Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

A construction worker walks past the steam generating facility at the Cenovus Foster Creek SAGD oil sands operations near Cold Lake, Alberta, July 9, 2012.

Todd Korol/Reuters

Houston-based ConocoPhillips Co. plans to sell its 10-per-cent stake in Canadian oil company Cenovus Energy Inc.

ConocoPhillips picked up its Cenovus shares in 2017 as part of a $17.7-billion deal in which Cenovus secured a 50-per-cent interest in Conoco’s Foster Creek and Christina Lake oil sands projects. Conoco acquired 208 million shares of Cenovus in the deal, along with $14.1-billion in cash.

The sale gave Cenovus full control of the steam-driven bitumen assets in what was, at the time, the biggest deal in Alberta’s oil sands. The acquisition immediately doubled Cenovus’s total production to 588,000 barrels of oil a day.

Story continues below advertisement

It also made Conoco the biggest investor in the Calgary-based company, though the U.S. oil giant has always said it would not be a long-term holder of Cenovus equity.

Ryan Lance, Conoco chairman and chief executive officer, told an investor call Tuesday that the company intends to sell its Cenovus shares in the open market beginning in the second quarter of 2021. It expects to complete the sale by the fourth quarter of 2022, with proceeds used to increase stock buybacks.

Cenovus did not immediately return a request for comment Tuesday.

Conoco’s stake in Cenovus would be worth about $2-billion, based on Monday’s close. Rumours of a sale have swirled since 2018.

At the time, people familiar with the plan told Reuters that the U.S. energy company had held discussions with investment banks about appointing advisers to the sale. However, they cautioned that the precise timing would depend on market conditions.

Mr. Lance said in a press release Tuesday that, over all, the first quarter of the 2021-22 fiscal year “was a momentous one” for Conoco.

In particular, he pointed to the closing of a US$9.7-billion, all-share deal to buy rival U.S. shale oil producer Concho Resources Inc. – one of the many moves toward North American energy sector consolidation in 2020 on the back of lower fuel prices and demand.

Story continues below advertisement

Cenovus also got in on the action. Days after the Conoco announced its Concho buy in October, Cenovus announced it would acquire Husky Energy Inc. in a $3.8-billion deal that created Canada’s fourth-largest energy company.

Alex Pourbaix, Cenovus’s CEO, said at the time he and his counterpart at Husky, Rob Peabody, had discussed combining the companies at various times in recent years. Talks became serious in the summer, after the coronavirus took its toll on energy demand.

Along with the Cenovus divestment, Conoco reported first-quarter profit that beat Wall Street expectations on Tuesday, as a vaccines-led return of travel demand and a winter storm that swept parts of the U.S. in February boosted prices for oil and gas.

Stronger fuel prices delivered cash flow from operations of US$2.1-billion, despite a US$1-billion hit from the unravelling of hedges and restructuring expenses from the company’s acquisition of Concho.

Conoco said it sold its oil and gas for an average US$45.36 a barrel during the quarter, 17 per cent higher than the year-ago period. However, production slipped 4 per cent from a year ago because of the effects of February’s storm.

The company also outlined a plan to cut its gross debt by US$5-billion over the next five years.

Story continues below advertisement

With a report from Reuters

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies