Authorization

Cenovus and Husky Combine to Create a Resilient Integrated Energy Leader

CALGARY, Alberta, Oct. 25, 2020 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) and Husky Energy Inc. (TSX: HSE) today announced a transaction to create a new integrated Canadian oil and natural gas company with an advantaged upstream and downstream portfolio that is expected to provide enhanced free funds flow generation and superior return opportunities for investors.The companies have entered into a definitive arrangement agreement under which Cenovus and Husky will combine in an all-stock transaction valued at $23.6 billion, inclusive of debt. The combined company will operate as Cenovus Energy Inc. and remain headquartered in Calgary, Alberta. The transaction has been unanimously approved by the Boards of Directors of Cenovus and Husky and is expected to close in the first quarter of 2021.Transaction highlights:

Accretive to all shareholders on cash flow and free funds flow per share



Anticipated annual run rate synergies of $1.2 billion, largely achieved within the first year, independent of commodity prices



Expected free funds flow break-even at West Texas Intermediate (WTI) pricing of US$36 per barrel (bbl) in 2021, and at less than WTI US$33/bbl by 2023



Low exposure to Western Canadian Select (WCS) locational differential risk while maintaining healthy exposure to global commodity prices



Increased and more stable cash flows support investment grade credit profile



Net-debt-to-adjusted-EBITDA ratio of less than 2x expected to be achieved in 2022



Anticipated quarterly dividend of $0.0175 per share (upon Board approval) and positioned for consistent growth



Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share



An Integrated Oil and Natural Gas Leader a?? Key Facts







Standalone Cenovus1



Standalone
Husky1



Pro forma
company1



Production (BOE/d)



~475,000



~275,000



~750,000



Upgrading & refining capacity (BOE/d)



~250,000



~410,000



~660,000



2P reserves (mmBOE)



~7,000



~2,000



~9,000



Takeaway capacity from Alberta (bbls/d)
A A A A  Current pipelines
A A A A  Planned pipelines/expansions




~135,000
~275,000




~130,000
~30,000




~265,000
~305,000



Crude oil storage (mmbbls)



~10



~6



~16



Sustaining capital ($billion per year)



1.2



1.8



2.4



Commitment to ESG leadership



Ambition to achieve net zero emissions by 2050; specific ESG targets and plan to be announced post close

1 Based on year-to-date production.Highly Complementary Integrated Portfolio
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