CALGARY, Alberta, Nov. 13, 2017 (GLOBE NEWSWIRE) — Cenovus Energy Inc. (TSX:CVE) (NYSE:CVE) has entered into an agreement to sell its majority interest in the Weyburn carbon-dioxide enhanced oil recovery operation in Saskatchewan for cash proceeds of $940 million. The sale is expected to close in the fourth quarter of 2017, subject to customary closing conditions.
The previously announced sale of Cenovus’s Pelican Lake assets closed on September 29, 2017 and the company still anticipates the previously announced sales of its Palliser and Suffield assets to close later this year.
“We’re pleased with the progress we’ve made in delivering on our divestiture plan to optimize our portfolio and deleverage the company’s balance sheet,” said Alex Pourbaix, Cenovus President & Chief Executive Officer. “Net proceeds from the Weyburn asset sale, combined with the other three divestitures announced earlier this fall, will position us to retire the entire $3.6 billion bridge facility associated with the ConocoPhillips asset purchase by the end of 2017.”
The company is focused on using cash flow from its operations and asset sale proceeds to achieve its target of being below two times net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
TD Securities Inc. acted as exclusive financial advisor to Cenovus on the Weyburn transaction.
|Gross proceeds ($ million) 1||940|
|Current production (BOE/d) 2||~11,500|
|Year-to-date operating margin ($ millions) 1,3||106|
|Price per flowing barrel ($ per BOE/d) 1||81,700|
1 All dollar amounts are in Canadian currency unless otherwise specified.
2 Current production above reflects Cenovus’s production net of third party burdens other than Crown royalties. Gross production includes production associated with a net profits interest and Gross Overriding Royalties held by third parties and is 14,800 BOE/d.
3 Year-to-date as of September 30, 2017. Operating margin is an additional subtotal. For more information, refer to the Non-GAAP Measures and Additional Subtotal section of the Advisory below.
Oil and Gas Information
Barrels of Oil Equivalent – Natural gas volumes have been converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil compared with natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is not an accurate reflection of value.