Cenovus responds to low oil prices with additional reductions to its capital budget

Calgary, Alberta (January 28, 2015) – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) is further reducing its 2015 capital spending in order to preserve cash and maintain the strength of its balance sheet. The company has identified approximately $700 million in additional capital expenditures originally planned for 2015 that can be deferred until crude oil prices recover.

“We have great assets, we’re in a strong financial position and we have the flexibility in our capital plan to make these additional spending reductions without compromising strategic growth projects” said Brian Ferguson, Cenovus President & Chief Executive Officer.“Our plan is to continue to pursue our long-term growth strategy, but at a pace we believe is more in line with the current pricing environment.”

In December 2014, Cenovus announced a 2015 capital spending budget of between $2.5 billion and $2.7 billion, an approximate 15% reduction from 2014 levels. Since December, crude oil prices have continued to weaken and the company is anticipating prices may remain low through 2015. As a result, Cenovus has revised its 2015 capital budget and is now targeting capital spending this year of between $1.8 billion and $2.0 billion. As part of its prudent approach to financial management, the company will continue to assess its spending plans on a regular basis and has the ability to make further budget adjustments, if required. In addition to capital flexibility, Cenovus continues to evaluate other corporate and financial opportunities, including generating cash from its existing portfolio.

In 2015, Cenovus plans to continue funding its optimization program at Christina Lake. Construction of the Christina Lake phase F oil sands expansion and the phase G expansion at Foster Creek, which are each approximately two-thirds complete, are also planned to continue. The expansions are expected to have strong economics, with supply costs for future capital investment at both Christina Lake and Foster Creek, including a 9% return on investment, of between US$40 and US$45 per barrel (bbl) West Texas Intermediate (WTI). Funding has also been allocated to maintain current production from Cenovus’s oil sands assets as well as to continue meeting all maintenance, safety, regulatory and contractual obligations across its portfolio.

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