Cenovus sells Suffield conventional oil/gas assets for over $500 million dollars

Cenovus Suffield photo.

Swedish energy company International Petroleum Corporation has agreed to acquire 100 per cent ownership

Cenovus Energy Inc. has agreed to sell its Suffield, AB and Alderson, AB crude oil and natural gas operations in southern Alberta to International Petroleum Corporation for gross cash proceeds of $512 million, according to a press release.

Cenovus can also benefit from potential additional payments of up to $36 million, with a deferred purchase price adjustment.

The Suffield and Alderson oil and natural gas assets are held over a large, contiguous land position of 800,000 net acres of shallow natural gas rights and 100,000 net acres of oil rights in southern Alberta.

Cenovus remains focused on reaching its target of being below two times net debt to adjusted earnings before interest, taxes, depreciation and amortization.

“We’re right on target with the financial plan we put in place to deleverage our balance sheet following our recent transformational acquisition of assets in Western Canada,” said Brian Ferguson, President & Chief Executive Officer.

IPC has agreed to acquire 100 per cent operatorship (98.8 per cent working interest) in the oil and natural gas assets which are forecast to produce an average of approximately 6,900 bopd and approximately 102 million standard cubic feet of natural gas per day during 2017, for a total average of approximately 24,000 barrels of oil equivalent per day (boepd).

“We are very excited to enter into this transformational acquisition of high quality operated assets only five months after the launch of IPC. The Suffield and Alderson assets have been operated safely and efficiently by Cenovus and we are pleased to have reached this agreement to acquire these conventional producing assets as Cenovus focuses on its oil sands and Deep Basin assets,” said Mike Nicholson, IPC CEO.

The sale processes for Cenovus’s Palliser assets in southern Alberta and the Weyburn carbon-dioxide enhanced oil recovery operation in Saskatchewan are proceeding as expected. Cenovus anticipates reaching sale agreements for these two assets in the fourth quarter of 2017.

The Suffield and Alderson oil and natural gas assets are held over a large, contiguous land position of 800,000 net acres of shallow natural gas rights and 100,000 net acres of oil rights in southern Alberta.