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CALGARY, AB – Cenovus Energy Inc. announced today that they will be purchasing ConocoPhillips’ 50% interest in the FCCL Partnership, the companies’ jointly owned oil sands venture operated by Cenovus.

The reported deal is worth $17.7 billion which includes $14.1 billion in cash and 208 million Cenovus common shares.

The company says the transaction is expected to close in the second quarter of 2017.

“This transformational acquisition allows us to take full control of our best-in-class oil sands projects and to add a second growth platform across the prolific Deep Basin that provides complementary short-cycle development opportunities,” said Brian Ferguson, Cenovus President & Chief Executive Officer. “The acquisition is accretive and significantly increases Cenovus’s growth potential. Going forward, we plan to focus capital spending on these two value platforms. At the same time, we intend to divest a significant portion of our legacy conventional assets to help fund the transaction.”

Cenovus says that they plan on spending $170 million in 2017 on the acquired Deep Basin assets.

“Beginning with a three-rig drilling program in 2017, with plans to expand thereafter, Cenovus believes these properties have the potential for production to grow from an estimated 120,000 BOE/d in 2017 to approximately 170,000 BOE/d in 2019, a more than 40% increase. The company expects to retain key Deep Basin technical operating and business staff as part of the acquisition. Cenovus will also enter into a two-year technical services agreement providing access to ConocoPhillips’ expertise in developing and operating the Deep Basin assets.”

The locations of the Deep Basin are in Alberta and British Columbia with exposure to approximately three million net acres across three core operating areas: Elmworth-Wapiti, Kaybob-Edson and Clearwater.

Cenovus says there could be close to 1,500 drilling opportunities at the Deep Basin/Photo: Cenovus

The company also outlined other assets including Christina Lake, Foster Creek and Narrow Lake.

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