Shares in Cenovus Energy were down 11 per cent shortly after markets opened Thursday following its announcement to acquire Canadian assets belonging to Houston-based ConocoPhillips.
Under the C$17.7 billion deal, the Calgary-based energy company would take over most of ConocoPhillips’s investments in Canada in what is the latest mega oilsands sale by a major foreign oil and gas producer.
The ConocoPhillips sale was announced Wednesday after the close of Canadian and U.S. stock markets, when Cenovus stock was at C$17.45 in Toronto and ConocoPhillips stock was at US$45.95 in New York.
At just after 10 a.m. ET on Thursday, Cenovus stock was trading at C$15.53 on the Toronto Stock Exchange.
ConocoPhillips’s New York-listed shares were trading at US$48.75, up US$2.80 or about six per cent.
Cenovus plans to raise C$3 billion in an offering of shares to help pay for the acquisition, supplemented by cash on hand and debt financing.
The company would also sell conventional assets to raise money to reduce debt.
The DBRS credit rating agency said Wednesday it would place Cenovus’s ratings under review with negative implications because of the increase in debt from the ConocoPhillips deal.
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