Receive our newsletter – data, insights and analysis delivered to you
  1. Dashboards
  2. Deals
December 17, 2021

Cenovus Energy to divest Canadian asset for $625m

According to estimates, the Tucker oil sands project holds 1.27 billion barrels of original bitumen.

By Archana Rani

Cenovus Energy has signed an agreement to divest its Tucker thermal asset to an undisclosed firm for $625m (C$800m) in cash.

The Canadian firm plans to use the proceeds to further accelerate its net debt reduction plan, and improve its capacity to increase shareholders’ returns.

The Tucker oil sands project is estimated to contain 1.27 billion barrels of original bitumen. It is expected to recover approximately 350 million barrels over its 35 years of operational life.

In 2022, the Tucker project is expected to reach a daily average production of 18,000 barrels to 21,000 barrels.

The transaction is subject to customary closing conditions. It is likely to be closed in late January 2022.

Cenovus said it will realise nearly $1.56bn (C$2bn) in total proceeds from its assets sales this year, including this latest deal.

Content from our partners
Green investment: What gives Scotland multiple advantages
How the North of Tyne region is leveraging its legacy to define its future
Q&A with Chevron Lubricants’ Paul Sly, global industrial OEM specialist, and Nathan Knotts, global brand technical manager

Cenovus Energy president and CEO Alex Pourbaix said: “This is yet another example of Cenovus seizing opportunities to generate incremental value for shareholders.

“With Tucker and the other divestitures announced this year, we have delivered on our asset sales commitment for 2021, positioning the company well to focus on higher-return opportunities in the portfolio and continue increasing returns to shareholders.”

The Canadian firm said the Tucker is one of the four oil sands projects it operates in Alberta. The other three include Foster Creek, Christina Lake, and Sunrise.

In November, Cenovus agreed to divest its retail fuels network and the Wembley assets in its conventional business in separate deals, worth approximately C$660m ($515.6m) in total.

In January this year, Cenovus announced the completion of its merger with the Canadian company Husky.

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU