Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) responded to extreme oil
price volatility in 2020 by quickly reducing capital spending as
well as strategically managing oil sands production and purchasing
curtailment credits to achieve increased output when prices were
more favourable. The company generated positive free funds flow in
the fourth quarter, partially offsetting the impact of low oil
prices on its full-year results. Cenovus’s planned combination with
Husky Energy, announced in the fourth quarter, closed January 1,
2021. The company exited 2020 with net debt of $7.2 billion.
“In a year of unprecedented challenges for our industry, we
demonstrated the flexibility, strength and reliability of our
operations by adapting our capital and operating plans, including
leveraging the dynamic storage capabilities of our oil sands
reservoirs, transportation optionality and marketing activities to
help preserve liquidity,” said Alex Pourbaix, Cenovus President
& Chief Executive Officer. “We believe our compelling
combination with Husky will provide even greater ability to
reduce free funds flow volatility and accelerate debt
reduction and returns to shareholders.”
Cenovus released its 2021 budget in late January. The budget
includes sustaining capital of approximately $2.1 billion to
deliver upstream production of approximately 755,000 barrels of oil
equivalent per day (BOE/d) and downstream throughput of
approximately 525,000 barrels per day (bbls/d). The company also
expects to achieve nearly $1 billion of synergies this year as a
result of the recent transaction with Husky, putting Cenovus firmly
on track to reach its planned $1.2 billion in annual run-rate
synergies by the end of 2021.
Financial & production summary |
(for the period ended December 31) |
2020Q4 |
2019Q4 |
% change |
2020Full year |
2019Full year |
% change |
Financial ($ millions, except per share amounts) |
|
|
|
|
|
Cash from
(used in) operating activities |
250 |
740 |
-66 |
273 |
3,285 |
-92 |
Adjusted
funds flow1, 2 |
341 |
687 |
-50 |
147 |
3,702 |
-96 |
Per share diluted |
0.28 |
0.56 |
|
0.12 |
3.01 |
|
Free funds
flow1, 2 |
99 |
370 |
-73 |
-694 |
2,526 |
|
Operating
earnings (loss)1 |
-551 |
-164 |
|
-2,604 |
456 |
|
Per share diluted |
-0.45 |
-0.13 |
|
-2.12 |
0.37 |
|
Net earnings
(loss) |
-153 |
113 |
|
-2,379 |
2,194 |
|
Per share diluted |
-0.12 |
0.09 |
|
-1.94 |
1.78 |
|
Capital investment |
242 |
317 |
-24 |
841 |
1,176 |
-28 |
|
|
|
|
|
|
Production (before royalties) |
|
|
|
|
|
Oil sands (bbls/d) |
380,693 |
374,132 |
2 |
381,723 |
354,257 |
8 |
Conventional liquids3 (bbls/d) |
24,587 |
26,197 |
-6 |
26,757 |
26,673 |
|
Total liquids3
(bbls/d) |
405,280 |
400,329 |
1 |
408,480 |
380,930 |
7 |
Total natural gas (MMcf/d) |
369 |
403 |
-8 |
379 |
424 |
-11 |
Total production (BOE/d) |
467,202 |
467,448 |
|
471,740 |
451,680 |
4 |
1 Adjusted funds flow, free funds flow and operating
earnings/loss are non-GAAP measures. See Advisory. 2 The prior
period has been reclassified to conform with the current period
treatment of non-cash inventory write-downs.3 Includes oil and
natural gas liquids (NGLs).
Health and safety performance
In response to the COVID-19 pandemic in 2020, Cenovus moved to
essential staffing at its field sites and gave office staff the
flexibility to work remotely, followed by mandatory work-from-home
measures for its office staff based on evolving guidance from
public health officials. The company also established comprehensive
COVID-19 protocols, including enhanced cleaning and physical
distancing measures. Staffing levels have now largely returned to
normal at Cenovus’s field operations and the company continues to
evolve COVID-19 measures at all its worksites based on the
direction of government, public health officials and the company’s
internal health and safety experts.
In 2020, Cenovus continued to deliver industry-leading safety
performance through its culture of continuous improvement and focus
on risk management and asset integrity. The company achieved
year-over-year improvements at its operations for significant
incident frequency (SIF) and process safety events. The company
recorded a SIF of 0.01 compared with 0.14 in the previous year and
two process safety events compared with eight in 2019.
