Cenovus Energy May Keep Selling Assets After Hitting Debt Target
(Bloomberg) -- Canadian oil sands producer Cenovus Energy Inc. hasn’t yet finished selling assets to slash debt following its C$3.8 billion ($3 billion) acquisition of Husky Energy Inc. last year.
Just over a week after the company agreed to sell more than C$650 million of assets, Cenovus Chief Executive Alex Pourbaix said people shouldn’t be surprised if more such deals are in the works.
“I had always been using this sort of benchmark of many hundreds of millions of dollars and obviously we have passed that by a large measure,” he said in an investor call. “I would say that with respect to coring up our business, we are not done yet.”
Cenovus has been using divestitures to help reduce its net debt after buying Husky late last year, a deal that gave the company U.S. refineries and natural gas assets in Asia. It recently achieved its interim net debt target of C$10 billion to allow a previously announced share buyback program to begin. The company now aims to reduce its debt to C$8 billion next year and could eventually push that target to as low as C$6 billion.
Last week the Cenovus agreed to sell its Husky retail filling stations for C$420 million to Parkland Corp. and Federated Co-operatives Ltd. as well as its oil and gas assets in the Montney shale in Western Canada for C$238 million to an unidentified buyer.
Earlier this year, company also sold 192,000 gross acres in the Marten Hills Clearwater oil-producing region of central Alberta for C$102.0 million in cash. One group of assets the company isn’t looking to sell next year are its production facilities in the Asia Pacific region, Pourbaix said. That’s a change from May, when he said he the company would take a “hard look” at them.
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