Page 8 - NorthAmOil Week 48 2021

NorthAmOil INVESTMENT NorthAmOil

Cenovus announces nearly

$515mn of asset sales

CANADA CANADA’S Cenovus Energy has reached sep- (NGLs) accounted for around 38% of this. That
arate agreements to sell nearly CAD660mn transaction is anticipated to close in December
($515mn) worth of upstream and downstream this year.
assets. “With these latest transactions, we now
On the downstream side, Cenovus has agreed expect to realise more than CAD1.1bn [$858mn]
to sell its Husky retail fuels network, comprising of total proceeds from sales announced in 2021,”
337 gasoline stations, to two Canadian firms, Cenovus’ president and CEO, Alex Pourbaix,
Parkland Corporation and Federated Co-op- stated.
eratives, for CAD420mn ($328mn) in cash. The transactions come after Cenovus
The sale is expected to close in mid-2022. The achieved its interim net debt target of CAD10bn
network belonged to Husky Energy, which ($7.8bn) in November. Pourbaix previously
Cenovus acquired earlier this year. In this week’s attributed the achievement to a combination of
statement, Cenovus noted that it would retain proceeds from asset sales and higher revenues
its commercial fuels business, which includes from stronger oil and gas prices.
roughly 170 cardlock, bulk plant and travel cen- The company said this week that the proceeds
tre locations. from the latest transactions would advance net
Federated Co-op said the deal was the largest debt repayment towards its longer-term target of
acquisition in its history. CAD8bn ($6.2bn) and would boost its capacity
On the upstream side, the company has to increase shareholder returns. Cenovus has
agreed to sell conventional assets in Wembley, already doubled its quarterly dividend as of this
Alberta, primarily targeting the Montney play, quarter.
for CAD238mn ($186mn) in cash to an undis- Cenovus, which is Canada’s third largest oil
closed buyer. and gas producer, previously paused a number
The assets are estimated to have produced of planned asset sales when oil and gas prices
3,200 barrels of oil equivalent per day (boepd) collapsed last year, but has since revived efforts
on average in 2021. Oil and natural gas liquids to shed non-core operations.™

Chevron unveils 2022 capex budget of $15bn

GLOBAL CHEVRON has unveiled a capital expenditure of its overall spending for 2022 at $2.3bn. The
and exploratory budget of $15bn for 2022. This US downstream segment is set to account for
is at the low end of the super-major’s initial $15- the majority of this at $1.7bn, while interna-
17bn budget plan, but would still be above its tional downstream spending of $600mn has
projected spending for 2021 by more than 20%. been earmarked.
The capital programme includes roughly Chevron’s chairman and CEO, Mike Wirth,
$800mn that has been earmarked for “low- said in a statement that the 2022 capex budget
er-carbon spending”, Chevron said. However, it reflected his company’s “enduring commitment”
excludes expected inorganic capital of $600mn to capital discipline as the global economy con-
Chevron has allocated in anticipation of the formation of a renewable tinues to recover from the coronavirus (COVID-
around $3bn worth of fuel feedstocks joint venture with Bunge, the 19) pandemic.
upstream spending for super-major added. The company also announced that it was rais-
next year to the US’ Under the 2022 programme, $6.4bn will ing its share buyback guidance range to $3-5bn
giant Permian Basin. be earmarked for the company’s US upstream per year, up from prior guidance of $2-3bn per
segment. Its international upstream segment year. This comes as large and small publicly listed
will account for $6.2bn of the budget, for a companies alike continue to face mounting pres-
combined $12.6bn to be spend on upstream sure to prioritise returns to shareholders over
activities. growth.
Around $3bn worth of upstream spending “We’re a better company than we were just a
for next year has been allocated to the US’ giant few years ago. We’re more capital- and cost-ef-
Permian Basin, with another $1.5bn for other ficient, guided by a clear and consistent objec-
shale and tight assets globally. tive to deliver higher returns and lower carbon,”
Chevron’s downstream segment is set to Wirth stated. “And this enables us to return more
account for a considerably smaller proportion cash to shareholders.”™

P8 www. NEWSBASE .com Week 48 02•December•2021