Business flexibility and financial
discipline
With significantly reduced global oil demand due to the COVID-19
pandemic, benchmark oil prices faced unprecedented volatility in
2020, resulting in the company’s average realized crude oil sales
price of $28.82 per barrel (bbl) compared with $53.95/bbl the
previous year.
To preserve its financial resilience, in March and April Cenovus
reduced its planned 2020 capital spending by a total of about 43%.
Anticipating the beginning of a recovery in commodity prices during
the second quarter, the company proactively acquired curtailment
credits to increase output above the Government of Alberta’s
mandatory production limits and leveraged the flexibility of its
business to ramp production back up. This included reaching peak
production rates at the company’s oil sands operations in June and
restarting its crude-by-rail program to maximize cash flows in
response to tighter Alberta light-heavy oil differentials and the
further strengthening of commodity prices later in the year.
Financial results
Cenovus recorded cash from operating activities of $273 million
in 2020 compared with $3.3 billion in 2019. The company generated
full-year adjusted funds flow of $147 million compared with $3.7
billion a year earlier. It reported a free funds flow shortfall of
$694 million in 2020, largely driven by the collapse in crude oil
prices, compared with free funds flow of $2.5 billion in 2019.
Cenovus generated free funds flow of $99 million in the fourth
quarter of 2020, which included a $100 million ($0.08 per share)
non-cash provision related to the Keystone XL pipeline project.
The company had a full-year operating loss of $2.6 billion and a
net loss of $2.4 billion compared with operating earnings of $456
million and net earnings of $2.2 billion in 2019. The operating
loss was due, in part, to higher depreciation, depletion, and
amortization (DD&A) that included impairment charges of $555
million in the Conventional business due to lower forward commodity
prices and changes to future development plans as well as an
impairment charge of $450 million associated with the Borger
Refinery, which the company co-owns with the operator, Phillips 66.
In the fourth-quarter of 2020 compared with the same period a year
earlier, Cenovus had an operating loss of $551 million compared
with an operating loss of $164 million and a net loss of $153
million compared with net earnings of $113 million.
Cenovus exited 2020 with net debt of $7.2 billion and $4.5
billion of available committed credit facilities. Following the
close of the Husky transaction on January 1, 2021, the company had
net debt of approximately $13.1 billion, including the fair
valuation of Husky’s debt upon close, as well as $8.2 billion in
available committed credit facilities with no maturities on its
long-term bonds until April 2022.Following the completion of the
transaction with Husky, Cenovus received credit rating upgrades.
Moody’s Investors Service upgraded Cenovus to investment grade Baa3
with a ‘negative’ outlook from Ba2 with a ‘negative’ outlook, while
DBRS Limited upgraded the company to BBB from BBB (low), with a
‘stable’ trend. At S&P Global Ratings, Cenovus’s BBB- rating
was confirmed and the outlook revised to ‘stable’ from ‘negative’.
Fitch Ratings maintained its BB+ rating with a return to a
‘positive’ outlook.
Operating highlights
Cenovus’s upstream and refining assets continued to deliver safe
and reliable operational performance throughout 2020. Planned
maintenance and repair work at the company’s oil sands operations
partially offset production increases. Cenovus expanded the
original planned scope for its Conventional drilling program, while
remaining within the range of its reduced 2020 budget. The
company’s refining assets ran at reduced crude oil run rates due to
lower refined product demand and pricing resulting from the
COVID-19 pandemic.
Oil sands
In 2020, Cenovus achieved average oil sands production of
381,723 bbls/d for the year, up 8% from 354,257 bbls/d in 2019 when
Cenovus volumes were reduced to match limits under the Government
of Alberta’s curtailment program. Fourth quarter production
increased 2% to 380,693 bbls/d from the same period a year earlier
as the company purchased production curtailment credits to produce
above the government’s output limits before mandatory curtailment
ended in early December.
Oil sands operating margin declined in 2020 to $1.1 billion from
$3.5 billion in 2019, largely due to lower average realized crude
oil sales prices, the use of higher priced condensate when the
market was declining early in the year and realized risk management
losses of $268 million compared with $23 million in 2019.
