Canadian Natural Resources Ltd. has agreed to buy Cenovus Energy Inc.'s Pelican Lake heavy oil operations and other assets in northern Alberta for 975 million Canadian dollars ($787 million), the companies said Tuesday.
The deal will allow Canadian Natural Resources to expand existing heavy oil and polymer operations at Pelican Lake. Canadian Natural Resources plans to produce about 19,600 barrels of oil equivalents a day, or less than 3% of the company's rate of production last year.
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The companies expect the transaction to close by the end of the month.
Cenovus has embarked on a divestiture campaign after closing on a $13.3 billion deal with ConocoPhillips 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. The company said it wants to reach deals to sell between C$4 billion and C$5 billion of its conventional oil and natural-gas assets this year.
Cenovus said it will use the sale proceeds to retire the first tranche of a bridge loan it used to fund the ConocoPhillips asset purchase.
Cenovus shares are down 51% this year. The stock has lost 43% of its value since late March after the announcement of the ConocoPhillips deal.
Canadian Natural Resources shares are down 9% so far this year.
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(END) Dow Jones Newswires
September 05, 2017 08:00 ET (12:00 GMT)