Cenovus Combines with Husky

Cenovus Energy Inc. (TSX, NYSE: CVE) has announced that its strategic combination with Husky Energy Inc. has closed.

The combination creates Canada’s third largest crude oil and natural gas producer, based on total company production, with about 750,000 barrels of oil equivalent per day, Cenovus noted. The combined company is also now the second largest Canada based refiner and upgrader, with total North American upgrading and refining capacity of approximately 660,000 barrels per day, Cenovus revealed.

The transaction was completed through a definitive arrangement agreement announced on October 25, 2020, under which Cenovus and Husky agreed to combine in an all-stock transaction. Husky common shareholders received 0.7845 of a Cenovus common share and 0.0651 of a Cenovus common share purchase warrant in exchange for each Husky common share.

With the close of the transaction, Husky has become a wholly owned subsidiary of Cenovus and will remain as such until completion of a planned amalgamation among the two entities, Cenovus noted. The combined company will continue to be headquartered in Calgary.

“This is an exciting day for Cenovus as we become a leaner, stronger, more fully integrated oil and natural gas company that is exceptionally well-positioned to weather the current environment and be an energy leader in the years ahead,” Alex Pourbaix, Cenovus’ president and chief executive officer, said in a company statement.

“With the closing of this transaction, we will focus on safely and efficiently integrating the assets and teams of these two great companies while working to realize the $1.2 billion in synergies we’ve identified,” he added in the statement.

“These cost and capital efficiencies, combined with our strong portfolio of well-matched upstream production, midstream and downstream assets as well as improved financial strength, are expected to generate strong value for our shareholders,” Pourbaix went on to say.

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