Cenovus Energy has reached agreements to sell 337 gas stations in its Husky retail fuels network to Parkland Corp. and Federated Co-operatives Limited for total cash proceeds of US$327 million.
Cenovus will also sell its Wembley assets in its conventional business, primarily Montney assets in Wembley for cash proceeds of approximately US$186 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. Th transaction is expected to close this month, subject to customary closing conditions.
Both transactions total a combined cash proceeds of nearly US$514 million, allowing the company to further focus the portfolio, accelerate deleveraging and support increasing shareholder returns.
Cenovus is retaining its commercial fuels business, which includes approximately 170 cardlock, bulk plant and travel center locations. The transaction is expected to close in mid-2022, and is subject to approval under Canada’s Competition Act and other customary closing conditions.
“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 Cenovus President and CEO Alex Pourbaix. “With these latest transactions, we now expect to realize more than (US$860,000) of total proceeds from sales announced in 2021.”
In November Cenovus announced the substantial achievement of its interim net debt target of US$7.80 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 US$6.23 billion and enhance the company’s capacity to increase shareholder returns.
All final cash proceeds will be subject to customary closing adjustments.
Cenovus Energy 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 U.S.