Topic: How To Invest

The Successful Investor Hotline – Friday, September 8, 2017

Article Excerpt

CENOVUS ENERGY INC., $9.85, Toronto symbol CVE, recently acquired 100% of its main oil sands properties in Alberta—Christina Lake and Foster Creek. It did that by buying the 50% stake held by its partner in the project, ConocoPhillips (New York symbol COP). Cenovus also purchased ConocoPhillips’ conventional oil fields in Alberta and B.C. In all, the company paid $17.7 billion, consisting of $14.1 billion in cash plus 208 million Cenovus common shares. The company borrowed most of the cash it needed to complete the purchase. As a result, Cenovus’s total debt of $12.5 billion (as of June 30, 2017) is just slightly above its $12.1 billion market cap (the total value of all outstanding shares). To help pay down that debt, the company has agreed to sell its Pelican Lake heavy oil operations in northern Alberta to Canadian Natural Resources Ltd. (Toronto symbol CNQ). Cenovus will receive $975 million when it completes the transaction by September 30, 2017. That deal is part of the…

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