Canadian oil company
Cenovus Energy Inc
) has entered into a deal to divest its Shaunavon tight oil asset
in southern Saskatchewan. Surge Energy Inc. - another
Canadian energy explorer - will purchase the asset for C$240
million in cash. The deal is likely to close by mid July, subject
to certain usual closing conditions.
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As of May 2013, Shaunavon assets comprised 54 sections of land
and its production was approximately 3,600 barrels of oil per
day. Following a portfolio appraisal, Cenovus earmarked its
Bakken and Shaunavon assets for sale and started marketing them
earlier in February. While the Bakken properties remain on the
block, management at Cenovus decided to offload its Saskatchewan
Headquartered in Calgary, Alberta, Cenovus is an integrated oil
company with ownership interest in two high-quality refineries in
Illinois and Texas. Cenovus' operations include growing their oil
projects and natural gas and crude oil production in Alberta and
Saskatchewan. The company has four top-quality enhanced oil
projects, namely, Foster Creek, Christina Lake, Pelican Lake and
Cenovus enjoys the benefits of industry-leading oil sands assets
that position it for long-term growth. We believe the company
will remain focused on improving its operational efficiency
initiatives throughout 2013.
However, Cenovus reported weaker-than-expected first quarter 2013
results due to lower crude oil price realizations. Earnings per
share came in at 44 cents, missing the Zacks Consensus Estimate
of 47 cents.
Cenovus currently carries a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, in the energy sector, three firms expected to
significantly outperform the broader U.S. equity market over the
next one to three months are
Atlas Energy LP
Oiltanking Partners LP
). All three firms sport a Zacks Rank #1 (Strong Buy).