CENOVUS TO SELL INTERESTS IN WEYBURN ASSET

Cenovus Energy has entered into an agreement to sell its majority interest in the Weyburn carbon-dioxide enhanced oil recovery operation in Saskatchewan for cash proceeds of $940 million. The sale is expected to close in the fourth quarter of 2017, subject to customary closing conditions.The previously announced sale of Cenovus’s Pelican Lake assets closed on September 29, 2017 and the company still anticipates the previously announced sales of its Palliser and Suffield assets to close later this year.
“We’re pleased with the progress we’ve made in delivering on our divestiture plan to optimize our portfolio and deleverage the company’s balance sheet,” said Alex Pourbaix, Cenovus President & Chief Executive Officer. “Net proceeds from the Weyburn asset sale, combined with the other three divestitures announced earlier this fall, will position us to retire the entire $3.6 billion bridge facility associated with the ConocoPhillips asset purchase by the end of 2017.”
The original oil production facilities at Weyburn were built in the mid-1950s. In 1964, waterflooding technology was introduced, which involves injecting produced water back into the reservoir to displace oil from the oil-bearing formation. In 2000, CO2 flooding was introduced alongside waterflooding to maximize oil recovery. Today, about 60 percent of the Weyburn field is under CO2 flood. The Weyburn project is Canada’s largest CO2 enhanced oil recovery operation and is recognized as the world’s largest geological CO2 storage project.
Weyburn’s reservoir (the Midale formation) has favourable conditions, such as temperature, pressure and oil composition, that allow CO2 to act as a solvent. It extracts oil trapped in extremely small pores of the reservoir rock and sweeps it towards the producing wells. Compared to the recoveries normally seen with waterflooding alone, this greatly increases the ultimate recovery of oil from our reservoir. (Source: Cenovus)