(WO) — Cenovus Vitality has agreed to amass Athabasca Oil Company in a cash-and-stock transaction valued at roughly C$5.7 billion (US$4.1 billion), increasing its oil sands place and including about 45,000 boed of manufacturing.
Beneath a definitive association settlement introduced Monday, Cenovus will purchase all excellent Athabasca shares for $12 per share. The transaction will include between 65% and 75% money and between 25% and 35% Cenovus shares, relying on shareholder elections and proration.
The acquisition provides Athabasca’s Leismer and Nook oil sands belongings, positioned close to Cenovus’s Christina Lake, Might River and Thornbury operations. Cenovus stated the belongings have greater than 75 years of proved plus possible reserves life based mostly on estimated 2026 exit manufacturing.
Cenovus sees potential to speed up thermal oil manufacturing from the acquired belongings to 115,000 bpd by 2032. The corporate plans to use its steam-assisted gravity drainage (SAGD) working mannequin to enhance reservoir efficiency, decrease steam-to-oil ratios and speed up useful resource restoration.
“This transaction strengthens our place in one of many world’s premier oil-producing areas and is a pure extension of our oil sands technique,” stated Jon McKenzie, Cenovus president and CEO. “Athabasca’s high-quality, long-life belongings match effectively with our portfolio and supply a transparent alternative to use our scale and working experience to enhance efficiency, develop manufacturing and create long-term shareholder worth.”
The deal may even consolidate Cenovus’s possession of Duvernay Vitality Company, offering an oil-weighted place within the Kaybob Duvernay. Cenovus stated the asset affords potential to speed up improvement and enhance manufacturing to a sustained 20,000 boed.
Cenovus expects roughly $85 million in annual company and industrial synergies from the acquisition, with most anticipated to be captured through the first full yr following closing.
The money portion of the transaction can be funded by way of money readily available and short-term borrowings. Cenovus expects professional forma web debt of between $5 billion and $5.5 billion at year-end 2026, assuming the utmost $4.3 billion money consideration.
The boards of each firms have unanimously authorised the transaction. Closing is predicted in December 2026, topic to regulatory approvals, Athabasca shareholder approval and different customary circumstances.