Athabasca Oil Corp. agreed to sell infrastructure assets to Enbridge Inc. (NYSE: ENB) in a C$265 million cash transaction that the Canadian energy company said Dec. 10 unlocks “tremendous value.”
The deal consists of Leismer pipelines and a Cheecham storage terminal serving the Leismer oil sands and Corner projects in Athabasca’s thermal oil business in Alberta.
Athabasca acquired the Leismer and Corner assets in 2017 in a transaction comprised of C$435 million cash plus stock and contingency payments. However, Athabasca said proceeds from its transaction with Enbridge will help the company more than recoup the cost of that acquisition.
Transaction proceeds are roughly 50% of Athabasca’s market capitalization and will be used to bolster the company’s liquidity, reduce net debt and improve financial resiliency, according to the company press release.
Athabasca said Enbridge has been a key partner across its thermal oil business and it will continue the company’s long-term strategic relationship with the pipeline operator following close of the transaction expected in first-quarter 2019.
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