Cenovus Energy to dispose stake in Weyburn asset for $737.94m

Cenovus Energy has signed an agreement to divest its majority interest in the Weyburn carbon-dioxide enhanced oil recovery operation in Saskatchewan, Canada, to an undisclosed buyer for C$940m ($737.94m).

The development follows the company closing the sale of its Pelican Lake assets last month.

Meanwhile, the previously announced disposal of the company’s Palliser and Suffield assets is expected to complete later this year.

Cenovus Energy president and CEO Alex Pourbaix said: “We’re pleased with the progress we’ve made in delivering on our divestiture plan to optimise our portfolio and deleverage the company’s balance sheet.

“Net proceeds from the Weyburn asset sale, combined with the other three divestitures announced earlier this fall, will position us to retire the entire C$3.6bn ($2.82bn) bridge facility associated with the ConocoPhillips asset purchase by the end of 2017.”

The company noted that it will use cash flow from its operations and asset sale proceeds aimed at achieving its target of being below two times net debt to adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).

In February this year, the Weyburn project achieved the cumulative safe injection of around 30 million tonnes of CO₂ underground since the time the company first started using CO₂ flood technology.

Subject to customary closing conditions, the transaction involving the 62% interest of the Weyburn operation is scheduled to close in the fourth quarter of this year.