Cenovus delivers strong first quarter operational performance

Acquisition of FCCL and Deep Basin assets on track

Calgary, Alberta (April 26, 2017) – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) continued to deliver strong operational performance in the first quarter of 2017, increasing oil sands production by almost one-third while further reducing per-barrel crude oil operating costs compared with the same period in 2016. As a result of its reduced cost structure, significant liquidity and strong financial position, the company was also able to pursue the agreement, announced March 29, 2017, to acquire assets in Alberta and British Columbia from ConocoPhillips for approximately $17.7 billion. The agreement includes ConocoPhillips’ 50% interest in the FCCL Partnership, the companies’ jointly owned oil sands venture, as well as its Deep Basin assets. The transaction, which will be immediately accretive to key performance measures, is expected to close in the second quarter.

Acquisition update

  • Legacy assets at Pelican Lake and Suffield are being actively marketed
  • On track with plan to integrate Deep Basin assets and staff upon closing
  • Raised $3.0 billion gross proceeds through a bought-deal offering of common shares
  • Closed long-term senior unsecured notes offering for US$2.9 billion gross proceeds

Key first quarter developments

  • Generated adjusted funds flow of $323 million, compared with $26 million in 2016. Adjusted funds flow benefited from higher crude oil sales prices, partially offset by about $90 million in realized hedging losses, $29 million in acquisition-related transaction costs and about $20 million related to higher crude oil inventories
  • Cash from operating activities was $328 million, an 80% increase from 2016
  • Resumed field construction of the Christina Lake phase G expansion project
  • Successfully drilled 252 oil wells using an average of 21 drilling rigs. This included 232 gross stratigraphic test wells and 20 gross horizontal wells

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