Cenovus plans to grow free funds flow 14% a year through 2021

Company targets $4 billion to $5 billion in asset sale agreements by year end

Calgary, Alberta (June 20, 2017) – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) today put forward a five-year plan that the company expects will generate 14% annualized free funds flow growth through 2021 at a West Texas Intermediate (WTI) price of US$55 per barrel (bbl) while increasing production at a 6% compound annual growth rate and reducing its debt. The plan entails disciplined capital investment to maintain the company’s current oil sands production and add barrels from expansion phase G at Christina Lake as well as grow volumes at its newly acquired Deep Basin assets. As part of its continued commitment to cost leadership, Cenovus also plans to achieve an additional $1 billion of cumulative capital, operating and general and administrative cost reductions over the next three years.

Cenovus is progressing its plan to divest non-core assets and is targeting between $4 billion and $5 billion in announced sales agreements by the end of the year, which is expected to more than satisfy the $3.6 billion asset sale bridge facility used to help fund the acquisition from ConocoPhillips. The company is now targeting to reach divestiture agreements by the end of 2017 for its entire legacy conventional portfolio. The divestiture processes for the Pelican Lake and Suffield assets are already well underway, and the company is now in the process of preparing data rooms for its Palliser asset in southern Alberta and its Weyburn CO2 enhanced oil operation in southern Saskatchewan. Combined, all of these assets are expected to produce approximately 112,000 barrels of oil equivalent per day (BOE/d) in 2017.

“We’ve had significant interest in our assets by a variety of potential purchasers and we’re confident we can achieve our divestiture target,” said Brian Ferguson, Cenovus President & Chief Executive Officer. “Reducing our debt position is our number one priority and we remain committed to strengthening our balance sheet and maintaining investment grade credit ratings. By taking these actions, we believe we’re poised to deliver significant value to shareholders over the coming years.”

2017 Investor Day webcast

8 a.m. Eastern Time (6 a.m. Mountain Time)

A live audio webcast of today’s Investor Day presentation will begin at 8 a.m. ET (6 a.m. MT) via cenovus.com or the following URL: http://webcast.fmav.ca/CenovusJune2017/ The webcast will be archived for approximately 90 days at cenovus.com.

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