Cenovus sells Marten Hills royalty interest for more than $100 million
May 18 2021 - 4:25PM
Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) has sold its gross
overriding royalty (GORR) in the Marten Hills area of Alberta to
Topaz Energy Corp. for gross cash proceeds of $102 million. The
sale successfully closed today with a May 1, 2021 effective date.
Cenovus will use the sale proceeds to reduce net debt, consistent
with its commitment to use non-core asset sales to accelerate
deleveraging to achieve the company’s interim net debt target of
$10 billion.
“This transaction demonstrates our ability to strategically
identify opportunities in our portfolio to accelerate the
deleveraging process,” said Alex Pourbaix, Cenovus President &
Chief Executive Officer. “This is the first transaction of our
broader initiative and we will continue to explore all options to
create value for Cenovus shareholders and
position our balance sheet for increasing shareholder
returns.”
Cenovus retained the GORR as part of the sale of its Marten
Hills oil assets to Headwater Exploration Inc. in December 2020
which also included cash, common shares and purchase warrants of
Headwater. With the transaction announced today, Cenovus has
generated incremental value on the Marten Hills assets and
continues to participate in the upside development potential
through its 50 million shares and 15 million purchase warrants in
Headwater. Cenovus remains supportive of Headwater’s early success
at Marten Hills.
ADVISORY
Basis of PresentationAll financial figures and
information have been prepared in Canadian dollars (which includes
references to "dollars" and "$"), 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.
Note Regarding Forward-looking InformationThis
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
“achieve”, “commitment”, “continue”, “position” and “will”, or
similar expressions and includes suggestions of future outcomes,
including statements about: the use of sale proceeds to reduce debt
and achieve the interim net debt target of $10 billion; creating
value for shareholders; positioning our balance sheet to increase
shareholder returns; and Cenovus participating in the upside
development potential through its equity interest in Headwater.
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 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 March 31, 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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Instagram.
CENOVUS CONTACTS:Investor
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