Cenovus Energy shares fell more than 10 per cent in early trading on Tuesday after the oil company announced plans for more asset sales, deeper cost cutting and the coming retirement of CEO Brian Ferguson.
After 30 minutes of trading, Cenovus stock was at $9.20, down 10.5 per cent from Monday’s close and down almost 47 per cent since it announced in late March a $17.7 billion blockbuster deal buy assets from ConocoPhillips.
Cenovus has been criticized for paying so much for the ConocoPhillips oilsands and conventional assets but Ferguson and other senior executives have staunchly defended the deal.
The 60-year-old Ferguson, who will be retiring as CEO and from the board of directors on Oct. 31, plans to stay as an adviser until the end of March. He has led Calgary-based Cenovus since its launch as an independent public company in late 2009.
Its focus since splitting from Encana (TSX:ECA), where Ferguson was the chief financial officer, has been on conventional and oilsands production in Western Canada, with investments in two U.S. refineries.
Cenovus says it’s working towards selling between $4 billion and $5 billion of assets, an increase from previous plans to raise at least $3.6 billion through dispositions by the end of the year.
It now aims to sell its entire legacy non-oilsands portfolio including Pelican Lake, Suffield, Weyburn and Palliser which together produce about 112,000 barrels of oil equivalent per day.
Cenovus says it’s also aiming to cut up to an additional $1 billion in costs over the next three years.
About half of the savings are expected from efficiencies from its increased size and redesigned drilling techniques.
It’s also aiming for about $375 million of savings from general and administrative expenses, including from an optimized workforce.