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Cenovus (CVE) Wraps Up Divestment of Martin Hills Oil Assets
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Cenovus Energy Inc. (CVE - Free Report) announced the divestment of its Marten Hills oil assets in Northern Alberta to Headwater Exploration Inc. for C$100 million.
The deal, which was signed on Nov 9, came after Cenovus agreed to acquire rival Husky Energy as the pandemic-induced blow to the economy forced the entire energy industry to reduce expenses and seek consolidation to survive the economic downturn.
The transaction involves C$35 million in cash, 50 million common Headwater shares and 15 million purchase warrants exercisable at C$2 per common share over a three-year period. As a result, Cenovus will hold 25.6% of the upstream company’s shares. However, if the warrants are fully exercised, the integrated company shall own 65 million of Headwater shares, indicating 30.9% of the upstream company’s issued and outstanding shares.
Presently, Headwater owns a 100% working interest in approximately 2,800 barrels per day of medium-gravity oil production and 270 net sections of rights to the Clearwater formation. Beside this, the upstream company approved a Gross Overriding Royalty (“GORR”) agreement with Cenovus, which allows the latter to share in the benefits from further development of the Clearwater formation. Notably, Headwater is committed to an investment of a minimum C$100 million on the 189,000 acres of acquired lands by late 2022.
Cenovus believes that the closing of this transaction will provide a long-standing value for its shareholders. The company assumes that the divestiture is a golden opportunity to uphold the assets’ value since Headwater is well-placed to develop the prolific assets at Marten Hills.
Company Profile & Price Performance
Headquartered in Calgary, AB, Cenovus is a leading integrated energy company. Its stock has gained 31% in the past month.
Over the past 60 days, the Zacks Consensus Estimate for Summit Midstream’s 2020 earnings has been raised by 25.9%.
Hess Midstream is expected to see earnings growth of 137% in 2021, while Enerplus is likely to see earnings growth of 400% next year.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Cenovus (CVE) Wraps Up Divestment of Martin Hills Oil Assets
Cenovus Energy Inc. (CVE - Free Report) announced the divestment of its Marten Hills oil assets in Northern Alberta to Headwater Exploration Inc. for C$100 million.
The deal, which was signed on Nov 9, came after Cenovus agreed to acquire rival Husky Energy as the pandemic-induced blow to the economy forced the entire energy industry to reduce expenses and seek consolidation to survive the economic downturn.
The transaction involves C$35 million in cash, 50 million common Headwater shares and 15 million purchase warrants exercisable at C$2 per common share over a three-year period. As a result, Cenovus will hold 25.6% of the upstream company’s shares. However, if the warrants are fully exercised, the integrated company shall own 65 million of Headwater shares, indicating 30.9% of the upstream company’s issued and outstanding shares.
Presently, Headwater owns a 100% working interest in approximately 2,800 barrels per day of medium-gravity oil production and 270 net sections of rights to the Clearwater formation. Beside this, the upstream company approved a Gross Overriding Royalty (“GORR”) agreement with Cenovus, which allows the latter to share in the benefits from further development of the Clearwater formation. Notably, Headwater is committed to an investment of a minimum C$100 million on the 189,000 acres of acquired lands by late 2022.
Cenovus believes that the closing of this transaction will provide a long-standing value for its shareholders. The company assumes that the divestiture is a golden opportunity to uphold the assets’ value since Headwater is well-placed to develop the prolific assets at Marten Hills.
Company Profile & Price Performance
Headquartered in Calgary, AB, Cenovus is a leading integrated energy company. Its stock has gained 31% in the past month.
Zacks Rank & Stocks to Consider
Cenovus currently carries a Zack Rank #4 (Sell).
Some better-ranked players in the energy space are Summit Midstream Partners, LP (SMLP - Free Report) and Altus Midstream Company (ALTM - Free Report) , eachcurrently sporting a Zacks Rank #1 (Strong Buy), and Enerplus Corporation (ERF - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, the Zacks Consensus Estimate for Summit Midstream’s 2020 earnings has been raised by 25.9%.
Hess Midstream is expected to see earnings growth of 137% in 2021, while Enerplus is likely to see earnings growth of 400% next year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>