By CHAT News Today

Cenovus reaches deal to sell Palliser Block

Oct 19, 2017 | 2:59 PM

CALGARY, AB — Cenovus Energy Inc. has sold its Palliser crude oil and natural gas assets.

The deal, which was announced on Thursday, sees the company sell the assets to Torxen Energy and Schlumberger for $1.3 billion in cash proceeds. The assets are located between Suffield and Drumheller.

Torxen, which is based in Strathmore, will operate the site, while Schlumberger will be the owner.

The sale is the third sale of Cenovus core assets within the past month.

On September 29, the company sold its oil and gas assets near CFB Suffield to International Petroleum Corporation. Earlier in September, the company sold its Pelican Lake assets to Canadian Natural Resources Ltd. for $975 million.

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The proceeds from the sale will be used to help Cenovus pay down $3.6 billion in debt it took on following the purchase of ConocoPhillips’ oil sands assets earlier this year for $16.8 billion.

The sale is expected to close by the end of the year, and will Schlumberger and Torxen control of approximately 800,000 acres of oil and gas development rights. The asset, which features oil and gas wells, surface facilities and a pipeline network, has a current production of approximately 54,000 Barrels of oil equivalent per day. The two companies plan to drill another 1,600 oil wells starting next year.

Cenovus’ remaining major asset, a carbon dioxide enhanced oil recovery operation in Weyburn, is also up for sale. The company says it expects to reach a sale agreement for the asset in the fourth quarter of 2017. Cenovus is also evaluating other non-core assets for potential sale.