CALGARY, Alberta, April 23 Canada's Cenovus
Energy Inc has said it may sell parts of the Deep Basin
natural gas assets it recently bought from Houston-based
ConocoPhillips, Royal Bank of Canada (RBC) analysts
wrote in a research note on Sunday.
Cenovus Chief Executive Brian Ferguson held a conference
call with analysts last Friday, and the oil company "signaled
that it would also be open to potentially monetizing some
portion of the Deep Basin midstream assets," according to the
"Cenovus has had seven inbound calls from CEOs of various
energy companies looking to ensure the company is aware of their
interest in certain Deep Basin assets," the analysts wrote.
RBC acted as an advisor for Cenovus for the ConocoPhillips
Cenovus did not immediately respond to a request for
The C$17.7-billion ($13.3-billion) acquisition last month of
ConocoPhillips oil and gas assets effectively doubles the size
of Cenovus. But the deal dents the company's pristine balance
sheet and saddles the pure-play crude producer with Deep Basin
natural gas assets that some investors and analysts have said it
has no business holding.
Cenovus shares crashed last month in their biggest
single-day drop on news of the deal, which is to be funded
through debt and selling shares and what the company deems to be
"Select assets within the Deep Basin could be tagged as
non-core," according to the RBC note. "This was new to us and
opens up interesting de-leveraging possibilities for Cenovus."
While the company had wanted to raise C$3.6 billion through
asset sales, it may end up raising more, according to the note.
(Reporting by Ethan Lou in Calgary, Alberta; Editing by Chris