Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) continued to gain
momentum in 2019, generating free funds flow of $361 million in the
fourth quarter and approximately $2.5 billion for the year,
reducing net debt by 22% year-over-year and completing construction
on its Christina Lake phase G oil sands expansion in March. In the
fourth quarter of 2019, Cenovus increased its dividend by 25% and
reached full ramp-up of its crude-by-rail shipping capacity.
“We continued to deliver on our commitments to shareholders last
year,” said Alex Pourbaix, Cenovus President & Chief Executive
Officer. “While running safe and reliable operations, we maintained
our industry-leading low cost structure, exercised capital
discipline and enhanced shareholder value. And through increased
rail capacity, we further improved our market access position,
providing greater exposure to global oil pricing.”
Key fourth-quarter and 2019 developments
- Reduced net debt by a further $289 million to $6.5 billion in
the fourth quarter
- Generated cash from operating activities of $740 million in the
fourth quarter and $3.3 billion for the full year as well as
adjusted funds flow of $678 million in the fourth quarter and
$3.7 billion for the full year
- Reduced year-over-year upstream operating expenses through
focused cost leadership
- Exceeded crude-by-rail shipping target, achieving 106,000
barrels per day (bbls/d) loaded in December
- Achieved fourth-quarter oil sands production of more than
374,000 bbls/d, up from 355,000 bbls/d in the third quarter of 2019
mainly due to reduced curtailment levels
2019 production & financial summary1 |
(for the period ended December 31) |
2019Q4 |
2018Q4 |
% change |
2019Full year |
2018Full year |
% change |
Financial ($ millions, except per share amounts) |
|
|
|
|
|
Cash from
operating activities |
740 |
485 |
53 |
3,285 |
2,154 |
53 |
Adjusted
funds flow2 |
678 |
-36 |
|
3,724 |
1,674 |
122 |
Per share diluted |
0.55 |
-0.03 |
|
3.03 |
1.36 |
|
Free funds
flow2 |
361 |
-312 |
|
2,548 |
311 |
719 |
Operating
earnings (loss) from continuing operations2 |
-164 |
-1,670 |
|
456 |
-2,755 |
|
Per share diluted |
-0.13 |
-1.36 |
|
0.37 |
-2.24 |
|
Net earnings
(loss) from continuing operations |
113 |
-1,350 |
|
2,194 |
-2,916 |
|
Per share diluted |
0.09 |
-1.10 |
|
1.78 |
-2.37 |
|
Capital investment |
317 |
276 |
15 |
1,176 |
1,363 |
-14 |
Production
(from continuing operations)3 (before royalties) |
|
|
|
|
|
Oil sands (bbls/d) |
374,132 |
326,481 |
15 |
354,257 |
362,996 |
-2 |
Deep Basin liquids3 (bbls/d) |
26,197 |
28,111 |
-7 |
26,673 |
32,454 |
-18 |
Total liquids production fromcontinuing
operations3
(bbls/d) |
400,329 |
354,592 |
13 |
380,930 |
395,450 |
-4 |
Total natural gas (MMcf/d) |
403 |
469 |
-14 |
424 |
528 |
-20 |
Total production from continuing operations
(BOE/d) |
467,448 |
432,713 |
8 |
451,680 |
483,458 |
-7 |
1 Cenovus adopted IFRS 16, “Leases,” effective January 1, 2019;
see full note in the Advisory.2 Adjusted funds flow, free funds
flow and operating earnings/loss are non-GAAP measures. See
Advisory. 3 Includes oil and natural gas liquids (NGLs).
Financial highlightsIn 2019, Cenovus increased
cash from operating activities to approximately $3.3 billion from
$2.2 billion the previous year and adjusted funds flow to about
$3.7 billion from $1.7 billion in 2018. Cenovus had free funds flow
of approximately $2.5 billion in 2019, an eight-fold increase from
a year earlier, driven by higher adjusted funds flow
and disciplined capital spending. Fourth-quarter free funds
flow was $361 million compared with a shortfall of $312 million in
the same period of 2018.
