ConocoPhillips Concludes Asset Divestment To Cenovus Energy
Zacks Investment Research | May 17, 2017 10:12PM ET
ConocoPhillips (NYSE:COP) recently announced that it has concluded its earlier announced transaction with Cenovus Energy Inc. (TO:CVE) . The transaction pertains to the divestment of the company’s 50% non-operated interest in the Foster Creek Christina Lake (“FCCL”) oil sands partnership as well as the majority of its western Canada Deep Basin gas assets.
ConocoPhillips Canada will retain its operated 50% interest in the Surmont oil sands joint venture and its operated 100% Blueberry-Montney unconventional acreage position.
Based on the transaction, the company has revised its second-quarter 2017 production guidance to 1,365–1,405 thousand barrels of oil equivalent per day. This indicates the partial quarter impact of this disposition.
The transaction is immediately value accretive and is expected to increase ConocoPhillips’ value proposition. This will also strengthen the company’s balance sheet and accelerate its planned share repurchase program.
On completion of the transaction, Cenovus issued 208 million common shares to ConocoPhillips as a portion of the payment for the disposition of assets. Currently, ConocoPhillips owns about 16.9% of the issued and outstanding Cenovus common shares. Preceding the transaction, neither ConocoPhillips nor its affiliates owned any Cenovus common shares.
Depending on market conditions and regulatory requirements, ConocoPhillips may from time to time lower its beneficial ownership, or reduce its control or direction over any of Cenovus’s securities through market transactions, private agreements or otherwise.
Investor confidence on the ConocoPhillips’ stock is reflected in its price chart. Shares of the company have lost 2.3% in the last three months, while the Zacks Investment Research
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