CVE will release its year-end financials on Feb. 8 Cenovus Energy Corp. (CVE) will release its year-end financials on Feb. 8. RBC's Greg Pardy said he recently met with Cenovus's chief operating officer, Jon McKenzie, and came away impressed with the company's "operating momentum, capital discipline, rapid balance sheet deleveraging and rising shareholder returns on the horizon."
In particular, Mr. Pardy noted that Cenovus's management "affirmed that it has plenty of room to boost its quarterly dividend," which it already doubled to 3.5 cents from 1.75 cents in November. Mr. Pardy seems to be expecting a larger increase once the company gets its net debt below $8-billion (which Cenovus has said to expect by midyear). As well, said Mr. Pardy, management is "exploring alternative structures for shareholder returns, including special/variable dividends." He did not hazard a guess on amounts or timing.
Mr. Pardy predicted that the company may suddenly shift and arrange acquisitions. "From where we sit, one potential path for Cenovus to pursue would be to acquire BP's 50-per-cent operated interest in its 160,000-[gross-barrel-a-day] Toledo, Ohio, refinery, along with BP's 50-per-cent non-operated interest in the Sunrise oil sands project which Cenovus operates," he said. There may also be other "fruitful opportunities" to consider.