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Steam generators at Cenovus's Foster Creek project in northern Alberta.

The last thing a company under siege should do is dither. Investors hate uncertainty, and the second a chief executive shows signs of waffling, they flee.

Which is why Cenovus should be applauded for its quick actions. The company should never have been levered the way it was heading into the oil price crash – a memorable lesson for any and all management teams – but at least the oil sands giant moved furiously to get its balance sheet in order.

First there was the $1.5-billion bought deal in February, and Cenovus made it crystal clear the proceeds would go toward paying down debt. Now there's the sale of royalty lands and some future revenues to Ontario Teachers' Pension Plan for $3.3-billion – something Cenovus had promised for the past few quarters.

The good news from all this is that the company's debt burden is falling dramatically. By the calculations of analyst Arthur Grayfer at CIBC World Markets, a $3-billion sale was expected to drop Cenovus' debt next year to 0.7 times its cash flow from two times.

The catch: the company's dividend lingers. "The issue that arises in our view, notwithstanding the strong financial capacity, is that the dividend is a heavy burden if the company is going to pursue growth," Mr. Grayer wrote in a research note earlier in June.

Cenovus hasn't signaled specifically what the sale proceeds will go toward, but in a statement CEO Brian Ferguson stressed the importance of strengthening the company's balance sheet. He also said the sale provides flexibility to invest in organic projects – suggesting Cenovus wants to invest in its oil sands properties, after slashing its capital expenditure budget by more than a billion dollars earlier this year.

Where the dividend fits into all of this still isn't clear. On the company's last quarterly conference call, Mr. Ferguson stressed that he wants to pay out 20 to 25 per cent of the company's after-tax cash flow to shareholders. To safely do that, Cenovus needs oil prices to hover between $70 and $75 (U.S.) per barrel – yet West Texas Intermediate crude is currently trading at $58.95 per barrel. (Mr. Ferguson said all this already assuming a royalty lands sale would go through.)

This has weighed on Mr. Grayfer's analysis. Even though the sale process is a positive, he worried the company's "high payout ratio will weigh on the stock once the initial exuberance wears off."

Other analysts expressed similar concerns. "Although a fee land disposition could provide a positive catalyst for the stock in the near term, we believe higher oil prices are required to fund its growth initiatives and justify the company's premium to its integrated peers," BMO Nesbitt Burns analyst Randy Ollenberger wrote in a note to clients this spring.

So far, their analysis seems spot on. Cenovus is currently trading at $19.81 – 11 per cent lower than the bought deal share price in February.

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