Cenovus Energy completes debt offering
Cenovus Energy Inc., a company being created by EnCana Corp. splitting into two independent energy companies, has completed a private debt offering.
By OGJ editors
HOUSTON, Sept. 18 -- Cenovus Energy Inc., a company being created by EnCana Corp. splitting into two independent energy companies, has completed a private debt offering.
EnCana’s corporate reorganization is being implemented through a plan of arrangement that includes financing for Cenovus to support its independent business plan.
The $3.5 billion private debt offering involves three tranches of which $800 million is due on Sept. 15, 2014, $1.3 billion is due on Oct. 15, 2019, and $1.4 billion is due on Nov. 15, 2039.
The split transaction, expected to close Nov. 30, is designed to enhance value for EnCana and Cenovus shareholders by creating two independent publicly traded companies, EnCana executives said.
Cenovus will be a fully integrated oil company with in-situ oil sands properties, refineries, and an underlying foundation of oil and gas resource plays (OGJ, May 19, 2008, p. 33).
EnCana announced the corporate reorganization in May 2008 but delayed seeking shareholder and court approval for the split because of a global economic downturn.
Randy Eresman, EnCana president and chief executive officer, on Sept. 10 said the company was proceeding with the split because debt and equity markets had improved.
Regarding gas prices, Eresman believes current low gas prices are unsustainable. “We expect a recovery in prices in 2010,” he said.