in
Canadian dollars (which includes references to "dollars" and "$"),
except where another currency has been indicated, and in accordance
with International Financial Reporting Standards ("IFRS" or "GAAP")
as issued by the International Accounting Standards Board.
Production volumes are presented on a before royalties basis.
Forward-looking Information This news release
contains certain forward-looking statements and forward-looking
information (collectively referred to as “forward-looking
information”) within the meaning of applicable securities
legislation, including the United States Private Securities
Litigation Reform Act of 1995, about our current expectations,
estimates and projections about the future, based on certain
assumptions made by us in light of our experience and perception of
historical trends. Although Cenovus believes that the expectations
represented by such forward-looking information are reasonable,
there can be no assurance that such expectations will prove to be
correct. Readers are cautioned not to place undue reliance on
forward-looking information as actual results may differ materially
from those expressed or implied. Cenovus undertakes no obligation
to update or revise any forward-looking information except as
required by law.
This forward-looking information is identified by words such as
“advance”, “enhance”, “expect”, “focus” and “will” or similar
expressions and includes suggestions of future outcomes, including
statements about: accelerating deleveraging and increasing
shareholder returns; repurchasing Cenovus common shares; realizing
proceeds from sales; the use of sale proceeds to reduce debt and
achieve the interim net debt target of $10 billion and longer term
net debt target of $8 billion; and closing the transactions.
Developing forward-looking information involves reliance on a
number of assumptions and consideration of certain risks and
uncertainties, some of which are specific to Cenovus and others
that apply to the industry generally.
Additional information about risks, assumptions, uncertainties
and other factors that could cause Cenovus's actual results to
differ materially from those expressed or implied by its
forward-looking statements is contained under “Risk Management and
Risk Factors” in Cenovus's Annual Management’s Discussion and
Analysis (MD&A) or Form 40-F for the year ended December 31,
2020 and in the updates in the “Risk Management and Risk Factors”
section of Cenovus’s MD&A for the period ended September 30,
2021.
Cenovus Energy Inc.
Cenovus Energy Inc. is an integrated energy company with oil and
natural gas production operations in Canada and the Asia Pacific
region, and upgrading, refining and marketing operations in Canada
and the United States. The company is focused on managing its
assets in a safe, innovative and cost-efficient manner, integrating
environmental, social and governance considerations into its
business plans. Cenovus common shares and warrants are listed on
the Toronto and New York stock exchanges, and the company’s
preferred shares are listed on the Toronto Stock Exchange. For more
information, visit cenovus.com.
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