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by Stockwatch Business Reporter

West Texas Intermediate crude for June delivery lost 39 cents to $49.23 on the New York Merc, while Brent for June lost 36 cents to $51.60 (all figures in this para U.S.). Western Canadian Select traded at a discount of $10.35 to WTI ($38.88), up from a discount of $10.45. Natural gas for May lost three cents to $3.07. The TSX energy index lost a fraction to close at 196.81.

Cenovus Energy Inc. (CVE) edged down three cents to $14.15 on 5.86 million shares. On Friday, it held a conference call with analysts to promote its planned $17.7-billion asset acquisition from ConocoPhillips. The acquisition includes assets in Cenovus's core area, the oil sands, as well as assets in a relatively unfamiliar area, the Deep basin. The deal will roughly double Cenovus's production to around 588,000 barrels of oil equivalent a day. Cenovus expects to close the acquisition this quarter.

Investors remain leery of the acquisition, having sent the stock down toward $14 from nearly $17.50 since the deal was announced on March 29. Management stayed upbeat during Friday's conference call on Friday. Scotia Capital analyst Jason Bouvier, summarizing the call in a research note this morning, said management emphasized the expected "material FCF [free cash flow] growth" from the acquisition. Specifically, Cenovus reckons that its free cash flow will double. Mr. Bouvier sees this as possible, but figures that Cenovus will first have to accomplish its previously stated goal of selling conventional assets in Alberta, as these have higher sustaining costs than the new assets to be acquired from ConocoPhillips. Cenovus is planning to sell the conventional assets over the next six to 12 months. Once the sales are finished, added Mr. Bouvier, Cenovus plans to "revisit" its dividend. The company currently pays a five-cent quarterly dividend that yields 1.4 per cent.

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