Cenovus Energy Inc. is selling its Pelican Lake heavy oil operations and other assets in northern Alberta to Canadian Natural Resources Limited for $975 million.
Cenovus is using the money to help pay off the $3.6 billion bridge loan it took out to fund its acquisition of ConocoPhillips assets earlier this year.
“This represents a significant first step in our strategy to optimize our asset portfolio and deleverage our balance sheet as planned following the acquisition of the ConocoPhillips assets,” said Brian Ferguson, Cenovus President and Chief Executive Officer in a statement.
“The divestiture processes for the remainder of our legacy conventional assets are proceeding as expected, with strong interest from potential buyers,” added Ferguson.
Cenovus is also selling its Suffield oil and natural gas assets, Palliser assets in southern Alberta and Weyburn
carbon-dioxide enhanced oil recovery operation in Saskatchewan. According to Cenovus, the Suffield sale is “well advanced.”
Canadian Natural says the Pelican Lake operations produce 19, 600 barrels of oil per day.
The sale is expected to close on or before September 30.