- Athabasca Oil (TSX:ATH) and Cenovus Energy (TSX:CVE) have announced the formation of Duvernay Energy by combining the Kaybob assets
- Duvernay Energy will be a standalone corporation and will provide exposure to more than 200,000 gross acres
- Athabasca Oil will own a 70 per cent interest in Duvernay while Cenovus will own the remaining 30 per cent
- Shares of Athabasca Oil are up 3.95 per cent to C$4.21 as of 11:36 am ET, while shares of Cenovus Energy are up 0.930 per cent to $22.69 as of 11:33 am ET
Athabasca Oil (TSX:ATH) and Cenovus Energy (TSX:CVE) have partnered to develop a new corporation in Duvernay Energy.
In a joint statement, the companies said Duvernay will be a standalone corporation and will provide exposure to more than 200,000 gross acres.
Under the terms of the agreement, Athabasca Oil will own a 70 per cent interest in Duvernay while Cenovus will own the remaining 30 per cent. It is estimated that Athabasca will contribute $22 million in seed capital and Cenovus will contribute $18 million.
The joint venture will consolidate the two companies’ assets in the Kaybob Duvernay resource play in northwest Alberta. Current production from the Duvernay Energy assets is 2,000 boe/d with plans of increasing that to 25,000 boe/d by the end of the decade.
Moving into 2024, a development program will include 12 gross wells with a capital budget of $82 million. The program is expected to be funded from the $40 million seed capital contribution and cash flow from Duvernay Energy.
Athabasca Oil will also manage Duvernay Energy through a management and operating services agreement. Meanwhile, Duvernay Energy’s board of directors will include three members nominated by Athabasca and one member nominated by Cenovus.
According to Athabasca Oil, the transaction is aligned with its strategy to maximize cash flow per share growth and return capital to shareholders.
Athabasca Oil is a Canadian energy company with a focused strategy on the development of thermal and light oil assets.
Shares of Athabasca Oil are up 3.95 per cent to C$4.21 as of 11:36 am ET, while shares of Cenovus Energy are up 0.930 per cent to $22.69 as of 11:33 am ET.
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