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