Canada's Cenovus Energy to buy Athabasca Oil in $5.7bn deal

(Sharecast News) - Canada's Cenovus Energy said on Monday that it has agreed to buy Athabasca Oil in a $5.7bn cash and stock deal. Under the terms of the agreement, which is expected to close in December, Cenovus will pay $12.00 per share.

Cenovus said Athabasca was a "clear strategic fit" with its core oil sands business, and adds around 45,000 barrels of oil equivalent per day. This includes thermal production proximal to Cenovus's Christina Lake, May River and Thornbury assets, expanding the company's position "in a core resource fairway".

The integrated oil and natural gas company expects to realise corporate and commercial synergies of approximately $85m per year, with the majority captured in the first full year after the deal closes.

Cenovus president and chief executive Jon McKenzie said: "This transaction strengthens our position in one of the world's premier oil-producing regions and is a natural extension of our oil sands strategy.

"Athabasca's high-quality, long-life assets fit well with our portfolio and provide a clear opportunity to apply our scale and operating expertise to improve performance, grow production and create long-term shareholder value."