The company’s full-year upstream results benefited
from a 52% narrowing of the differential between West Texas
Intermediate (WTI) and Western Canadian Select (WCS) crude oil
prices in 2019 compared with 2018 as well as increased sales at
locations outside of Alberta, where the company was able to achieve
higher realized prices. Refining margins were lower compared with
2018 primarily due to reduced realized crack spreads.
“With our low cost structure, continued focus on capital
discipline and our diversified transportation portfolio to get more
of our product to U.S. markets, we were able to generate very
strong free funds flow in 2019,” said Pourbaix. “And we put that
cash to good use, further deleveraging our balance sheet and
increasing our dividend in the fourth quarter of the year.”
Operating earnings from continuing operations were $456 million
in 2019, compared with an operating loss from continuing operations
of nearly $2.8 billion in 2018. The year-ago results included a
significant realized hedging loss, as well as a number of
significant non-cash items. Full-year 2019 net earnings from
continuing operations were approximately $2.2 billion compared with
a net loss from continuing operations of $2.9 billion a year
earlier. The year-over-year increase in net earnings was
driven by higher operating earnings relative to 2018, non-operating
foreign exchange gains of $787 million in 2019 compared with losses
of $593 million in 2018 and a deferred income tax recovery in
2019, including $671 million related to the reduction of Alberta’s
corporate income tax rate and $387 million due to an internal
restructuring of the company’s U.S. operations resulting in an
increased tax basis of its U.S. refining assets.
Further information on the company’s financial results are
included in its 2019 Management Discussion & Analysis
(MD&A) available in the Investors section at cenovus.com.
Balance sheet strength and capital
disciplineCenovus continued to make significant progress
on its deleveraging plans through the past year, repaying
approximately US$1.8 billion of its unsecured notes and reducing
net debt to $6.5 billion by year end, compared with net debt of
approximately $8.4 billion at the start of 2019. Cenovus’s net debt
to adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) ratio was 1.6 times at the end of 2019, down
from 1.9 times at the end of the third quarter and 5.9 times at the
end of 2018. Deleveraging remains a top priority for Cenovus as the
company continues to pursue its net debt target of $5 billion. At
net debt of $5 billion, Cenovus anticipates being in a position to
maintain a target ratio of less than two times net debt to adjusted
EBITDA, at bottom-of-the-cycle commodity prices.
During the fourth quarter of 2019, Moody’s Investors Service
affirmed Cenovus’s Ba1 credit rating and improved its outlook from
‘stable’ to ‘positive,’ citing the significant amount of debt
reduction the company has achieved. In addition to making progress
towards re-establishing an investment grade credit rating at
Moody’s, Cenovus remains committed to maintaining its investment
grade credit ratings at S&P Global Ratings, DBRS Limited and
Fitch Ratings.
Market access and integrationCenovus
successfully ramped up its crude-by-rail shipping capacity in 2019
and in December exceeded its target by achieving average rail
loading volumes of nearly 106,000 bbls/d.
While pipelines remain the cornerstone of Cenovus’s
transportation strategy, rail continues to be an important option
to bridge the gap until expansion pipelines are completed.
Pipelines and rail are part of the company’s integrated business
model designed to maximize exposure to global oil prices and
mitigate pipeline congestion through a range of options to increase
margins and reduce cash flow volatility.
Production curtailmentCenovus’s 2019 oil sands
production averaged 354,257 bbls/d, approximately 2% lower than in
2018 primarily due to the Government of Alberta’s mandated
curtailment program. Fourth-quarter oil sands volumes averaged
374,132 bbls/d, 15% higher than the same quarter in 2018. In
December 2019, the Alberta government introduced the Special
Production Allowance (SPA) program, which allows crude oil
producers to exceed mandated curtailment levels if those volumes
are transported using incremental crude-by-rail capacity. In the
fourth quarter of 2018, volumes were impacted by Cenovus’s
voluntary decision to restrict oil sands production rates in
response to pipeline constraints and wide light-heavy oil
differentials. Cenovus anticipates higher oil production levels
overall this year compared with 2019 due to the return to
unconstrained production with the SPA program and the ramp-up of
Christina Lake phase G over the next six to 12 months.
