Cenovus shares plummet on news of its $3.8-billion deal to buy oilsands rival Ontario hits highest seven-day average of COVID-19 cases since pandemic began Advertisement Two decades ago, Mr. Li merged it with Renaissance Energy, and companies controlled by the Li family have had a majority stake since then. Husky’s roots date back to heavy oil production in Wyoming in the late 1930s. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening.

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However, the price of the deal shows how much value has left the Canadian energy sector as global investors soured. Yahoo is part of Verizon Media. Cenovus Energy Inc. is acquiring Husky Energy Inc., creating Canada’s fourth-largest energy company as it copes with chronically low crude prices and investor pessimism about the industry’s fortunes. In 2017, it bought the Canadian oil sands and natural gas assets of ConocoPhillips for $17.7-billion, a deal that displeased the market and led to a steep decline in the stock, a CEO change and a major debt-reduction exercise. endstream endobj startxref the risk of COVID-19. That means: Comments that violate our community guidelines will be removed. This is a space where subscribers can engage with each other and Globe staff. Last week, ConocoPhillips announced a US$9.7-billion offer for Texas-based shale-oil producer Concho Resources.
The merger transforms Cenovus from a company focused on North American oil sands, natural gas and refining to an international producer with offshore operations off Canada’s East Coast and in the South China Sea.

Mr. Pourbaix will lead the combined operations, while Husky’s Jeff Hart will serve as its chief financial officer. To enable Verizon Media and our partners to process your personal data select 'I agree', or select 'Manage settings' for more information and to manage your choices.

0 %PDF-1.6 %���� 623 0 obj <>/Filter/FlateDecode/ID[<4A9E612148A3C64EADF88F9F988E10B5><15527483BD65CE45B2499BDDA529960A>]/Index[601 39]/Info 600 0 R/Length 116/Prev 703138/Root 602 0 R/Size 640/Type/XRef/W[1 3 1]>>stream Each whole warrant will entitle the holder to acquire a Cenovus share for $6.54 each; the warrants expire in five years. “This deal always came to the top as one of the most compelling deals to do, and in the course of evaluation we looked at it across all kinds of [oil and gas] price scenarios. The one-two punch of Saudi-Russian supply aggression and the world staying at home during COVID-19 slammed oil prices … “The pandemic may have been a bit of a catalyst to get your mind working, but I think the underlying fundamentals of the deal really stand up in all price scenarios.”. 2:16 Stock markets plunge on coronavirus … The two companies currently employ 8,600 staff and contractors, and job cuts are expected to be “material.” Mr. Pourbaix declined to give a number, however. Information about your device and internet connection, including your IP address, Browsing and search activity while using Verizon Media websites and apps. Jon McKenzie, who left Husky to be Cenovus’s CFO in 2018, will be chief operating officer. With a report from Andrew Willis in Toronto. Follow David Milstead and Jeffrey Jones on Twitter, I'm a print subscriber, link to my account, Avoid the use of toxic and offensive language. As such, Cenovus personnel and third-party performing the screening services for Cenovus with the previously mentione d roles and responsibilities may collect, use and disclose certain personal information to facilitate access to our sites in accordance with applicable Cenovus standards, policies and applicable law(s).
Please log in to listen to this story. We and our partners will store and/or access information on your device through the use of cookies and similar technologies, to display personalised ads and content, for ad and content measurement, audience insights and product development. Sign up today. Read our. The Husky Energy upgrader facility is photographed in Lloydminster, Saskatchewan. Full Disclaimer. Non-subscribers can read and sort comments but will not be able to engage with them in any way. It will be fourth-largest by market capitalization with $9.2-billion, behind Canadian Natural Resources Ltd., Suncor Energy Inc. and Imperial Oil Ltd. Cenovus Energy says it now sees the beginnings of a recovery from the slump brought on by COVID-19 and a flood of cheap foreign oil. Jasper Park Lodge is doing a deep clean of the entire hotel and doing "extensive contact tracing" after seven employees tested positive for COVID-19. The projections foreshadow significant job-cutting in Calgary, where the oil patch downturn has wounded the city’s downtown core. Cenovus Energy ()() says it ramped up production in its second quarter to capitalize on a nearly tenfold increase in Canadian heavy crude prices.The company now sees the beginnings of a recovery from the slump brought on by COVID-19 and a flood of cheap foreign oil. 639 0 obj <>stream Cenovus also said Tuesday it will temporarily suspend its crude-by-rail program and defer final investment decisions on major growth projects. © Copyright 2020 The Globe and Mail Inc. All rights reserved. Cenovus was created as the oil-focused spinoff of the former Encana Corp., now Ovintiv Inc., in 2009. Cenovus director Keith MacPhail will serve as independent board chair. You can change your choices at any time by visiting Your Privacy Controls. Welcome to The Globe and Mail’s comment community. Husky shares are down 68.2 per cent year-to-date, while Cenovus is down 62.5 per cent.

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