CALGARY, Alberta – 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 network
Cenovus 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.
In 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.