“While mandatory curtailment reduced our overall production
volumes in 2019, it helped keep light-heavy oil price differentials
from reaching the record highs we saw at the end of 2018,
contributing to a significant overall benefit for the province and
for our industry,” said Pourbaix. “Compared with 2018, our royalty
payments to the province of Alberta increased significantly, more
than doubling to $1.1 billion in 2019.”
SustainabilityCenovus continues to deliver
equally strong operational, financial and environmental, social and
governance (ESG) performance with a continued focus on being an ESG
leader within its industry. In January, Cenovus announced its four
ESG focus areas and set bold targets to guide its performance
related to climate and greenhouse gas (GHG) emissions, Indigenous
engagement, land and wildlife and water stewardship. The company
also announced last month it plans to invest $10 million per year
for at least five years to build much-needed new homes in six
Indigenous communities near Cenovus’s oil sands operations in
northern Alberta.
As part of its commitment to strong ESG performance, Cenovus is
committed to rigorous governance practices and industry-leading
safety performance. In 2019, the company’s overall health and
safety performance improved from the previous year due to Cenovus’s
focus on risk management and asset integrity. The company also
achieved the second-lowest recordable injury frequency in its
history.
Operating highlights
Oil sandsFourth-quarter oil sands production at
Cenovus’s Christina Lake and Foster Creek oil sands projects was
more than 374,000 bbls/d, up from 355,000 bbls/d in the third
quarter of 2019 mainly driven by the easing of mandatory
curtailment levels. Full-year 2019 production declined slightly
from a year earlier primarily due to curtailment. As a result of
the SPA program and increased rail shipping capacity, Cenovus
has returned to unconstrained production, and the company expects
to ramp up its Christina Lake phase G expansion over the next six
to 12 months.
Fourth-quarter oil sands operating costs were $8.06 per barrel
(bbl) essentially flat with the same period a year earlier.
Full-year oil sands operating costs were $8.15/bbl, up 7% from
$7.65/bbl in 2018 primarily due to lower volumes as a result of
mandated curtailment. Per-barrel oil sands operating costs also
increased as a result of higher repairs and maintenance activity
and related costs due to a turnaround at Christina Lake during the
second quarter, and higher fuel costs. Fuel costs increased year
over year due to higher natural gas prices and fuel consumption as
Cenovus maintained normal steam injection rates at its oil sands
operations while reducing production volumes to meet
mandated curtailment levels. Cenovus continued to achieve further
reductions in its oil sands sustaining capital costs in 2019, which
declined 10% to $567 million, or approximately $4.00 per barrel of
capacity from the previous year.
At Christina Lake, the steam to oil ratio (SOR) was 2.0 in 2019,
compared with 1.9 in 2018. At Foster Creek, the SOR was unchanged
at 2.8 from a year earlier.
Full-year 2019 oil sands operating margin increased more than
three-fold year over year to approximately $3.5 billion due to
higher average realized sales prices, decreased transportation and
blending costs and realized risk management losses of
$23 million compared with losses of approximately $1.6 billion
in 2018, partially offset by lower sales volumes and higher
royalties.
Deep Basin Cenovus has largely completed work
to optimize its Deep Basin operating model to reduce costs, improve
efficiency and maximize value. The company continues to take a
disciplined approach in the Deep Basin and is driving the business
to be resilient at bottom-of-the-cycle commodity prices of
US$45/bbl WTI and Alberta Energy Company (AECO) pricing of $1.50
per gigajoule. The Deep Basin generated operating margin in excess
of capital investment of $64 million in the fourth quarter of 2019,
up 45% from the same period a year earlier. Operating margin in
excess of capital investment was $189 million for the full
year.
