Cenovus finishes first quarter with strong balance sheet

Company’s 2016 cost-reduction initiatives on target

Calgary, Alberta (April 27, 2016) – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) is on track to achieve its previously announced target of reducing planned capital, operating and general and administrative (G&A) spending by up to $500 million compared with its original 2016 budget. Building on the significant cost reductions achieved in 2015, these additional spending cuts are expected to help the company remain financially resilient through this prolonged period of challenging market conditions.

“We continue to make significant structural improvements in our organization,” said Brian Ferguson, Cenovus President & Chief Executive Officer. “I believe these changes will make us a cost and efficiency leader so we can drive sustainable value for our shareholders in a volatile price environment. We also remain clearly focused on the safety and reliability of our operations.”

Key developments

  • Exited the first quarter of 2016 with nearly $8 billion in liquidity, including $3.9 billion in cash and cash equivalents and net debt to capitalization of 16%
  • Reduced first quarter crude oil per-unit operating costs by 14% to $11.08 per barrel (bbl) compared with the same period a year earlier
  • Largely completed previously announced workforce reductions for 2016 of 440 staff, bringing total reductions since December 31, 2014 to 31%
  • Reduced projected 2016 capital spending by $300 million and remain on track to lower operating and G&A expenses by $200 million, as previously announced
  • On track at Foster Creek to achieve expected volumes of between 60,000 barrels per day (bbls/d) net and 65,000 bbls/d net in the first half of 2016 and then ramp up to finish the year at more than 70,000 bbls/d net, in line with guidance

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