Canada's Cenovus Energy Inc. (NYSE: CVE) said it may sell parts of the Deep Basin natural gas assets it recently bought from Houston-based ConocoPhillips (NYSE: COP), Royal Bank of Canada (RBC) analysts wrote in a research note on April 23.
Cenovus CEO Brian Ferguson held a conference call with analysts last April 21, and the oil company "signaled that it would also be open to potentially monetizing some portion of the Deep Basin midstream assets," according to the note.
"Cenovus has had seven inbound calls from CEOs of various energy companies looking to ensure the company is aware of their interest in certain Deep Basin assets," the analysts wrote.
RBC acted as an adviser for Cenovus for the ConocoPhillips deal. Cenovus did not immediately respond to a request for comment.
The C$17.7-billion (US$13.3-billion) acquisition last month of ConocoPhillips oil and gas assets effectively doubles the size of Cenovus. But the deal dents the company's pristine balance sheet and saddles the pure-play crude producer with Deep Basin natural gas assets that some investors and analysts have said it has no business holding.
Cenovus shares crashed last month in their biggest single-day drop on news of the deal, which is to be funded through debt and selling shares and what the company deems to be "non-core" assets.
"Select assets within the Deep Basin could be tagged as non-core," according to the RBC note. "This was new to us and opens up interesting de-leveraging possibilities for Cenovus."
While the company had wanted to raise C$3.6 billion through asset sales, it may end up raising more, according to the note.
Recommended Reading
Geothermal ‘Could Save the World,’ but Faces Familiar Subsurface Risks
2024-03-20 - CERAWeek panelists discussed hurdles to widespread use of Earth’s heat to generate power — problems familiar to oil and gas operators.
Defeating the ‘Four Horsemen’ of Flow Assurance
2024-04-18 - Service companies combine processes and techniques to mitigate the impact of paraffin, asphaltenes, hydrates and scale on production—and keep the cash flowing.
TGS, SLB to Conduct Engagement Phase 5 in GoM
2024-02-05 - TGS and SLB’s seventh program within the joint venture involves the acquisition of 157 Outer Continental Shelf blocks.
2023-2025 Subsea Tieback Round-Up
2024-02-06 - Here's a look at subsea tieback projects across the globe. The first in a two-part series, this report highlights some of the subsea tiebacks scheduled to be online by 2025.
StimStixx, Hunting Titan Partner on Well Perforation, Acidizing
2024-02-07 - The strategic partnership between StimStixx Technologies and Hunting Titan will increase well treatments and reduce costs, the companies said.