Cenovus Sells Husky Fuel Stations, Shale Assets to Cut Debt
(Bloomberg) -- Cenovus Energy Inc. is selling fuel stations and some oil and gas production areas in a bid to reduce debt after buying rival Husky Energy last year.
The oil sands producer agreed to sell all of its 337 Husky retail filling stations to Parkland Corp. and Federated Co-operatives Ltd. for C$420 million ($329 million), as well as oil and gas assets in the Monteney shale in Western Canada for C$238 million to a buyer the company didn’t identify, according to a statement Tuesday.
The deals raise the company’s assets sales this year to C$1.1 billion. Cenovus will apply the proceeds toward accelerating its goal of achieving a net debt of C$8 billion, which it previously aimed to achieve by the middle of next year.
Chief Executive Officer Alex Pourbaix said in an interview last month that that timeline could be accelerated with divestitures.
After achieving the target target, Cenovus plans to focus on reinvesting in its business and boosting its dividend. The company also plans to initiate a buyback of 150 million common shares in 2022 after achieving a net debt of C$10 billion. Its net debt stood at about C$11 billion at the end of the third quarter.
The company will retain its commercial fuel business, including 170 cardlocks, bulk plant and travel centers.
©2021 Bloomberg L.P.