Cenovus’s 2017 budget sets stage for disciplined growth

Oil sands expansions drive 14% oil production increase


Calgary, Alberta (December 8, 2016) – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) plans to invest between $1.2 billion and $1.4 billion in 2017, a 24% increase compared with the company’s forecast capital spending for 2016. The 2017 budget includes capital to resume construction of the phase G expansion at Cenovus’s Christina Lake oil sands project and to invest in attractive conventional oil drilling opportunities with high-return potential in southern Alberta. The company plans to increase its total oil production in 2017 by 14% compared with its forecast average production for 2016. Cenovus also intends to hold the line on total per-barrel oil operating costs in 2017 and now expects its long-term oil sands sustaining capital to be close to $7.00 per barrel (bbl), about 50% lower than in 2014.

“With the tremendous progress we’ve made over the last two years in reducing operating costs and sustaining capital, we’re confident we can move forward with projects that have strong potential to drive shareholder value,” said Brian Ferguson, Cenovus President & Chief Executive Officer. “As we resume investing in growth projects in the year ahead, Cenovus will continue to focus on maximizing cost efficiencies and maintaining financial resilience while delivering safe and reliable operations.”

Cenovus continues to maintain one of the strongest balance sheets in the industry, with almost $3.9 billion in cash and $4 billion in unused credit facilities as at September 30, 2016. As of that date, the company’s net debt to capitalization ratio was 17% and its net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was 2.0 times, on a trailing 12-month basis.

Read the complete news release

Photos

Cenovus's Christina Lake project in northern Alberta uses steam-assisted gravity drainage (SAGD) technology to produce oil. The process involves drilling into the reservoir and injecting steam at a low pressure to soften the oil so it can be pumped to the surface.
Courtesy Cenovus Energy
Steam generators at Cenovus’s Foster Creek project in northern Alberta. The project uses a process called steam-assisted gravity drainage (SAGD) to produce oil, which involves drilling into the reservoir and injecting steam at a low pressure to soften the oil so it can be pumped to the surface.
Courtesy Cenovus Energy