Cenovus CEO to retire as company sells up to $5bn in non-core assets
Canadian oil producer Cenovus Energy (TSX, NYSE:CVE) said Tuesday its chief executive officer Brian Ferguson will retire in October, but plans to stay as an adviser for another five months as the firm readies to sell up to $5 billion of holdings to pay for ConocoPhillips (NYSE:COP) acquisitions.
Ferguson, who has been at the helm of the Calgary-based firm since its launch as an independent public company in 2009, will also step down from the board by Oct. 31.
The news come as Cenovus is trying to win over investors upset by its Cdn$17.7-billion acquisition of oil sands and natural gas assets from ConocoPhillips Co.
The oil producer’s shares have sunk since the deal was announced in March, reflecting investors’ concerns over the company’s increasing debt pile.
Shares in the company fell more than 10% after the news, trading hands in Toronto at Cdn$9.31 at 10:47 ET. They have lost almost 45% of their value in the last three months.
Cenovus tried calming shareholders by announcing it has made progress on offloading between $4 billion and $5 billion of non-core assets to help pay for the assets it bought from ConocoPhillips. The new figures represents an increase from previous plans to raise at least $3.6 billion by year-end.
It also said it hopes to announce divestiture deals by the end of the year, particularly for its portfolio of conventional oil properties, including Pelican Lake, Suffield, Weyburn and Palliser which together produce about 112,000 barrels of oil equivalent per day.
Another of the company’s goal is to cut up to $1 billion in costs over the next three years, as well as to save about $375 million from general and administrative expenses, including from an optimized workforce.
Cenovus has been one of the very few companies to revive deferred projects in the oil sands sector, following a recovery in crude prices.
Last year, the company resumed the expansion of its Christina Lake oil sands project, in northeast Alberta. Two more projects under review, known as Narrows Lake A and Foster Creek H, could add 75,000 barrels per day of new capacity in coming years.