Cenovus will double in size with its $13.3 billion purchase of Conoco assets – Alberta News

Cenovus will double in size with its $13.3 billion purchase of Conoco assets – Alberta News

Cenovus chief executive Brian Ferguson.

By Alex Nussbaum, Kevin Orland and Robert Tuttle

Cenovus Energy Inc. will double its reserves and production by buying Canadian holdings from ConocoPhillips for $17.7 billion, the latest sale of energy assets in that country by international companies stung by falling oil prices.

The deal includes Conoco’s 50 percent interest in a joint venture with Cenovus in Alberta’s oil sands, the Calgary-based company said in a statement Wednesday. Cenovus also gets most of Conoco’s Deep Basin conventional assets in Alberta and British Columbia. Combined, the holdings are forecast to produce 298,000 barrels of oil equivalent a day in 2017. 

The sale comes two weeks after Canadian Natural Resources Ltd. agreed to spend $12.7 billion to buy Alberta fields and processing centers from Royal Dutch Shell Plc and Marathon Oil Corp. It follows by a month Conoco’s announcement that its reserves fell to a 15-year low after removing oil-sands barrels that were uneconomic as crude prices sat below $50 a barrel.

“This is an easy fit,” said Michael Kay, an analyst at Bloomberg Intelligence in New York. “ConocoPhillips is focused elsewhere, and Cenovus has made it a priority to expand in the oil sands. It’s mostly a domestic industry now.”

The transaction is expected to close in the second quarter. It will be financed with $14.1 billion in cash and 208 million Cenovus shares, according to the statement. That will make Conoco into Cenovus’s largest shareholder, with about a 25 percent stake.

Full Control

The deal allows Cenovus “to take full control of our best-in-class oil…

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