Cenovus Energy (CVE) is exploring a potential sale of its conventional oil and gas assets in Alberta’s Deep Basin, according to a recent Reuters report, as the company looks to reduce debt following its acquisition of MEG Energy.
Sources indicate Cenovus has contacted potential buyers in recent weeks to gauge interest in the asset package, which could be valued at approximately C$3 billion. The process remains at an early stage, and the company may ultimately choose to retain the assets.
The potential divestment follows Cenovus’ C$8.5 billion takeover of MEG Energy, completed in November, which added the high-quality Christina Lake oil sands project to its portfolio. While strategically attractive, the transaction significantly increased leverage. Cenovus’ net debt is estimated to have risen to roughly C$10.7 billion, after assuming MEG’s outstanding debt and drawing on acquisition financing.
A Deep Basin sale would mark a clear step in Cenovus’ ongoing portfolio simplification strategy. The company has increasingly emphasized long-life, low-decline oil sands assets that deliver stable free cash flow and reduced reinvestment risk, compared with conventional drilling programs that require continuous capital to sustain production.
For potential buyers, the Deep Basin assets remain attractive. The region offers established infrastructure, strong natural gas exposure, and sizeable remaining inventory, making it well suited for mid-sized operators, private equity-backed producers, or gas-focused consolidators seeking scale.
If completed, the transaction would further reinforce a broader trend across Canada’s upstream sector: large producers concentrating on core assets, strengthening balance sheets after major acquisitions, and reallocating capital toward projects with long-duration cash flow.
While no formal sale process has been announced, Cenovus’ review highlights how post-merger cleanup and capital discipline continue to shape strategic decisions across the Canadian energy landscape.
