Canadian oil and gas producer Cenovus Energy Inc. said on Nov. 9 it will sell its Marten Hills oil assets in northern Alberta to Headwater Exploration Inc. for CA$100 million (US$77.16 million).

The deal comes days after Cenovus agreed to buy rival Husky Energy Inc. to create Canada's No. 3 oil and gas producer, as a pandemic-driven collapse in demand forces the industry to cut costs and seek consolidation to weather the downturn.

Total consideration paid to Cenovus includes CA$35 million in cash, 50 million common shares of Headwater and 15 million share purchase warrants. Cenovus will own about 26% of Headwater shares, upon closing of the deal, which is expected to happen around Dec. 22.

Marten Hills Acquisition Asset Map (Source: Headwater Exploration Inc. Investor Presentation)
Marten Hills Acquisition Asset Map (Source: Headwater Exploration Inc. Investor Presentation)

Peters & Co. Ltd. acted as exclusive financial adviser to Headwater for the transaction. Burnet, Duckworth & Palmer LLP provided legal counsel to the company.

(US$1 = 1.2960 Canadian dollars)

Onshore