Calgary’s Cenovus to buy Huskey for $2.9 billion to create Canada’s No. 3 energy firm



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Calgary’s Cenovus to buy Huskey for $2.9 billion to create Canada’s No. 3 energy firm

In the latest flashpoint of a cascade of consolidations in the Northern American energy industry amid a multi-year low oil and natgas futures’ prices, Calgary-headquartered Canadian integrated oil and natgas firm Cenovus Energy Inc.

had issued a statement on Sunday saying that its management board had agreed to a takeover of rival Husky Energy Inc. at an all-stock $2.9 billion (C$3.8 billion) acquisition deal, cementing the pathway to create the third-largest Canadian oil and gas producer as a pandemic-led demand upheaval alongside weaker oil prices had been forcing a flurry of North American shale producers to dissolve their operators.

In point of fact, as a number of analysts had forecasted a near-drawdown of Northern American shale industry earlier this year amid a pandemic-led demand crunch alongside a likely output hike from the OPEC+ nations over the coming weeks, as the most-traded Northern American crude oil futures require at least $40 per barrel in order to remain profitable, while Saudi crude could weather a future price as low as $20 a barrel.

Besides, Kremlin said during the onset of a short-lived Saudi-Russ battle over oil price that it could grapple with a crude oil futures’ prices as low as $25 a barrel up to six years.

Cenovus to purchase Huskey as North American energy firms struggle

Given the scale of crude oil futures’ prices which the North American firms require to remain operational, a slew of big-league oil firms had either been diluted or merged over the recent months, as the latest Cenovus deal followed a bundle of big shale industry deal in the United States, while Texas oil giant ConocoPhillips had purchased rival Concho at a $9.7 billion deal and the San, Ramon, CA-headquartered American multinational energy titan Chevron Corp.

acquired Noble Energy at a $4.2 billion buyout deal. Meanwhile, expressing an out-and-out optimism over the recent Cenovus deal, the company President and Chief Executive Alex Pourbaix said to the reporters following announcement of the deal, “The diverse portfolio will enable us to deliver stable cash flow through price cycles.