Non-fuel per-unit operating costs in 2020 declined 13% at
Christina Lake and 4% at Foster Creek compared with 2019. Combined
full-year oil sands per-unit operating costs were $7.84/bbl, down
4% from the previous year. The year-over-year reduction in
per-barrel costs was primarily due to increased volumes, lower
turnaround costs at Christina Lake in 2020 compared with the
previous year and reduced repairs and maintenance activity at
Foster Creek with the implementation of COVID-19 safety measures
that limited site personnel numbers to help curb potential spread
of the virus. Total oil sands per-unit operating costs were
$8.70/bbl in the fourth quarter, up 8% from the same quarter in
2019, driven largely by higher natural gas prices and increased
repairs and maintenance costs, primarily related to a planned
turnaround at Christina Lake and planned maintenance and
operational outages at Foster Creek.
After suspending its crude-by-rail program in early 2020,
Cenovus ramped up activity in the fourth quarter to take advantage
of improving market conditions. With resumption of the rail
program, Cenovus exited December with average loading of nearly
28,000 bbls/d of its own crude oil for transport by rail for the
month plus nearly 10,000 bbls/d for third parties. For the full
year, the company loaded an average of more than 30,000 bbls/d of
which more than 29,000 bbls/d were Cenovus volumes.
Cenovus’s oil sands facilities continue to operate at
industry-leading steam-to-oil ratios (SORs). At Christina Lake, the
full-year 2020 SOR was approximately 2.0, unchanged from 2019. The
SOR at Foster Creek was 2.8, consistent with the previous year. The
company continues to optimize steam use across its oil sands
operations to minimize SORs and greenhouse gas emissions intensity
through continuous improvement in operational practices and the
application of technology.
Conventional
Conventional production averaged 89,932 BOE/d in
2020, an 8% decrease from full-year 2019. The year-over-year
decrease was due to natural declines from reduced capital
investment, partially offset by production from the Marten Hills
heavy oil asset. Cenovus successfully divested Marten Hills in the
fourth quarter of 2020 and has maintained an interest in the asset
through its investment in Headwater Exploration Inc., which
acquired the property, as well as a gross overriding royalty that
allows Cenovus to benefit from future development.
Cenovus increased capital investment for Conventional by $30
million in the fourth quarter, relative to its revised 2020
guidance issued in April, to conduct a two-rig drilling program.
The program is targeting low-risk, high-return development wells
near natural gas plants owned and operated by the company, to take
advantage of higher commodity prices during the winter heating
season. Notwithstanding the increase, full-year capital investment
in the company’s Conventional segment of $78 million was 24% lower
than in 2019, primarily due to reduced expenditures for facilities
as well as lower overall drilling and completions. The company
continues to take a disciplined approach to the development of its
Conventional assets.
Total Conventional operating costs decreased 6% to $318 million
in 2020 compared with 2019. Per-barrel operating costs averaged
$8.99/BOE compared with $8.79/BOE in 2019, primarily due to an 8%
decrease in sales volumes, partially offset by optimizing
operations, focusing on critical repairs and maintenance activities
and leveraging the company’s processing and pipeline
infrastructure.
Refining and marketing
At Cenovus’s Wood River, Illinois and Borger, Texas refineries,
which are co-owned with the operator Phillips 66, crude oil runs
were reduced compared with 2019 in response to lower product demand
and pricing due to the COVID-19 pandemic. Crude runs averaged
372,000 bbls/d in 2020, a decrease of 16% from 2019.
Cenovus had a full-year refining and marketing operating margin
shortfall of $388 million, compared with an operating margin of
$737 million in 2019. The decrease was primarily due to reduced
market crack spreads, lower crude oil runs and crude advantage,
partially offset by lower operating costs. The fourth quarter
refining and marketing operating margin shortfall was $73 million,
compared with an operating margin of $109 million in the same
quarter of 2019.
Cenovus’s refining operating margin is calculated on a first-in,
first-out (FIFO) inventory accounting basis. Using the
last-in, first-out (LIFO) accounting method employed by most
U.S. refiners, operating margin from refining and marketing would
have been $124 million lower in 2020, compared with $140 million
lower in 2019.
Sustainability
Cenovus remains committed to world-class safety performance and
environmental, social and governance (ESG) leadership. This
includes an ongoing commitment to transparent performance
reporting, an ambition to achieve net zero emissions by 2050 and a
plan to set ambitious new ESG targets for the combined company
later in 2021.
