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NuVista closes Pipestone gas, liquids asset buy from Cenovus

NuVista Energy Ltd. closed its acquisition of Cenovus Energy Inc.'s Pipestone natural gas and liquids assets in northwest Alberta.

The deal was part of NuVista's acquisition of oil and gas assets from Cenovus for C$625 million. NuVista also agreed to acquire Cenovus' Wembley natural gas and liquids business and a 39% stake in the Wembley gas plant. NuVista said the Pipestone assets averaged production of 10,300 barrels of oil equivalent per day in August.

NuVista partly funded the deal using proceeds from an offering of subscription receipts, which yielded gross proceeds of about C$384 million, according to a Sept. 6 news release. Upon deal closing, the subscription receipts were converted to one common share of Nuvista. The rest of the purchase price was paid using funds drawn from NuVista's credit facility.

NuVista plans to build a compressor station to accommodate production from the Pipestone assets. It is scheduled to start up in late 2019.

NuVista is an oil and gas producer with operations focused in the condensate-rich Montney formation in the Alberta Deep Basin of the Western Canadian Sedimentary Basin. Its fellow Canadian producer Cenovus operates in the oil sands of northern Alberta.