- Canadian oil and gas giant Cenovus Energy (CVE) has completed the sale of its Marten Hills oil assets in Alberta to Headwater Exploration
- Headwater now holds a 100 per cent interest in 2,800 barrels per day of medium gravity oil production and 270 net sections of Clearwater rights
- The company paid C$35 million for the assets and issued 50 million shares to Cenovus along with 15 million share purchase warrants
- In connection with the transaction, Kam Sandhar, Cenovus’s Senior Vice-President, and Sarah Walters, Cenovus’s Senior Vice-President of Corporate Services, have been appointed to Headwater’s board
- Cenovus Energy is currently up 0.22 per cent to $6.76 per share
Canadian oil and gas giant Cenovus Energy (CVE) has completed the sale of its Marten Hills oil assets in Alberta to Headwater Exploration.
Cenovus unveiled its plans to sell the 100 per cent ownership in early November, which includes 2,800 barrels per day of medium gravity oil production and 270 net sections of Clearwater rights.
Under the terms of the deal, Headwater paid a total of C$35 million to Cenovus and issued 50 million common shares as well as 15 million share purchase warrants, exercisable at a price of $2.00 per share for a period of three years.
With the transaction now complete, Cenovus holds a 25.6 per cent stake in TSX-listed Headwater, or 30.9 per cent assuming the share purchase warrants are exercised in full.
“With the strong support received from Cenovus, the Headwater team has been able to prepare for an active 2021 development program,” said Neil Roszell, Chairman and CEO of Headwater.
“The unique high-return assets acquired will provide the catalyst for the next stage of our corporate evolution,” he added.
In connection with the sale, Kam Sandhar, Cenovus’s Senior Vice-President, and Sarah Walters, Cenovus’s Senior Vice-President of Corporate Services, have been appointed to Headwater’s Board of Directors.
“We look forward to working with Headwater’s highly respected management team as they begin to develop these top-quality oil assets at Marten Hills,” said Kam.
“This is a unique opportunity to get capital and expertise to work right away on a promising portfolio that was unlikely to receive near-term funding from Cenovus, and we believe the closing of this transaction will provide compelling long-term value for Cenovus shareholders,” he concluded.
Cenovus Energy is currently up 0.22 per cent to $6.76 per share at 10:29am EST.
