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Cenovus reports second-quarter 2020 results

Company captures value by leveraging flexibility of its operations

Calgary, Alberta (July 23, 2020) – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) remained focused on financial resilience in the second quarter of 2020 and used the flexibility of its assets and marketing strategy to adapt quickly to the changing external environment. This positioned the company to weather the sharp decline in benchmark crude oil prices in April by reducing volumes at its oil sands operations and storing the mobilized oil in its reservoirs for production in an improved price environment. While Cenovus’s financial results were impacted by the weak prices early in the quarter, the company captured value by quickly ramping up production when Western Canadian Select (WCS) prices increased almost tenfold from April to an average of C$46.03 per barrel (bbl) in June. As a result of this decision, Cenovus reached record volumes at its Christina Lake oil sands project in June and achieved free funds flow for the month of more than $290 million.

“We view the second quarter as a period of transition, with April as the low point of the downturn and the first signs of recovery taking hold in May and June,” said Alex Pourbaix, Cenovus President & Chief Executive Officer. “That said, we expect the commodity price environment to remain volatile for some time. We believe the flexibility of our assets and our low cost structure position us to withstand a continued period of low prices if necessary. And we’re ready to play a significant role in helping to lead Canada’s economic recovery.”

Cenovus’s Christina Lake project

Christina Lake oil sands project

Our oil sands projects in northern Alberta use 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.

Foster Creek steam generators

Our oil sands projects use 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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