Deep Basin production averaged 97,423 barrels of oil equivalent
per day (BOE/d) in 2019, a 19% decrease from 2018 levels, due to
natural declines from lower sustaining capital investment, the
divestiture of Cenovus’s Pipestone Partnership in 2018 and
temporary well shut-ins in response to low natural gas prices.
Total Deep Basin operating costs decreased 16% in 2019 compared
with the previous year as a result of the Pipestone divestiture,
lower third-party processing costs due to lower throughput and
Cenovus focusing on optimizing operations. This optimization work
included well interventions, repair and maintenance activities and
leveraging the company’s processing infrastructure to lower the
cost structure. Despite the 2019 year-over-year production decrease
on a full-year basis, operating costs increased a modest 2% to
$8.79/BOE from $8.58/BOE in 2018.
Refining and marketingCenovus’s Wood River,
Illinois and Borger, Texas refineries, which are co-owned with the
operator, Phillips 66, had solid operational performance in 2019.
Crude oil runs and refined product output in 2019 were consistent
with the previous year.
Refining and marketing operating margin for the fourth quarter
was $109 million, compared with $251 million in the same quarter of
2018. Full-year refining and marketing operating margin was $737
million, compared with operating margin of $996 million in the
year-earlier period. The year-over-year decrease was primarily due
to reduced crude cost advantage as heavy and medium sour crude oil
differentials narrowed.
Effective January 2020, the Wood River refinery was re-rated to
reflect higher processing capacity of 346,000 gross bbls/d, an
increase of 13,000 bbls/d from 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 $140 million lower in 2019, compared with $118 million
higher in 2018.
ReservesCenovus’s proved and probable reserves
are evaluated each year by independent qualified reserves
evaluators (IQREs). At the end of 2019, Cenovus had total proved
reserves of approximately 5.1 billion BOE, essentially unchanged
from 2018, while total proved plus probable reserves decreased 2%
to about 6.9 billion BOE. Proved bitumen reserves were
approximately 4.8 billion barrels, while proved plus probable
bitumen reserves were about 6.4 billion barrels, both relatively
unchanged from 2018. Cenovus’s reserve life index (RLI) for proved
reserves is in excess of 30 years, with proved plus probable
reserves having an RLI in excess of 40 years.
Cenovus’s 2019 proved reserves finding and development (F&D)
costs were $7.57/BOE, excluding changes in future development
costs, up 74% from 2018, reflecting lower proved reserves
additions, partially offset by decreased capital spending.
Three-year average proved reserves F&D costs were $5.97/BOE,
excluding changes in future development costs.
Cenovus, which primarily holds long-life bitumen reserves,
believes another meaningful measure of efficiency is F&D costs
for proved developed reserves, excluding changes in future
development costs. For 2019, Cenovus’s bitumen proved developed
reserves F&D costs were $2.49/bbl, excluding changes in future
development costs, a decrease of more than 50% from 2018, mainly as
a result of lower capital expenditure on Christina Lake phase G,
deferral of oil sands sustaining capital expenditure and the
company’s focus on maximizing value.
More details about Cenovus’s reserves and other oil and gas
information is available in the Advisory, the company’s Annual
Information Form (AIF) and Annual Report on Form 40-F for the year
ended December 31, 2019, which are available on SEDAR at sedar.com,
EDGAR at sec.gov and Cenovus’s website at cenovus.com.
DividendFor the first quarter of 2020, the
Board of Directors declared a dividend of $0.0625 per share,
payable on March 31, 2020 to common shareholders of record as of
March 13, 2020. Based on the February 11, 2020 closing share price
on the Toronto Stock Exchange of $11.98, this represents an
annualized yield of approximately 2.1%. Declaration of dividends is
at the sole discretion of the Board and will continue to be
evaluated on a quarterly basis.
Year-end disclosure documentsToday, 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, 2019 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.
Conference Call Today9
a.m. Mountain Time (11 a.m. Eastern Time)
Cenovus will host a conference call today, February 12, 2020,
starting at 9 a.m. MT (11 a.m. ET). To participate, please dial
888-231-8191 (toll-free in North America) or 647-427-7450
approximately 10 minutes prior to the conference call. A live audio
webcast of the conference call will also be available via
cenovus.com. The webcast will be archived for approximately 90
days.
