Swedish-owned Lundin Group closing purchase of Cenovus assets in Alberta on Jan. 5

Alex Pourbaix, Cenovus president and CEO.

Cenovus sold assets as part of de-leveraging plan after spending $17.4 billion to acquire ConocoPhillips oil sands, Deep Basin properties

The sale of Cenovus Energy’s Suffield and Alderson oil and gas assets to International Petroleum Corp., a newly formed Canadian company owned by Sweden’s energy and mining conglomerate Lundin Group, is expected to close Friday, according to an IPC press release.

IPC owns a portfolio of assets located in Europe and South East Asia, and the company’s shares are listed on the Toronto Stock Exchange (TSX) and the NASDAQ First North Exchange (Stockholm) under the symbol “IPCO”.

IPC is now in the final stages of preparing for completion of the transaction, with all approvals received and completion expected to occur on Jan. 5, the company says.

In connection with the completion, IPC is finalizing acquisition financing with the increase of the company’s existing reserve-based lending facility of $100 million to $200 million, and with new acquisition credit facilities to be reduced $325 million to $310 million given the latest forecast cash flow generation.

In 2017, Cenovus sold its Weyburn carbon-dioxide enhanced oil recovery operation in Saskatchewan for $940 million to Whitecap Resources and the 19,600 BOE/d  Pelican Lake heavy oil operations (and other assets in northern Alberta) to Canadian Natural Resources Limited for $975 million.

Proceeds from the two sales were applied against the $3.6 billion debt taken on to help fund the Calgary-based company’s ConocoPhillips acquisition.

“Our priorities for 2018 are to reduce costs and deleverage our balance sheet while maintaining capital discipline. The sooner we can achieve our long-term debt ratio goal, the sooner we can move to balance returning cash to shareholders with disciplined investments in high-return growth,” said Alex Pourbaix, Cenovus president and CEO.

“We will build on the success of our divestiture program and work to exceed the goal, established in June of this year, of achieving $1 billion in cumulative capital, operating and general and administrative cost reductions with the aim of accelerating these reductions over the next two years instead of three.”

IPC also announced drilling of the first of two planned infill wells has commenced on the Bertam field, offshore Malaysia.  These two wells are targeting gross best estimate contingent resources of 2.3 MMboe. This two well campaign is expected to be completed in Feb. IPC, through its wholly-owned subsidiary IPC Malaysia BV, is the operator of the Bertam field with a 75 per cent working interest. Petronas Carigali Sdn Bhd holds the remaining 25 per cent.