Cenovus sells royalty business for $3.3 billion

Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gross cash proceeds of $3.3 billion. HRP holds 4.8 million gross acres of royalty interest and mineral fee title lands in Alberta, Saskatchewan, and Manitoba.

In this year’s first quarter, Heritage Royalty had associated third-party royalty interest volumes of 7,800 boe/d. Additional royalties have also been added: a royalty on Cenovus’s working interest production with implied first-quarter volumes of 5,400 boe/d and a gross overriding royalty on Cenovus’s Pelican Lake heavy oil property in northern Alberta and its enhanced oil recovery project in Weyburn, Sask., with implied first quarter volumes of 1,600 boe/d.

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