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 EquivalentNatural 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 2019 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, 2019, 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,
2019 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, 2020 price forecasts from three IQREs. For additional
information about our 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,
2019 (available on SEDAR at sedar.com, on EDGAR at sec.gov and
Cenovus's website at cenovus.com).
Accounting ChangesCenovus adopted International
Financial Reporting Standard 16, “Leases,” effective January 1,
2019 using the modified retrospective approach; therefore, 2018
comparative information has not been restated.
Non-GAAP Measures and Additional Subtotal This
news release contains references to adjusted EBITDA, adjusted funds
flow, cash flow, capitalization, free funds flow, operating
earnings (loss) and net debt, which are non-GAAP measures, and
operating margin, which is an additional subtotal found in Notes 1
and 11 of Cenovus's Audited Consolidated Financial Statements for
the year ended December 31, 2019 (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 Management's
Discussion & Analysis (MD&A) for the period ended December
31, 2019 (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 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.
Forward-looking information in this document is identified by
words such as “anticipate”, “committed”, “continue”, “driving”,
“expect”, “focus”, “plan”, “target” and “will” or similar
expressions and includes suggestions of future outcomes, including,
but not limited to statements about: maintaining a target ratio of
less than two times Net Debt to adjusted EBITDA at
bottom-of-the-cycle commodity prices; maintaining investment grade
credit ratings; maximizing exposure to global oil prices and
mitigating pipeline congestion through a range of options to
increase margins and reduce cash flow volatility; future oil
production in 2020, including returning to unconstrained
production; Cenovus’s four ESG focus areas and related targets and
ambitions; plans to invest $10 million per year for at least five
years in six Indigenous communities; the ramp-up of the Christina
Lake phase G expansion over the next six to 12 months; achieving
resilience in the Deep Basin at commodity prices of US$45/bbl WTI
and AECO pricing of $1.50 per gigajoule; and all statements related
to the company’s updated 2020 Guidance (dated December 9,
2019).
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 our forward-looking information is based include, but are not
limited to: forecast oil and natural gas, natural gas liquids,
condensate and refined products prices, light-heavy crude oil price
differentials and other assumptions identified in Cenovus’s 2020
guidance (dated December 9, 2019), available at cenovus.com;
bottom-of-the-cycle commodity prices of about US$45/bbl WTI and
C$44/bbl WCS; projected capital investment levels, the flexibility
of capital spending plans and associated sources of funding;
achievement of further cost reductions and sustainability thereof;
applicable royalty regimes, including expected royalty rates;
future improvements in availability of product transportation
capacity; increase to our share price and market capitalization
over the long term; future narrowing of crude oil differentials;
the Government of Alberta’s mandatory production curtailment
continuing to maintain a relatively narrow differential between WTI
and WCS crude oil prices thereby positively impacting cash flows
for Cenovus; the ability of our 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 our WCS crude oil volumes against wider
differentials; ability to produce from our oil sands facilities on
an unconstrained basis; estimates of quantities of oil, bitumen,
natural gas and liquids from properties and other sources not
currently classified as proved; accounting estimates and judgments;
results; our ability to obtain necessary regulatory and partner
approvals; the successful and timely implementation of capital
projects, development programs or stages thereof; our ability to
generate sufficient cash flow to meet our current and future
obligations; our ability to obtain and retain qualified staff and
equipment in a timely and cost-efficient manner; the availability
of Indigenous owned or operated businesses; our ability to develop,
access and implement all technology and equipment necessary to
achieve expected future results, and that such results are
realized.
2020 guidance, dated December 9, 2019, assumes: Brent prices of
US$60.00/bbl, WTI prices of US$55.00/bbl; WCS of US$37.50/bbl; AECO
natural gas prices of $1.80/Mcf; Chicago 3-2-1 crack spread of
US$16.00/bbl; and an exchange rate of $0.76 US$/C$.
