Athabasca Oil, Cenovus Energy Create Duvernay Energy

By Stephen Nakrosis

Athabasca Oil said Tuesday it would work with Cenovus Energy to create Duvernay Energy, a standalone company with assets in Alberta's Kaybob Duvernay play.

The deal would see Athabasca own a 70% equity interest in the new company, while Cenovus would own the remaining 30%. Athabasca said it would manage Duvernay Energy as part of a management and operating services agreement.

Robert Broen, president and chief executive officer of Athabasca Oil, will assume the role of chairman, president and CEO of Duvernay Energy. Duvernay's board will include three members nominated by Athabasca and one member nominated by Cenovus, Athabasca said.

The new company will be debt free and seeded with $40 million cash and a $50 million credit facility, according to Athabasca.

The deal will have an effective date of Jan. 1, 2024, and is expected to close in the first quarter of next year.

Duvernay Energy will have exposure to about 200,000 gross acres with around 500 gross future well locations, Athabasca said.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

December 19, 2023 17:43 ET (22:43 GMT)

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