By CHAT News Today

Cenovus to sell Suffield assets for $512 million

Sep 25, 2017 | 9:46 AM

SUFFIELD, AB — Cenovus Energy has announced it is selling its oil and gas operations in Suffield.

The Calgary-based company has reached an agreement to sell its crude oil and natural gas operations to International Petroleum Corporation for $512 million.

The purchases give International Petroleum, a subsidy of Europe-based Lundin Petroleum, its first oil operation in Canada.

The assets sold include Cenovus properties on CFB Suffield, and will give International Petroleum control of 800,000 net acres of shallow natural gas rights and 100,000 net acres of oil rights in southern Alberta. The sale is expected to close by the end of the year, subject to conditions.

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The two companies have also agreed to a deferred purchase price adjustment that gives Cenovus the chance to benefit from additional payments of up to $36 million.

Proceeds from the sale will help Cenovus pay down $3.6 billion in debt, following the purchase of ConocoPhillips’ oil sands assets earlier this year for $16.8 billion.

The sale is the second sale of a major Cenovus project this year. The company sold its Pelican Lake assets earlier this month to Canadian Natural Resources Ltd. for $975 million. It is currently looking to sell two more assets, including the Palliser block, located in southern Alberta near Drumheller, and its carbon dioxide enhanced oil recovery operation in Weyburn, Saskatchewan.