Cenovus Energy Inc. has entered into an agreement to sell its majority interest in the Weyburn carbon-dioxide enhanced oil recovery operation for cash proceeds of $940 million. The sale is expected to close in the fourth quarter of 2017, subject to customary closing conditions.
The sale ends a historic relationship of the company with the Weyburn area that extended back to the discovery well drilled when the company was previously known as Central Del Rio.
As the Weyburn field and plant at Goodwater was developed over the years, under the company names PanCanadian and EnCana, they introduced the injection of carbon dioxide in 2000 to enhance the recovery of oil and extend the life of the field.
The facility became a showcase for the company as they hosted oil company representatives and scientists from around the world to see their technology in use in keeping CO2 underground and recycling it for use in oil production. The Weyburn facility had a production of around 11,500 barrels per day equivalent.
The previously announced sale of Cenovus’s Pelican Lake assets closed on Sept. 29, and the company still anticipates the previously announced sales of its Palliser and Suffield assets to close later this year. The sale of assets is to help finance their purchase of ConocoPhillips heavy oil facilities at Fort McMurray.
“We’re pleased with the progress we’ve made in delivering on our divestiture plan to optimize our portfolio and deleverage the company’s balance sheet,” said Alex Pourbaix, Cenovus President and Chief Executive Officer.
“Net proceeds from the Weyburn asset sale, combined with the other three divestitures announced earlier this fall, will position us to retire the entire $3.6 billion bridge facility associated with the ConocoPhillips asset purchase by the end of 2017,” he added.
