(WO) — Cenovus Energy has agreed to acquire Athabasca Oil Corporation in a cash-and-stock transaction valued at approximately C$5.7 billion (US$4.1 billion), expanding its oil sands position and adding about 45,000 boed of production.
Under a definitive arrangement agreement announced Monday, Cenovus will acquire all outstanding Athabasca shares for $12 per share. The transaction will consist of between 65% and 75% cash and between 25% and 35% Cenovus shares, depending on shareholder elections and proration.
The acquisition adds Athabasca’s Leismer and Corner oil sands assets, located near Cenovus’s Christina Lake, May River and Thornbury operations. Cenovus said the assets have more than 75 years of proved plus probable reserves life based on estimated 2026 exit production.
Cenovus sees potential to accelerate thermal oil production from the acquired assets to 115,000 bpd by 2032. The company plans to apply its steam-assisted gravity drainage (SAGD) operating model to improve reservoir performance, lower steam-to-oil ratios and accelerate resource recovery.
“This transaction strengthens our position in one of the world’s premier oil-producing regions and is a natural extension of our oil sands strategy,” said Jon McKenzie, Cenovus president and CEO. “Athabasca’s high-quality, long-life assets fit well with our portfolio and provide a clear opportunity to apply our scale and operating expertise to improve performance, grow production and create long-term shareholder value.”
The deal will also consolidate Cenovus’s ownership of Duvernay Energy Corporation, providing an oil-weighted position in the Kaybob Duvernay. Cenovus said the asset offers potential to accelerate development and increase production to a sustained 20,000 boed.
Cenovus expects approximately $85 million in annual corporate and commercial synergies from the acquisition, with most expected to be captured during the first full year following closing.
The cash portion of the transaction will be funded through cash on hand and short-term borrowings. Cenovus expects pro forma net debt of between $5 billion and $5.5 billion at year-end 2026, assuming the maximum $4.3 billion cash consideration.
The boards of both companies have unanimously approved the transaction. Closing is expected in December 2026, subject to regulatory approvals, Athabasca shareholder approval and other customary conditions.
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