Cenovus provides first-quarter operational update
March 22 2018 - 6:00AM
Cenovus Energy Inc. (TSX:CVE) (NYSE:CVE) has been operating its oil
sands facilities at reduced production rates and is storing excess
barrels in its reservoirs in response to wider than normal
light-heavy price differentials and recent pipeline capacity
constraints as well as the slow pace of the ramp-up in
crude-by-rail export capacity in Alberta.
“When Canadian heavy oil is selling at a wide discount to West
Texas Intermediate due to transportation bottlenecks, we have
significant capacity to store barrels in our oil sands reservoirs
to be produced and sold at a later date when pipeline capacity
improves and differentials narrow,” said Alex Pourbaix, Cenovus
President & Chief Executive Officer. “As a prudent response to
the current transportation and pricing environment, we’ve been
operating our Christina Lake and Foster Creek facilities at reduced
production levels since February while continuing to inject steam
at normal rates.”
While this strategy may result in fluctuating production from
month to month, Cenovus continues to expect full-year oil sands
volumes for 2018 to be within the company’s guidance range of
364,000 to 382,000 barrels per day. Cenovus anticipates first
quarter oil sands production of between 350,000 and 360,000 barrels
per day.
“We’re taking steps to respond to a critical shortage of export
pipeline capacity in Western Canada that is beyond our control and
is having a negative impact on our industry and the broader
Canadian economy,” said Pourbaix. “These transportation challenges
faced by our industry clearly demonstrate the urgent need for
approved pipeline projects in Canada to proceed as soon as
possible.”
To further mitigate the impact of current pipeline constraints
and discounted heavy oil pricing, Cenovus is evaluating
opportunities to optimize the scheduling of maintenance at its oil
sands facilities. The company is also in ongoing discussions with
rail providers to resolve a shortage of locomotive hauling capacity
that is preventing Cenovus from fully realizing the benefits of its
Bruderheim crude-by-rail facility.
Cenovus also expects its first quarter results will be impacted
by planned maintenance activity currently underway at the company’s
two U.S. refineries jointly owned with Phillips 66, which operates
the facilities.
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 Cenovus's current
expectations, estimates and projections about the future, based on
certain assumptions made in light of Cenovus's 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.
Forward-looking information in this document is identified by
words such as “anticipate”, “expect”, “mitigate”, “optimize”,
“capacity”, “planned”, “strategy”, “impact” or similar expressions
and includes suggestions of future outcomes, including statements
about: the company’s operating approach in response to pipeline
capacity restraints; the company's capacity to store barrels in its
oil sands reservoirs and related expectations regarding later
sales; expectations regarding the company's first quarter and full
year oil sands production volumes, including relative to the
company's guidance range; potential opportunities to optimize
scheduling of oil sands facilities maintenance and potential
mitigating impacts with respect to current pipeline constraints and
discounted heavy oil pricing; the timeframe for resolution of the
locomotive hauling capacity shortage; expected impacts of planned
refinery maintenance activities on the company's first quarter
results. Readers are cautioned not to place undue reliance on
forward-looking information as actual results may differ materially
from those expressed or implied.
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. Material factors or
assumptions on which the forward-looking information in this news
release is based include: forecast oil and natural gas, natural gas
liquids, condensate and refined products prices, crude oil
light-heavy price differential and other assumptions and
sensitivities identified in Cenovus’s 2018 guidance, available at
cenovus.com; successful and timely implementation of capital
projects or stages thereof, projected capital investment levels,
the flexibility of Cenovus's capital spending plans and the
associated sources of funding; accuracy of reserves estimates;
future use and development of technology; ability to obtain
necessary regulatory and partner approvals; and other risks and
uncertainties described from time to time in the filings we make
with securities regulatory authorities.
Readers are cautioned that the foregoing lists are not
exhaustive and are made as at the date hereof. Events or
circumstances could cause Cenovus's actual results to differ
materially from those estimated or projected and expressed in, or
implied by, the forward-looking information. Additional information
about the material risk factors that could cause Cenovus's actual
results to differ materially from those expressed or implied by its
forward-looking statements is contained under “Risk Management and
Risk Factors” in Cenovus's Management’s Discussion and Analysis
(MD&A) for the year ended December 31, 2017 (available on SEDAR
at sedar.com, on EDGAR at sec.gov and Cenovus's website at
cenovus.com).
Cenovus Energy Inc.Cenovus Energy Inc. is a
Canadian integrated oil and natural gas company. It is committed to
maximizing value by responsibly developing its assets in a safe,
innovative and efficient way. Operations include oil sands projects
in northern Alberta, which use specialized methods to drill and
pump the oil to the surface, and established natural gas and oil
production in Alberta and British Columbia. The company also has
50% ownership in two U.S. refineries. Cenovus shares trade under
the symbol CVE, and are listed on the Toronto and New York stock
exchanges. For more information, visit cenovus.com.
Find Cenovus on Facebook, Twitter, LinkedIn, YouTube and
Instagram.
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CENOVUS
CONTACTS: Investor RelationsKam
SandharSenior Vice-President, Strategy &Corporate
Development403-766-5883
Steven MurrayManager, Investor
Relations403-766-3382 |
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MediaBrett HarrisManager,
External Communications403-766-3420
Media Relations general
line403-766-7751 |
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