From Financialpost · · 1m 30s
Cenovus Acquires Athabasca Oil for $5.7 Billion
Cenovus Energy agrees to buy Athabasca Oil for $5.7 billion in cash and stock.
In brief
Cenovus Energy agrees to buy Athabasca Oil for $5.7 billion in cash and stock. Cenovus Energy Inc. will acquire Athabasca Oil Corporation for $5.7 billion, adding 45 thousand barrels of oil equivalent per day to its oil sands operations. Originally reported by Financialpost.
Acquisition Announcement
Cenovus Energy Inc. announced a definitive arrangement agreement to acquire Athabasca Oil Corporation in a cash and stock transaction with an implied enterprise value of $5.7 billion.
Strategic Fit
The acquisition adds approximately 45 thousand barrels of oil equivalent per day to Cenovus’s oil sands operations, expanding its position in a core resource fairway.
Resource Quality
Athabasca’s assets include over 75 years of proved plus probable reserves life, providing significant growth potential and a pathway to accelerate thermal production to 115 thousand barrels per day by 2032.
SAGD Expertise
Cenovus’s proven SAGD operating model is expected to enhance reservoir performance, reduce steam-to-oil ratios, and accelerate resource recovery for Athabasca’s assets.
Synergies
Cenovus expects to realize approximately $85 million per year of corporate and commercial synergies, with the majority captured in the first full year following closing of the transaction.
Duvernay Platform
The deal consolidates ownership of Duvernay Energy Corporation, a high-quality oil-weighted position in the Kaybob Duvernay, with the option to accelerate development and grow production to a sustainable 20 MBOE/d.
CEO Statement
Jon McKenzie, Cenovus President & Chief Executive Officer, stated the transaction strengthens Cenovus’s position in one of the world’s premier oil-producing regions and is a natural extension of its oil sands strategy.
The bottom line
Cenovus Energy Inc. will acquire Athabasca Oil Corporation for $5.7 billion, adding 45 thousand barrels of oil equivalent per day to its oil sands operations.