Reserves
Cenovus’s proved and probable reserves are evaluated each year
by independent qualified reserves evaluators (IQREs). At the end of
2020, Cenovus’s proved reserves decreased 1% to approximately 5.0
billion BOE, while proved plus probable reserves decreased 3% to
about 6.7 billion BOE. Proved bitumen reserves were approximately
4.8 billion barrels, largely unchanged from 2019, while proved plus
probable bitumen reserves decreased 1% to approximately 6.3 billion
barrels. Cenovus’s reserve life index (RLI) for proved reserves is
approximately 29 years, and its RLI for proved plus probable
reserves is approximately 39 years.
Cenovus’s 2020 proved reserves finding and development (F&D)
costs were $4.82/BOE, excluding changes in future development
costs, down 36% from 2019 and reflect decreased capital spending.
Three-year average proved reserves F&D costs were $5.16/BOE,
excluding changes in future development costs.
More details about Cenovus’s reserves and other oil and gas
information is available in the Advisory, the company’s
Management’s Discussion & Analysis (MD&A), Annual
Information Form (AIF) and Annual Report on Form 40-F for the year
ended December 31, 2020, which are available on SEDAR at sedar.com,
EDGAR at sec.gov and Cenovus’s website at cenovus.com.
Dividend
For the first quarter of 2021, the Board of Directors declared a
dividend of $0.0175 per share, payable on March 31, 2021 to common
shareholders of record as of March 15, 2021. The Board also
declared a first quarter dividend on each of the Cumulative
Redeemable First Preferred Shares – Series 1, Series 2, Series 3,
Series 5 and Series 7 – payable on March 31, 2021, to
shareholders of record as of March 15, 2021 as follows:
Preferred shares dividend summary |
(for the period ended March 31) |
Rate (%) |
|
|
Amount ($/share) |
Share series |
|
|
|
|
Series 1 |
2.404 |
|
|
0.15025 |
Series 2 |
1.839 |
|
|
0.11336 |
Series 3 |
4.869 |
|
|
0.29306 |
Series 5 |
4.591 |
|
|
0.28694 |
Series 7 |
3.935 |
|
|
0.24594 |
All dividends paid on Cenovus’s common and preferred shares will
be designated as "eligible dividends" for Canadian federal income
tax purposes. Declaration of dividends to common shareholders is at
the sole discretion of the Board and will continue to be evaluated
on a quarterly basis.
Cenovus year-end disclosure documents
Today, Cenovus is filing its audited Consolidated Financial
Statements, MD&A and AIF with Canadian securities regulatory
authorities. The company is also filing its Annual Report on Form
40-F for the year ended December 31, 2020 with the U.S. Securities
and Exchange Commission. Copies of these documents will be
available today on SEDAR at sedar.com, EDGAR at sec.gov (for the
Form 40-F) and the company's website at cenovus.com under
Investors. They can also be requested free of charge by email at
investor.relations@cenovus.com.
Husky year-end disclosure documents
Today, Husky Energy Inc., which became a wholly owned subsidiary
of Cenovus on January 1, 2021, is filing its audited Consolidated
Financial Statements, MD&A and AIF with Canadian securities
regulatory authorities. Husky is also filing its Annual Report on
Form 40-F for the year ended December 31, 2020 with the U.S.
Securities and Exchange Commission. Copies of these documents will
be available today on SEDAR at sedar.com, EDGAR at sec.gov (for the
Form 40-F) and Husky's website at huskyenergy.com under
Investors.
ADVISORY
Basis of PresentationCenovus reports financial
results in Canadian dollars and presents production volumes on a
net to Cenovus before royalties basis, unless otherwise stated.
Cenovus prepares its financial statements in accordance with
International Financial Reporting Standards (IFRS).
Barrels of Oil Equivalent Natural gas volumes
have been converted to barrels of oil equivalent (BOE) on the basis
of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be
misleading, particularly if used in isolation. A conversion ratio
of one bbl to six Mcf is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent value equivalency at the wellhead. Given that the value
ratio based on the current price of crude oil compared with natural
gas is significantly different from the energy equivalency
conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is
not an accurate reflection of value.
