Credit: Shutterstock photoCanadian oil company, Cenovus Energy Inc.CVE has acquired Canexus Corporation's North American Terminal Operations (NATO), a crude-by-rail trans-loading facility in central Alberta. The acquisition is part of Cenovus' strategy to build a strong portfolio of transportation options to maximize market access and capture global prices for its oil.
The company also contracted Savage to work with its on-site management team in day-to-day operations of this renamed Bruderheim Energy Terminal. Savage is a leading provider of rail transportation and terminal operations in the U.S. and Canada.
Located approximately 50 kilometres northeast of Edmonton in Bruderheim, Alberta, the terminal has strategic value for Cenovus owing to its accessibility to the Cold Lake and Access crude oil pipeline systems as well as its links to the Canadian Pacific and Canadian National rail lines. Cenovus, which began moving its oil through the facility in 2014, currently transports crude oil production volumes from its Foster Creek steam-assisted gravity drainage (SAGD) operation to Bruderheim on the Cold Lake pipeline.
The company sees potential to expand the acquired facility at a relatively low cost. Additionally, there is undeveloped land included in the transaction that provides significant potential as Cenovus evaluates a number of possible value-added projects.
Headquartered in Calgary, Alberta, Cenovus is an integrated oil company with ownership interest in two high-quality refineries in Illinois and Texas. Cenovus' operations include increasing oil projects and growing natural gas and crude oil production in Alberta and Saskatchewan.
Cenovus enjoys the benefits of industry-leading oil sands' assets that position it for long-term growth. We believe that the company will remain focused on enhancing its operational efficiency throughout 2015.
Cenovus continues to make solid progress improving cost structures across the entire company to lower its spend and create sustainable cost improvements. The company previously announced a target of $200 million in upstream operating, capital and general & administrative cost savings for 2015, which were largely achieved within the first six months of the year. As a result, the company recently increased its cost-cutting projection for 2015 to approximately $280 million, which is 40% higher than its initial target.
Currently, Cenovus carries a Zacks Rank #3 (Hold). Some better-ranked players from the sector are Alon USA Partners, LP ALDW , Braskem S.A. BAK and Mitcham Industries Inc. MIND . Each of these stocks carries a Zacks Rank #1 (Strong Buy).
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CENOVUS ENERGY (CVE): Free Stock Analysis Report
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ALON USA PTNRS (ALDW): Free Stock Analysis Report
MITCHAM INDS (MIND): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
