The CEO of Cenovus Energy (TSX:CVE) says his company plans to accelerate drilling of conventional gas wells on lands it's buying from ConocoPhillips through a $17.7-billion deal announced last month.
Brian Ferguson says the Calgary-based company will increase spending to $650 million in 2019 to drill about 120 wells on the land in northeastern B.C. and northwestern Alberta.
That's more than five times higher than ConocoPhillips' plan to spend $120 million this year to drill 24 wells.
Ferguson says the drilling will bring on new production to better utilize ConocoPhillips gas plants and pipelines that are only being employed at about 40 per cent of capacity, thus improving the economic return on the play.
He says spending is expected to climb this year to $170 million and next year to $350 million.
The deal, expected to close before June 30, also includes ConocoPhillips' 50 per cent interest in an oilsands venture between the two companies in northern Alberta.