Cenovus, Suncor double down on oilsands in fresh burst of dealmaking

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeCommoditiesEnergyOil & GasNewsCenovus, Suncor double down on oilsands in fresh burst of dealmakingTighten their grip on northern Alberta in back-to-back announcementsLast updated 30 minutes ago Cenovus Energy CEO Jon McKenzie speaks at the Global Energy Show at the BMO Centre in Calgary on Tuesday, June 9, 2026. McKenzie said Oct. 5, 2026, that the deal for Athabasca "is a natural extension of our oilsands strategy." Photo by Gavin Young /PostmediaTwo of Canada’s biggest oilsands producers tightened their grip on northern Alberta in back-to-back announcements, with Cenovus Energy Inc. agreeing to buy Athabasca Oil Corp. and Suncor Energy Inc. selling a group of East Coast offshore assets. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountCenovus said Monday it will pay $12 per share in cash and stock for Athabasca, in a deal valued at $5.7 billion including debt. This advertisement has not loaded yet, but your article continues below.A day earlier, Suncor said it is selling stakes in three offshore Newfoundland projects for $1.2 billion to U.K. North Sea producer Ithaca Energy PLC and raising its share buybacks by 50 per cent. Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againBoth Calgary-based companies cast the moves as a sharper focus on the oilsands. “This transaction strengthens our position in one of the world’s premier oil-producing regions and is a natural extension of our oilsands strategy,” Cenovus chief executive Jon McKenzie said in a statement. Suncor chief executive Rich Kruger said his company is “aligning our portfolio around our competitive advantages,” underpinned by “large-scale, long-life oilsands resources.” Cenovus shares fell as much as five per cent before paring losses to $44.59, down 3.6 per cent, in mid-morning trading in Toronto, as investors weighed the deal’s impact on the company’s debt. Athabasca shares jumped 15 per cent to $12.14, slightly above the offer price. Suncor shares were little changed at $98.81. The stock is up 66 per cent this year and is trading near its 52-week high of $100.24. Shares of Ithaca rose about three per cent in London. This advertisement has not loaded yet, but your article continues below.Cenovus’ Athabasca acquisition adds about 45,000 barrels of oil equivalent per day of production, including thermal oilsands output near Cenovus’s existing Christina Lake, May River and Thornbury assets. Cenovus said Athabasca’s Leismer and Corner properties hold more than 75 years of proved and probable reserves. It is also forecasting about $85 million a year in corporate and commercial synergies, most of it in the first full year after closing, which could include employee layoffs, The purchase will temporarily push Cenovus’s debt above its own $4-billion target. Net debt was about $3 billion at the end of the third quarter, and the company expects it to reach roughly $5 billion by year-end, assuming the maximum cash payout. Athabasca chief executive Rob Broen said the deal lets shareholders “realize substantial value today” while keeping a stake in future gains through Cenovus stock. The deal is not purely an oilsands play. It also gives Cenovus full ownership of Duvernay Energy Corp., an oil-weighted producer in Alberta’s Duvernay shale region which produces 45,000 barrels of oil equivalent. This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Both boards have unanimously approved the transaction, which still needs approval from Athabasca shareholders and regulators. Cenovus expects the deal to close in December. Analysts point out Cenovus is paying a steep price to acquire Athabasca. To Randy Ollenberger at BMO Capital Markets, however, the price looks more modest if Cenovus delivers on its growth plans. The deal is Cenovus’ second oilsands purchase in less than a year. Last November, the company closed its $8.6-billion purchase of MEG Energy Corp. after a bidding war with Strathcona Resources Ltd. On that deal, the company’s net debt climbed to $8.3-billion. And after a year of paying down the MEG purchase, Cenovus’ debt levels prior to the Athabasca deal were below its target of $4 billion. The degree to which Cenovus is using debt financing to acquire Athabasca revives memories of another transformative oilsands purchase by the company. In March 2017, it agreed to pay $17.7 billion for ConocoPhillips’ 50 per cent stake in the Foster Creek and Christina Lake projects, along with Deep Basin natural gas assets. This advertisement has not loaded yet, but your article continues below.The acquisition doubled production and reserves, but investors balked at the price and the debt. The shares lost roughly half their value over the following months, and then-chief executive Brian Ferguson announced his retirement that June. Suncor, meanwhile, on Monday said it is selling its 48 per cent stake in Terra Nova, 40 per cent stake in White Rose and 38.6 per cent stake in West White Rose. Each asset is located approximately 350 kilometres southeast of Newfoundland in the Atlantic Ocean. The deal includes a contingent payment of up to $350 million tied to future oil prices, which could bring the total to $1.55 billion. “They are selling the assets because they’re non-core, and they’ve said for a while that they would sell them,” Ollenberger said in an interview. “Investors should like the sale. The proceeds are being returned to shareholders through the buyback.” Suncor said it will raise share repurchases to $750 million a month from $500 million starting in October, an annualized pace of $9 billion. The company is not leaving the East Coast entirely, as it will keep its interests in the Hebron and Hibernia offshore projects both of which are located close to the assets the company is divesting. This advertisement has not loaded yet, but your article continues below.For Ithaca, the deal is its first acquisition outside the United Kingdom. It intends to take over as operator of Terra Nova, while the White Rose interests are non-operated, leaving it as a partner to Cenovus, which operates that project. The sale ends Suncor’s role as operator of a project that has tested its patience. Terra Nova was shut down by the Canada-Newfoundland and Labrador Offshore Petroleum Board in December 2019 over safety equipment deficiencies and did not pump oil again for nearly four years, after a life-extension refit in Spain ran well behind schedule. The transaction is expected to close in early 2027. This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.