Athabasca Oil Corp. and Cenovus Energy Inc. have closed a previously announced deal creating a new joint venture stand-alone company called Duvernay Energy Corp.

The new Duvernay Energy is a privately held subsidiary of Athabasca that consolidates the two companies' assets in the prolific Kaybob Duvernay resource play in northwest Alberta.

Athabasca owns a 70 per cent equity interest in Duvernay Energy with Cenovus owning the remaining 30 per cent equity interest.

Athabasca Oil says current production from the Duvernay Energy assets is 2,000 barrels of oil equivalent per day, and the company expects to grow that to 6,000 barrels of oil equivalent per day in 2025.

The company says it has the potential to grow Duvernay Energy's production to 25,000 barrels of oil equivalent per day by the end of the decade.

Athabasca will manage Duvernay Energy through a management and operating services agreement.

This report by The Canadian Press was first published Feb. 6, 2024.