The risk factors and uncertainties that could cause our actual
results to differ materially, include, but are not limited to: our
ability to access or implement some or all of the technology
necessary to efficiently and effectively operate our assets and
achieve expected future results; volatility of and other
assumptions regarding commodity prices; failure of the Government
of Alberta’s mandatory production curtailment to continue to cause
the differential between the WTI and the WCS crude oil prices to
narrow or to narrow sufficiently to positively impact our cash
flows; unexpected consequences related to the Government of
Alberta’s mandatory production curtailment; the effectiveness of
our risk management program; the accuracy of cost estimates
regarding commodity prices, currency and interest rates; product
supply and demand; accuracy of our share price and market
capitalization assumptions; market competition, including from
alternative energy sources; risks inherent in our marketing
operations, including credit risks, exposure to counterparties and
partners, including ability and willingness of such parties to
satisfy contractual obligations in a timely manner; risks inherent
in the operation of our crude-by-rail terminal, including health,
safety and environmental risks; our ability to maintain desirable
ratios of net debt to adjusted EBITDA as well as net debt to
Capitalization; our ability to access various sources of debt and
equity capital, generally, and on terms acceptable to us; our
ability to finance growth and sustaining capital expenditures;
changes in credit ratings applicable to us or any of our
securities; accuracy of our reserves, future production and future
net revenue estimates; accuracy of our accounting estimates and
judgements; our ability to replace and expand oil and gas reserves;
potential requirements under applicable accounting standards for
impairment or reversal of estimated recoverable amounts of some or
all of our assets or goodwill from time to time; our ability to
maintain our relationship with our partners and to successfully
manage and operate our integrated business; reliability of our
assets including in order to meet production targets; potential
disruption or unexpected technical difficulties in developing new
products and manufacturing processes; ability to successfully
complete development programs; the occurrence of unexpected events
such as fires, severe weather conditions, explosions, blow-outs,
equipment failures, transportation incidents and other accidents or
similar events; refining and marketing margins; cost escalations;
potential failure of products to achieve or maintain acceptance in
the market; risks associated with fossil fuel industry reputation
and litigation related thereto; unexpected cost increases or
technical difficulties in constructing or modifying manufacturing
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 our business, including potential
cyberattacks; risks associated with climate change and our
assumptions relating thereto; the timing and the costs of well and
pipeline construction; our ability to 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;
possible failure to obtain and retain qualified staff and equipment
in a timely and cost efficient manner; changes in the regulatory
framework in any of the locations in which we operate, including
changes to the regulatory approval process and land-use
designations, royalty, tax, environmental, greenhouse gas, carbon,
climate change and other laws or regulations, or changes to the
interpretation of such laws and regulations, as adopted or
proposed, the impact thereof and the costs associated with
compliance; changes in general economic, market and business
conditions; the political and economic conditions in the countries
in which we operate or supply; the occurrence of unexpected events
and the instability resulting therefrom; and risks associated with
existing and potential future lawsuits, shareholder proposals and
regulatory actions against us.
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 foregoing lists are not
exhaustive and are made as at the date hereof. Events or
circumstances could cause our 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 the Corporation’s annual 2019 MD&A, which section of the
MD&A is incorporated by reference into this AIF, 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, and with the U.S. Securities and Exchange
Commission on EDGAR at sec.gov, and on the Corporation’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 sustainably developing its assets in a safe,
innovative and cost-efficient manner, integrating environmental,
social and governance considerations into its business plans.
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.
CENOVUS CONTACTS: |
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Investor
RelationsInvestor Relations general
line403-766-7711 |
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Media Reg
CurrenSenior Media Advisor403-766-2004 |
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Media Relations general line403-766-7751 |
Photos accompanying this announcement are available:
https://www.globenewswire.com/NewsRoom/AttachmentNg/70720fb1-40de-4482-86cd-7c2f26c069edhttps://www.globenewswire.com/NewsRoom/AttachmentNg/f91d4c79-d551-4fe3-98f8-0ceb0589e604
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