Canada's Cenovus Energy Inc. (NYSE: CVE) has reached an agreement to sell its Suffield oil and gas assets for C$512 million (US$416 million) to International Petroleum Corp., striking its second deal this month as it pushes ahead with its debt reduction plan.

Calgary, Alberta-based Cenovus said Sept. 25 proceeds from the sale will be used to cut the C$3.6 billion in debt it took on to buy oil sands assets from ConocoPhillips Co. (NYSE: COP) this year. Cenovus is targeting C$5 billion from asset sales to pay down the debt and so far it has announced C$1.5 billion in divestitures, including the latest sale.

Cenovus shares rose as much as 3.9% to C$13.18 in early morning trade Sept. 25, before retreating to C$12.71 by late morning. The benchmark Canada share index was flat.

Analysts said the price tag for Suffield was within estimates, and that while the sale was positive for the company, other assets for sale may not be as attractive to buyers.

"On balance, we continue to recommend investors take a cautious stance toward the broader asset sale process for Cenovus," said Raymond James analyst Chris Cox, adding that other sales may "disappoint to the downside."

The C$16.8 billion ConocoPhillips deal effectively doubled Cenovus' producing assets, but dented its pristine balance sheet and sent Cenovus shares tumbling. It prompted some investors to revolt and resulted in the resignation of CEO Brian Ferguson.

International Petroleum, a spinoff of Norway's Lundin Petroleum AB, said the acquisition more than triples its production and reserves. Its shares jumped 6.5% to C$5.22.

Earlier this month, Cenovus agreed to sell its Pelican Lake heavy oil operations in Alberta for C$975 million to Canadian Natural Resources Ltd. (NYSE: CNQ).

Other assets Cenovus plans to sell include the company's Weyburn and Palliser oil assets, which it hopes to announce by the end of the year. It may also sell some of the Deep Basin natural gas assets that it acquired from ConocoPhillips.

Reuters reported in July the company hopes to raise as much as C$2.5 billion by selling Weyburn and Palliser oil assets, in-line with analysts' valuations.

Desjardins analyst Justin Bouchard said Deep Basin's infrastructure assets could be sold for up to C$1.5 billion, helping the company meet or even surpass its divestiture target. (US$1 = C$1.2316)