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    Cenovus sells oil and gas royalty business to Ontario Teachers Pension Plan

    Cenovus has sold its oil and gas royalty lands for approximately $3.3 billion, reports the Globe and Mail.

    Image courtesy of The Globe and Mail
    Cenovus’ Christina Lake project. Image from The Globe and Mail

    As part of the company’s strategy to cope with the challenging environment of lower commodity prices, Cenovus has sold its Heritage Royalty Limited Partnership (HRP), a holding of about 4.8 million gross acres in Alberta, Saskatchewan, and Manitoba, to the Ontario Teachers’ Pension Plan. A number of options to generate value from the royalty business were assessed prior to deciding that this sale would “maximize value for Cenovus shareholders.” Other efforts made by Cenovus include the restriction of capital investment, cost-cutting, and slower production of oil sands.

    Brian Ferguson, president and CEO of Cenovus, stated that “the proceeds from this sale will strengthen our balance sheet and provide us with greater resilience during these uncertain times as well as the flexibility to invest in organic projects with strong returns.”

    To read the full article in The Globe and Mail, click here and to read Cenovus’ news release on the sale, click here.

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