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UPDATE 2-Cenovus to offload Palliser assets for C$1.3 bln, pay down debt

(Adds details on Palliser sale, background on ConocoPhillips deal, analyst comment)

Oct 19 (Reuters) - Canada's Cenovus Energy said on Thursday it would sell its Palliser crude oil and natural gas assets in southeastern Alberta to Torxen Energy and Schlumberger Ltd for C$1.3 billion ($1.04 billion) in cash to lower debt.

The Calgary, Alberta-based company is using the cash to pay down a C$3.6 billion bridge loan it took to fund its $13.3 billion deal to buy oil sands and natural gas assets from ConocoPhillips.

Cenovus' ConocoPhillips deal more than doubled production to 588,000 barrels of oil equivalent per day, making Cenovus the third-biggest Canadian producer. But it also made Cenovus a highly leveraged company.

Cenovus has since been looking to offload parts of its portfolio to pay off the debt related to the deal, which sent its shares tumbling and led to the resignation of CEO Brian Ferguson.

Thursday's sale will close in the fourth quarter of this year, the company said.

The deal value fell right in the middle of the expected C$1.1 billion-C$1.5 billion range, RBC Capital Markets analyst Greg Pardy said in a client note.

With the Palliser sale, Cenovus' total gross proceeds to date comes to about C$2.8 billion.

Cenovus continues to target between C$4 billion and C$5 billion in asset sale agreements by the end of the year, Ferguson, who is set to leave later this month, said on Thursday.

Last month, the company sold off its Pelican Lake heavy oil operations in Alberta for C$975 million to Canadian Natural Resources Ltd and followed that up with a C$512 million deal to sell its Suffield oil and gas assets to International Petroleum Corp.

Cenovus shares closed at C$12.22 Wednesday on the Toronto Stock Exchange.

($1 = 1.2465 Canadian dollars) (Reporting by Karan Nagarkatti and Nivedita Bhattacharjee; Editing by Savio D'Souza and Martina D'Couto)