ConocoPhillips, an American multinational energy corporation is preparing its way to unload its stake in Cenovus Energy Inc. Last year, it had acquired these shares as a part of an asset to the Canadian oil and gas producer.
Based on the ConocoPhillips share price, its stake in Cenovus is worth a staggering $2.1 billion, leading it to be one of the biggest Canadian equity share sales of this year.
Based on the previous reports, ConocoPhillips has sold $17 billion in assests by taking 208 million shares of Cenovus and C$14. Initially,1 billion of cash had led to dysfunction Canada’s largest oil sand companies. Now, with the Cenovus falling over to almost 8.8 percent, the shares have closed down to 5.7 percent at C$12. 67. The deal has made ConocoPhillips the biggest investor in the Calgary.
The investment banks and the U.S energy company have recently held a discussion about appointing advisers for sales and are ready to offer shares to institutional investors as early as this month. The story has suggested that the move follows a similar overnight stock sale by Royal Dutch Shell Plc, which had sold its entire stake in Canadian Natural Resources for $3.3 billion last month.
During the deal of 2017, ConocoPhillips valued its Cenovus stake at $9.41 per share, based on the Cenovus’ New York listed stock. Afterwards, the transaction closed and the share price went high and low.
The overnight trades were discounted from the current share price levels in order to encourage the investors. However, to make the sale worthwhile, Conoco would need Cenovus’s value to be at a point where even after providing a discount, it will be making money.
Conoco has also seized in international assets that are controlled by Venezuelan state controlled oil producer PDVSA by moving aggressively to get cash.
The company’s fresh cash, which was gathered in has gone back to shareholders, with the company’s dividend up by 8 percent in the first quarter to 28 cents, plus a plan of buying back the $2 billion in shares.