From National Bank july 13From National Bank, in an industry note, july 13:
'Cenovus (Outperform; $11.00 TP): The company has proven to be nimble in response to changing market conditions, with the ability to utilize “dynamic storage” to ramp production up and down accordingly. 60 mbbl/d was shut-in at the trough in April, which has likely come back on-stream in May and June. Given the timing of condensate purchase and blending, combined with fewer volumes into the Gulf Coast, we are expecting weaker realized bitumen pricing for Q2, which should normalize over the second half of the year. We also think Cenovus could be in a position to purchase curtailment credits to produce over its quota (~367 mbbl/d), which should further support FCF generation through the second half of the year. Liquidity remains a strength, which we estimate at roughly $5 billion in Q2/20, primarily through a recently expanded credit facility, while its nearest maturity is not until Q3/2022 (US$500 mln). Lastly, with WTI now over its sustaining breakeven point, we estimate approximately $1 billion in FCF in 2021 (14% FCF yield), which we believe will be largely allocated to reducing debt towards its $5 billion target.'