Cenovus Mulls Selling C$3 Billion in Alberta Assets: Sources

• Cenovus' net debt jumped to C$10.7 billion after the MEG Energy takeover, and the company has committed to reducing it to C$4 billion over time
• The Deep Basin assets are conventional, natural gas-heavy fields with mature production; Cenovus allocated only C$500 million capital to conventional business in 2026 versus up to C$3.6 billion for oil sands
• Conventional assets are expected to produce up to 125,000 barrels of oil equivalent per day in 2026, as Cenovus sharpens focus on its core oil sands business

Cenovus Energy Considers C$3 Billion Asset Sale to Reduce Debt

Canadian oil producer Cenovus Energy is exploring the sale of conventional oil and gas assets in Alberta's Deep Basin region for approximately C$3 billion ($2.17 billion), according to sources familiar with the matter. The company has contacted potential buyers in recent weeks, though plans remain preliminary and no final decision has been made.

Strategic Rationale:

The potential divestiture aligns with Cenovus's strategy to focus on its core oil sands business following its C$8.5 billion acquisition of MEG Energy via Strathcona Resources. The Deep Basin assets are conventional, natural gas-heavy holdings characterized as mature fields with declining output that don't require advanced drilling technologies.

Financial Context:

Cenovus's net debt surged to approximately C$10.7 billion after the MEG Energy takeover, which included assuming C$800 million of MEG's debt and securing a C$2.7 billion acquisition loan. The company has committed to reducing net debt to C$4 billion over time, making the Deep Basin sale a potential pathway toward that target.

Capital Allocation Shift:

Demonstrating its strategic pivot, Cenovus increased 2026 oil sands capital allocation to C$3.6 billion from C$2.8 billion in 2025, while conventional business investment rose only modestly to C$500 million from C$400 million. Conventional assets, including Deep Basin, are forecast to produce up to 125,000 barrels of oil equivalent per day in 2026.

Market Implications:

The sale would streamline Cenovus's portfolio toward higher-margin oil sands operations while addressing balance sheet concerns. For buyers, the assets represent an opportunity to acquire established Canadian conventional production, though with inherent production decline characteristics.