Cenovus Continues Shedding Assets to Pay Down Debt

By Cara Lombardo Features Dow Jones Newswires

Cenovus Energy Inc. (CVE.T, CVE) on Thursday said it agreed to sell its Palliser crude-oil and natural-gas assets in Alberta to Torxen Energy and Schlumberger Ltd. (SLB) for C$1.3 billion ($1 billion) as it continues to shed property to reduce debt.

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Cenovus said it would use the cash proceeds from the sale, which is expected to close in the fourth quarter, to pay down a bridge loan. Last month, the company closed a C$975 million sale and announced a C$512 million sale to International Petroleum Corp.

"Our strategy to optimize our portfolio by selling non-core assets and using the proceeds to pay down debt is firmly on track," Chief Executive Brian Ferguson said in prepared remarks. He said the Alberta-based company is on target to sell between C$4 billion and C$5 billion of its conventional oil and natural-gas assets this year.

Cenovus has embarked on a divestiture campaign after closing on a $13.3 billion deal with ConocoPhillips (COP)earlier this year to acquire full ownership of its oil-sands operations and a production platform in the Deep Basin in northwestern Alberta and British Columbia.

Cenovus also said it expects to reach an agreement to sell additional assets in Saskatchewan during the fourth quarter and said it is continuing to explore other possible sales.

Shares in the company are down 40% this year.

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Write to Cara Lombardo at cara.lombardo@wsj.com

(END) Dow Jones Newswires

October 19, 2017 07:09 ET (11:09 GMT)