Cenovus Energy Inc (TSX:CVE) announced on Tuesday an agreement to sell its 50% interest in WRB Refining LP (WRB) to its joint venture partner Phillips 66.
Cenovus will receive US$1.4 billion in cash, or about C$1.9 billion.
“After the sale of WRB, our downstream business will be more focused, comprised of assets we control, which provide physical integration and egress for our leading upstream heavy oil business,” Cenovus Energy CEO Jon McKenzie said in a statement.
“The proceeds from this transaction will allow us to accelerate shareholder returns over the near term.”
The Canada-based integrated energy company noted that proceeds from the sale will be used to reduce its net debt and to accelerate returns to shareholders in the form of further share repurchases.
The WRB joint venture includes the Wood River Refinery in Illinois and the Borger Refinery in Texas, which have combined crude throughput capacity of 495,000 barrels per day (bbls/d), of which Cenovus received 247,500 bbls/d.
The deal is expected to close around the end of the third quarter.
Cenovus Energy shares rose nearly 3% to C$22.73 in midday trading on Tuesday.