Finding and Development CostsFinding and
development (F&D) costs are calculated by dividing the sum of
total exploration and development costs incurred in 2020 in respect
of the relevant product types by the sum of total additions and
revisions for the applicable category of reserves in the same
period. The additions and revisions for the applicable category of
reserves for the period are determined by Cenovus’s IQREs,
effective December 31, 2020, and for purposes of determining
F&D costs, exclude changes resulting from acquisitions,
dispositions and production. F&D costs provide an indication of
the unit cost of finding and developing new reserves. F&D costs
do not have a standardized meaning and are defined differently by
different companies and as such are not comparable to similar
measures presented by other issuers.
Reserves EstimatesEstimates of reserves
referenced in this release were prepared effective December 31,
2020 by IQREs, based on the Canadian Oil and Gas Evaluation
Handbook and in compliance with the requirements of National
Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities. Estimates are presented using an average of the January
1, 2021 price forecasts from three IQREs. For additional
information about Cenovus’s reserves and other oil and gas
information, see “Reserves Data and Other Oil and Gas Information”
in Cenovus’s AIF and Annual Report on Form 40-F for the year ended
December 31, 2020 (available on SEDAR at sedar.com, on EDGAR at
sec.gov and Cenovus’s website at cenovus.com).
Non-GAAP Measures and Additional SubtotalThis
news release contains references to adjusted funds flow, free funds
flow, operating earnings (loss) and net debt, which are non-GAAP
measures, and operating margin, which is an additional subtotal
found in Note 1 of Cenovus’s Audited Consolidated Financial
Statements for the year ended December 31, 2020 (available on SEDAR
at sedar.com, on EDGAR at sec.gov and Cenovus’s website at
cenovus.com). These measures do not have a standardized meaning as
prescribed by IFRS. Readers should not consider these measures in
isolation or as a substitute for analysis of the company’s results
as reported under IFRS. These measures are defined differently by
different companies and therefore are not comparable to similar
measures presented by other issuers. For definitions, as well as
reconciliations to GAAP measures, and more information on these and
other non-GAAP measures and additional subtotals, refer to
“Non-GAAP Measures and Additional Subtotals” on page 1 of Cenovus’s
MD&A for the period ended December 31, 2020 (available on SEDAR
at sedar.com, on EDGAR at sec.gov and Cenovus’s website at
cenovus.com).
Forward-Looking InformationThis news release
contains certain forward-looking statements and forward-looking
information (collectively referred to as “forward-looking
information”) within the meaning of applicable securities
legislation, including the U.S. Private Securities Litigation
Reform Act of 1995, about Cenovus’s current expectations, estimates
and projections about the future of the combined company, based on
certain assumptions made in light of experiences and perceptions of
historical trends. Although Cenovus believes that the expectations
represented by such forward-looking information are reasonable,
there can be no assurance that such expectations will prove to be
correct.
Forward-looking information in this document is identified by
words such as “achieve”, “ambition”, “ambitious”, “committed”,
“commitment”, “continue”, “deliver”, “expect”, “on track”, “plan”,
“remain”, “target” and “will” or similar expressions and includes
suggestions of future outcomes, including, but not limited to
statements about: Cenovus’s positioning to reduce free funds flow
volatility, strengthen its balance sheet, accelerate the pace of
deleveraging and returns to shareholders; upstream production and
downstream throughput; achieving synergies as a result of the Husky
transaction by the end of 2021; continued development of COVID-19
pandemic measures at Cenovus’s worksites; Cenovus’s approach to
operations of its oil sands assets and the development of its
Conventional assets; commitments to world-class safety performance
and ESG leadership, including Cenovus’s commitment to transparent
performance reporting, its ambition to achieve net zero emissions
by 2050 and plans to set new ESG targets for the combined company;
and all statements related to the company’s 2021 guidance.
Statements relating to “reserves” are deemed to be
forward-looking information, as they involve the implied
assessment, based on certain estimates and assumptions, that the
reserves described exist in the quantities predicted or estimated,
and can be profitably produced in the future. Readers are cautioned
that the term “reserves life index” may be misleading, particularly
if used in isolation. This measure is used for consistency with
other oil and gas companies and does not reflect the actual life of
the reserves.
