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Cenovus substantially achieves $7 billion near-term net debt target

Company generates over $830 million in second-quarter free funds flow

Calgary, Alberta (July 25, 2019) – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) reduced net debt to $7.1 billion in the second quarter after generating over $830 million in free funds flow. The company’s excellent financial performance was driven by higher realized oil prices, which contributed to oil sands operating margin of more than $1.0 billion.

“Through focused operations and disciplined capital allocation, we have materially improved our balance sheet and achieved a very important milestone,” said Alex Pourbaix, Cenovus President & Chief Executive Officer. “As we relentlessly pursue getting our net debt even lower, to $5.0 billion, our balance sheet strength positions us to also consider opportunities for increasing shareholder returns and disciplined investments in our business.”

Cenovus remains on track to increase its crude-by-rail capacity to approximately 100,000 barrels per day (bbls/d) by the end of 2019. In June, the company transported nearly 36,000 bbls/d of its oil by rail to the U.S. Gulf Coast. In the first quarter, Cenovus transported approximately 16,000 bbls/d of its oil by rail to the U.S. Gulf Coast, where the company can achieve higher pricing than by selling it in Alberta.

Cenovus’s Christina Lake project

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.

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Steam generators at Cenovus’s Foster Creek project in northern Alberta.

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.

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Cenovus’s Wolf Lake Natural Gas Plant in the Deep Basin in west central Alberta.

Cenovus’s Wolf Lake Natural Gas Plant in the Deep Basin in west central Alberta.

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