Cenovus provides risk management program update
April 04 2022 - 6:00AM
Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) is announcing the
suspension of its crude oil price risk management activities
related to West Texas Intermediate (WTI). Given the strength of
Cenovus’s balance sheet and liquidity position, the company has
determined these programs are no longer required to support
financial resilience. Cenovus will remain well positioned to
generate significant free funds flow over the long term. The
company plans to announce on April 27, 2022 its first-quarter
results, details on its plan for increasing shareholder returns and
updated 2022 corporate guidance.
Realized losses on all risk management positions for the three
months ending March 31, 2022 are expected to be about $970 million.
Actual realizations for the first quarter of 2022 will be reported
with Cenovus’s first-quarter results. Based on forward prices as of
March 31, 2022, estimated realized losses on all risk management
positions for the three months ending June 30, 2022 are currently
expected to be about $410 million. Actual gains or losses resulting
from these positions will depend on market prices or rates, as
applicable, at the time each such position is settled. Cenovus
plans to close the bulk of its outstanding crude oil price risk
management positions related to WTI over the next two months and
expects to have no significant financial exposure to these
positions beyond the second quarter of 2022.
Advisory 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
United States Private Securities Litigation Reform Act of 1995,
about our current expectations, estimates and projections about the
future, based on certain assumptions made by us in light of our
experience and perception 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. Readers are cautioned not to
place undue reliance on forward-looking information as actual
results may differ materially from those expressed or implied.
Cenovus undertakes no obligation to update or revise any
forward-looking information except as required by law.
This forward-looking information is identified by words such as
“estimate”, “expect”, “plan”, “position” and “will” or similar
expressions and includes suggestions of future outcomes, including
statements about: Cenovus’s ability to generate free funds flow
over the long term following the suspension of its crude oil price
risk management activities related to West Texas Intermediate
("WTI"); the announcement of Cenovus’s first-quarter results, plan
for increasing shareholder returns and updated 2022 corporate
guidance, including the content and timing of such announcements;
expected and estimated realized losses on all risk management
positions for the first and second quarters of 2022; and Cenovus's
intentions with respect to the closing of its outstanding crude oil
price risk management positions related to WTI, including the
extent and timing thereof and future financial exposure relating
thereto.
The forward-looking information in this news release also
includes financial outlooks regarding Cenovus, including Cenovus’s
expectations with respect to the impact of suspending its crude oil
price risk management activities related to WTI and its expected
and estimated realized losses on all risk management positions. The
purpose of the financial outlooks contained in this news release is
to provide management’s expectations regarding the effects of
suspending Cenovus's crude oil price risk management activities
related to WTI and readers are cautioned that such financial
outlooks may not be appropriate for other purposes.
Developing forward-looking information involves reliance on a
number of assumptions and consideration of certain risks and
uncertainties, including those assumptions stated and inherent in
Cenovus’s 2022 Corporate Guidance available on cenovus.com, some of
which are specific to Cenovus and others that apply to the industry
generally. In addition, the estimated amount of realized losses on
all risk management positions for the second quarter of 2022 stated
in this news release is based on applicable forward prices
as of March 31, 2022. Actual realized gains or losses on these
positions will fluctuate based on the actual market prices or
rates, as applicable, at the time each such position is settled.
These fluctuations could be material resulting in actual realized
gains or losses being materially different from the amounts
disclosed in this news release.
Additional information about risks, assumptions, uncertainties
and other factors that could cause Cenovus’s actual results to
differ materially from those expressed or implied by its
forward-looking information is contained under “Risk Management and
Risk Factors” in Cenovus’s Annual Management’s Discussion and
Analysis or Form 40-F for the year ended December 31, 2021.
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.
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Cenovus contacts |
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InvestorsInvestor Relations general
line403-766-7711 |
MediaMedia Relations general line403-766-7751 |
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