Developing forward-looking information involves reliance on a
number of assumptions and consideration of certain risks and
uncertainties, some of which are specific to Cenovus and others
that apply to the industry generally. The factors or assumptions on
which the forward-looking information is based include, but are not
limited to: Cenovus’s ability to realize the anticipated benefits
of the Husky transaction and to successfully integrate the business
of Husky, including new business activities, assets, operating
areas, regulatory jurisdictions, personnel and business partners
for Cenovus; the accuracy of any assessments undertaken in
connection with the Husky transaction and any resulting pro forma
information; forecast oil and natural gas, NGLs, condensate and
refined products prices, and light-heavy crude oil price
differentials; projected capital investment levels and associated
sources of funding; applicable royalty regimes, including expected
royalty rates; future improvements in availability of product
transportation capacity; increase to Cenovus’s share price and
market capitalization over the long term; the sufficiency of
existing cash balances, internally generated cash flows, existing
credit facilities, management of Cenovus’s asset portfolio and
access to capital markets to fund current and future obligations;
production from Cenovus’s Conventional segment will provide an
economic hedge for the natural gas required as a fuel source at
both Cenovus’s oil sands and refining operations; future narrowing
of crude oil differentials; the ability of Cenovus’s refining
capacity, dynamic storage, existing pipeline commitments, financial
hedge transactions and plans to ramp up crude-by-rail loading
capacity to partially mitigate a portion of Cenovus’s Western
Canadian Select (WCS) crude oil volumes against wider
differentials; Cenovus’s ability to produce from oil sands
facilities on an unconstrained basis; estimates of quantities from
properties and other sources not currently classified as proved;
the accuracy of accounting estimates and judgments; Cenovus’s
ability to obtain necessary regulatory and partner approvals; the
successful, timely and cost effective implementation of capital
projects, development programs or stages thereof; estimated
abandonment and reclamation costs, including associated levies and
regulations applicable thereto; Cenovus’s ability to obtain and
retain qualified staff and equipment in a timely and cost-efficient
manner; Cenovus’s ability to access sufficient capital and
insurance coverage to pursue development plans; the political,
economic and social stability of jurisdictions in which Cenovus
operates; the absence of significant disruption of operations,
including as a result of harsh weather, natural disaster, accident,
civil unrest or other similar events; forecast inflation and other
assumptions inherent in Cenovus’s 2021 guidance available on
cenovus.com; Cenovus’s ability to access and implement all
technology and equipment necessary to achieve expected future
results, and that such results are realized.
The risk factors and uncertainties that could cause actual
results to differ materially from the forward-looking information,
include, but are not limited to: the effect of the COVID-19
pandemic on Cenovus’s business, including any related restrictions,
containment, and treatment measures taken by varying levels of
government in the jurisdictions in which we operate; the success of
Cenovus’s COVID-19 pandemic workplace policies; Cenovus’s ability
to realize the anticipated benefits of the Husky transaction and to
successfully integrate Husky’s business with its own in a timely
manner and cost effective manner or at all; unforeseen or
undisclosed liabilities associated with, and accuracy of any
assessments undertaken in connection with, the Husky transaction
and any resulting pro forma information; the accuracy of historical
information provided by Husky; the effect of the Husky transaction
on relationships with customers, suppliers and other third parties;
Cenovus’s ability to access or implement some or all of the
technology necessary to efficiently and effectively operate its
assets and achieve expected future results; the impact of
production agreements among OPEC and non-OPEC members; foreign
exchange risk, including related to agreements denominated in
foreign currencies; the effectiveness of Cenovus’s risk management
program, including the impact of derivative financial instruments,
the success of hedging strategies and the sufficiency of Cenovus’s
liquidity position; the accuracy of estimates regarding commodity
prices, operating and capital costs, currency and interest rates;
lack of alignment of realized WCS prices and WCS prices used to
calculate the contingent payment to ConocoPhillips; product supply
and demand; the accuracy of Cenovus’s share price and market
capitalization assumptions; market competition, including from
alternative energy sources; risks inherent in Cenovus’s marketing
operations; risks inherent in the operation of Cenovus’s
crude-by-rail terminal, including health, safety and environmental
risks; Cenovus’s ability to maintain desirable ratios of net debt
to adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) and net debt to capitalization; Cenovus’s
ability to access various sources of insurance coverage and debt
and equity capital, generally, and on acceptable terms; Cenovus’s
ability to finance growth, capital expenditures and dividends,
including any increases thereto; changes in credit ratings
applicable to Cenovus or any of its securities; the accuracy of
reserves estimates, future production and future net revenue
estimates; the accuracy of accounting estimates and judgments;
Cenovus’s ability to replace and expand oil and gas reserves; the
costs to acquire exploration rights, undertake geological studies,
appraisal drilling and project development; Cenovus’s ability to
maintain relationships with its partners and to successfully manage
and operate its integrated operations and businesses; reliability
of Cenovus’s assets ability to successfully complete development
programs; refining and marketing margins; the cost and availability
of equipment necessary to Cenovus’s operations; potential failure
of products to achieve or maintain acceptance in the market; risks
associated with the energy industry’s and Cenovus’s reputation,
social licence to operate and litigation related thereto;
unexpected cost increases or technical difficulties in operating,
constructing or modifying production or refining facilities;
unexpected difficulties in producing, transporting or refining of
bitumen and/or crude oil into petroleum and chemical products;
risks associated with technology and equipment and its application
to Cenovus’s business, including potential cyberattacks; risks
associated with climate change and Cenovus’s assumptions relating
thereto; Cenovus’s ability to access markets and secure adequate
and cost effective product transportation including sufficient
pipeline, crude-by-rail, marine or alternate transportation,
including to address any gaps caused by constraints in the pipeline
system; availability of, and Cenovus’s ability to attract and
retain, critical talent; changes in labour demographics and
relationships; government actions to curtail energy operations or
pursue broader climate change agendas; adverse changes to, or
interpretation of, applicable laws or regulatory frameworks and the
impact thereof and the costs associated with compliance; the
political, social and economic conditions in the jurisdictions in
which Cenovus operates or supplies; the occurrence of unexpected
events resulting in operational interruptions, including blowouts,
fires, explosions, railcar incidents or derailments, aviation
incidents, gaseous leaks, migration of harmful substances, loss of
containment, releases or spills, including releases or spills from
offshore facilities and shipping vessels at terminals or hubs and
as a result of pipeline or other leaks, corrosion, epidemics,
pandemics, and catastrophic events, including, but not limited to,
war, extreme weather events, natural disasters, iceberg incidents,
acts of vandalism and terrorism, and other accidents or hazards
that may occur at or during transport to or from commercial or
industrial sites and other accidents or similar events; and risks
associated with existing and potential future lawsuits, shareholder
proposals and regulatory actions against Cenovus.
Readers are cautioned that the foregoing lists are not
exhaustive and are made as at the date hereof. Events or
circumstances could cause actual results to differ materially from
those estimated or projected and expressed in, or implied by, the
forward-looking information. For a full discussion of Cenovus’s
material risk factors, refer to “Risk Management and Risk Factors”
in Cenovus’s MD&A and to the risk factors described in other
documents Cenovus files from time to time with securities
regulatory authorities in Canada (available on SEDAR at sedar.com,
on EDGAR at sec.gov and Cenovus’s website at cenovus.com).
Additional information concerning Husky’s business and assets as of
December 31, 2020 may be found in Husky’s MD&A and AIF
(available on SEDAR at sedar.com and on EDGAR at sec.gov).
Cenovus Energy Inc. Cenovus Energy Inc. is an
integrated energy company with oil and natural gas production
operations in Canada and the Asia Pacific region, and upgrading,
refining and marketing operations in Canada and the United States.
The company is focused on managing its assets in a safe, innovative
and cost-efficient manner, integrating environmental, social and
governance considerations into its business plans. Cenovus common
shares and warrants are listed on the Toronto and New York stock
exchanges, and the company’s preferred shares are listed on the
Toronto Stock Exchange. For more information,
visit cenovus.com.
Find Cenovus on Facebook, Twitter, LinkedIn, YouTube and
Instagram.
CENOVUS CONTACTS:Investor
RelationsInvestor Relations general
line403-766-7711 |
Media RelationsMedia Relations general
line403-766-7751 |
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/70720fb1-40de-4482-86cd-7c2f26c069ed
https://www.globenewswire.com/NewsRoom/AttachmentNg/f91d4c79-d551-4fe3-98f8-0ceb0589e604
https://www.globenewswire.com/NewsRoom/AttachmentNg/beca83e2-dcc0-4fd4-938c-b78b5e7f1273
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