Bullboard - Stock Discussion Forum Cenovus Energy Inc T.CVE

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

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.... see more

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TSX:CVE - Post Discussion

Cenovus Energy Inc > RBC Preview

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Post by retiredcf on Oct 17, 2024 8:40am

RBC Preview

October 16, 2024

Cenovus Energy Inc.
3Q Preview—Upstream Looks Good, US Refining in Focus

TSX: CVE | CAD 23.23 | Outperform | Price Target CAD 29.00

Sentiment: Neutral

Cenovus will report its third-quarter results before market open on Thursday, October 31.

Conference Call

• Time: 10:00am ET, Thursday, October 31 • Dial-in: TBA

3Q Preview

RBC vs. Consensus (Analyst Survey): RBC is slightly above Street consensus on AFFO per share and production volumes, while below on capital spending.

Observations

• Our third-quarter production outlook for Cenovus of 770,500 boe/d reflects Christina Lake production of 197,900 bbl/d (impacted by planned maintenance activity) and Foster Creek production of 198,000 bbl/d.

Also included in our third-quarter outlook is Canada gas volumes of 573 mmcf/d.
Elsewhere, our third-quarter outlook includes Lloydminster thermal volumes of 131,000 bbl/d, Sunrise production volumes of 49,500 bbl/d, Terra Nova (34% wi) volumes of 13,500 bbl/d (net) and Liwan production of 40,500 boe/d (net) (including 191.5 mmcf/d of natural gas at a realization of $13/mcf).
In the downstream, we anticipate Canada + US refining (pre-tax) operating cash flow of -$202 million in the quarter (Canada: $105 million, US: -$307 million including an estimated FIFO inventory adjustment of -$225 million or -$0.12 per share), with Canada refining utilization of 95% and US refining utilization of 72%—reflective of planned maintenance activities within Cenovus’ US refining business.
Our estimates include $191 million in cash taxes, capital investment of $1.28 billion and $785 million of estimated share repurchases in the third-quarter.
All said, we peg Cenovus’ second-quarter AFFO at $2.09 billion ($1.13 per share) and free funds flow at $810 million (before estimated base dividends of $331 million and working capital movements).
As per our outlook, Cenovus’ net debt (company definition) would sit at about $4.57 billion as of September 30, increasing from $4.26 billion on June 30. This would suggest reduced shareholder returns in the fourth-quarter as per its formulaic shareholder returns policy. As previously announced, Cenovus achieved its $4.0 billion net debt target in July—unlocking 100% payout of excess funds flow to shareholder returns.
For our full third-quarter preview across our coverage universe, please see 3Q Preview—Unapologetically Bullish on Canada.