Cenovus Energy Inc. and one of its subsidiaries have entered into an agreement to sell the general partnership that holds the Pipestone and Wembley natural gas and liquids business in northwestern Alberta (the “Pipestone Business”) for cash proceeds of $625 million. The transaction also includes the Pipestone Business’s 39% operated working interest in the Wembley gas plant. The sale is expected to close in the third quarter of 2018, subject to customary closing conditions.

“I’m pleased with this important step towards streamlining and rationalizing our acreage in the Deep Basin,” said Alex Pourbaix, President & Chief Executive Officer. “These are high quality assets and we believe the Pipestone transaction will provide compelling value for Cenovus shareholders.”

As with previous divestitures, proceeds from this sale will be used to further deleverage the company’s balance sheet.

Cenovus is in various stages of evaluating and marketing other non-core Deep Basin assets for potential divestment. The company is encouraged by the high level of interest it has seen in these processes but remains resolute that all asset dispositions are contingent upon receiving fair value for the company’s shareholders.

TD Securities Inc. acted as exclusive financial advisor to Cenovus on this transaction.

Transaction summary:

- Gross proceeds ($ million1): 625
- Year-to-date average production (BOE/d)(2): ~8,800
- Natural gas (%): 55
- Year-to-date operating margin ($ millions) (1)(3): ~22
- Price per flowing barrel ($ per BOE/d)(1): ~71,000
(1) All dollar amounts are in Canadian currency unless otherwise specified.
(2) Based on average production for the period January 1, 2018 to June 30, 2018.
(3) Year-to-date as of June 30, 2018. Operating margin is an additional subtotal found in Note 1 of Cenovus’s Interim Consolidated Financial Statements (unaudited) for the period ended June 30, 2018 (available on SEDAR at sedar.com, on EDGAR at sec.gov and Cenovus's website at cenovus.com).

About Cenovus Energy Inc.

Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) is a Canadian integrated oil and natural gas company. It is committed to maximizing value by responsibly developing its assets in a safe, innovative and efficient way. Operations include oil sands projects in northern Alberta, which use specialized methods to drill and pump the oil to the surface, and established natural gas and oil production in Alberta and British Columbia. The company also has 50% ownership in two U.S. refineries. Cenovus shares trade under the symbol CVE, and are listed on the Toronto and New York stock exchanges.