Cenovus Energy Inc T.CVE.WT

Primary Symbol: T.CVE Alternate Symbol(s): T.CVE.PR.E | T.CVE.PR.G | CNVEF | CVE.WS | CVE | T.CVE.PR.A | T.CVE.PR.B | T.CVE.PR.C

Energy Oil & Gas Integrated

Cenovus Energy Inc. is a Canada-based integrated energy company. The Company has oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The Company's segments include Upstream, Downstream, and Corporate and Eliminations. Its Upstream segment includes Oil Sands, Conventional, and Offshore. Its Downstream segment consists of Canadian Manufacturing, and United States Manufacturing. The Company's upstream operations include oil sands projects in northern Alberta, thermal and conventional crude oil, natural gas and natural gas liquids (NGLs) projects across Western Canada, crude oil production offshore Newfoundland and Labrador and natural gas and NGLs production offshore China and Indonesia. The Company's downstream operations include upgrading and refining operations in Canada and the United States, and commercial fuel operations across Canada.

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Cenovus Energy Inc

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Post by retiredcfon Nov 02, 2023 9:43am

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Post# 35713196

RBC

November 2, 2023

Cenovus Energy Inc.
3Q First Glance— US Downstream Steps Up

TSX: CVE | CAD 26.36 | Outperform | Price Target CAD 30.00

Sentiment: Neutral

Cenovus Energy’s robust third-quarter results reinforce our confidence in its integrated model and cash flow/free cash flow generation. The company reported 11% higher AFFO/share amid lower capital spending and in-line production volumes vs. Street consensus. Cenovus’ net debt (company definition) stood at $5.98 billion as of September 30—a touch higher than our $5.52 billion estimate amid working capital movements.

Conference Call

• Time: 10:00 am ET on Thursday, November 2 • Dial-In: (888) 664-6383

Key Points

• Cenovus generated $2.42 billion of free funds flow (before dividends) in the quarter with its net debt (company definition) down around $391 million to $5.98 billion (vs. RBC at $5.52 billion, before working capital movements) as of September 30. The company pointed toward a working capital build in the third-quarter.

Christina Lake production came in at 237,600 bbl/d (in-line with RBC at 236,600 bbl/d), while Foster Creek production came in at 189,300 bbl/d (ahead of RBC at 185,000 bbl/d).
Sunrise production volumes were 54,500 bbl/d in the third-quarter (vs. RBC at 52,000 bbl/d), rising 17% sequentially as Cenovus completed its 2023 redevelopment plan.
Refining margin (US + Canadian manufacturing) of $922 million (including $400 million related to processing crude purchased in prior periods at lower prices vs. RBC at $75 million), came in above our $815 million estimate. This included Canadian manufacturing margins of $170 million in the third-quarter and $752 million in the US Manufacturing segment, reflective of the ramp up of the Toledo refinery.
Cenovus reported a cash tax expense of $563 million in the third-quarter, slightly above the $546 million factored into our estimate ($0.01 per share impact).
Offshore volumes were 66,400 boe/d in the third-quarter, with the company highlighting in Indonesia it achieved first gas production from the MAC field in September.
At Terra Nova (34% wi), Cenovus stated the FPSO vessel returned to offshore Newfoundland & Labrador and commissioning activities are ongoing, with production expected to resume in the fourth-quarter.

Downstream Update

• Cenovus has planned maintenance in its US Manufacturing segment in the fourth-quarter of 2023 which should impact quarterly throughput by 55,000-65,000 bbl/d.

• Cenovus’ Superior refinery achieved a full and stable start-up of its fluid catalytic cracking unit in early-October, following operating challenges in the second-quarter.

• At Toledo, the refinery performed well following its restart in the second-quarter (90% utilization).

Guidance Update

• Based on what we see, there is no change to Cenovus’ 2023 guidance.