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Energy Summary for April 7, 2017

2017-04-07 20:26 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for May delivery added 54 cents to $52.24 on the New York Merc, while Brent for June added 35 cents to $55.24 (all figures in this para U.S.). Western Canadian Select traded at a discount of $11.40 to WTI ($40.84), unchanged. Natural gas for May lost seven cents to $3.26. The TSX energy index lost 1.51 points to close at 201.91.

Cenovus Energy Inc. (CVE) lost 35 cents to $14.74 on 39.5 million shares, despite touting "key acquisition financing milestones" related to its planned $17.7-billion purchase of assets from ConocoPhillips. The assets are in the familiar oil sands and the unfamiliar Deep basin. Yesterday, Cenovus closed a bought deal of 187.5 million shares at $16 for proceeds of $3-billion, which will go toward the $14.1-billion cash portion of the purchase price. The rest of the purchase price will be satisfied through the issuance of 208 million shares to ConocoPhillips. All told, to complete the acquisition, Cenovus will dilute its share count by nearly 50 per cent, to 1.22 billion from 833 million. It will also take on considerable debt. These factors, as well as the unexpected move into the Deep basin, have helped send Cenovus's stock down to $14.74 from nearly $17.50 before the acquisition was announced.

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