Cenovus Energy Sells Husky Network, Wembley Assets For $658.0 Million
Cenovus Energy (TSX: CVE) announced on Tuesday the agreements to sell its Husky retail fuels network and the Wembley assets in its conventional business. The firm expects total cash proceeds of $658.0 million from all of the acquisitions.
“With these latest transactions, we now expect to realize more than $1.1 billion of total proceeds from sales announced in 2021,” said Cenovus Energy CEO Alex Pourbaix.
The energy company has reached agreements to sell 337 gas stations in its Husky retail fuels network to retailers Parkland Corporation (TSX: PKI) and Federated Co-operatives Limited. The retail locations are combinations of corporate-owned and dealer-owned sites and a mix of gas bars, on-site car washes, and convenience stores.
The agreement with Parkland stipulates the acquisition of 156 Husky retail locations for approximately $156.0 million. On the other hand, the Federated Co-operatives, representing the co-operatives of Co-operative Retailing System, agreed to acquire 181 retail fuel sites for $264.0 million.
The move to sell the Husky network comes less than a year from when the company completed the Husky Energy (TSX: HSE) $23.6 billion all-stock acquisition deal.
The Husky retail acquisitions are expected to close in mid-2022 subject to approval under the Competition Act and customary closing conditions.
The oil and natural gas producer also entered into an agreement to sell its primarily Montney assets in Wembley to an as of yet unspecified acquirer for total proceeds of $238 million. The assets represent approximately 3,200 barrels of oil equivalent per day in 2021, with about 38% oil and natural gas liquids.
The acquisition of Wembley assets is expected to close in December 2021, subject to customary closing conditions.
In November, the firm announced the achievement of its interim net debt target of $10.0 billion, doubling its quarterly dividend in Q4 2021, and launching a buyback program for 146.5 million shares. The proceeds from these acquisitions are expected to bring the company closer to its net debt goal of $8.0 billion.
Cenovus Energy last traded at $15.16 on the TSX.
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