Canadian oil company Cenovus Energy has revealed its target to raise C$4-5bn ($3-3.8bn) by the year end through sale of its non-core assets, to fund ConocoPhillips acquisition.

The sale proceeds are likely to more than meet the C$3.6bn ($2.7bn) asset sale bridge facility used to fund the C$17.7bn ($13.3bn) acquisition of significant stakes in the Canadian oil and gas assets of ConocoPhillips.

Cenovus has tabled a five-year plan to increase free funds flow by 14% a year through 2021 at a West Texas Intermediate (WTI) price of $55 per barrel (bbl).

It also plans to boost its production at a compound annual growth rate of 6%, while reducing its debt.

Cenovus president & CEO Brian Ferguson said: “We’ve had significant interest in our assets by a variety of potential purchasers and we’re confident we can achieve our divestiture target.

“Reducing our debt position is our number one priority and we remain committed to strengthening our balance sheet and maintaining investment grade credit ratings. By taking these actions, we believe we’re poised to deliver significant value to shareholders over the coming years.”

Cenovus’ five-year plan calls for disciplined capital investment to sustain its present oil sands production. It also wants an increase in production from expansion phase G project at Christina Lake and also in the recently acquired Deep Basin assets from ConocoPhillips.

In the course of the next three years, Cenovus will be looking to generate savings of C$1bn ($750m) by cutting down on the costs incurred on cumulative capital, operating and general and administrative fronts.

For the rest of the year, the Canadian firm has lined up sale of its Pelican Lake and Suffield assets. It is currently preparing data rooms for the Palliser asset in southern Alberta and the southern Saskatchewan-located Weyburn CO2 enhanced oil operation.

All the four assets are likely to see a combined production of nearly 112,000 BOE/d in the current year.

Image: Cenovus plans to increase production from the Christina Lake oil sands project in Canada. Photo: courtesy of Cenovus Energy Inc.