(Platform at Husky’s Liwan Gas Project offshore China. Image via Cenovus Energy Inc.)
A major oil and gas business was hit by operational issues at two of its refineries, which led to a net loss of $408 million (CAD), or 21 cents, for Q4 2021 compared with a loss of $153 million (CAD), or 12 cents per share, a year earlier.
This week,
Cenovus Energy Inc. (TSX: CVE, Forum) posted a wider quarterly loss primarily due to on-cash impairment of $1.9 billion (CAD, $1.50 billion) in the US manufacturing segment. Cenovus shares closed down 6.4% on Tuesday at $18.30 (CAD) but moved 3% higher in early Wednesday trading on the Toronto Stock Exchange.
The company stated that it expects to rapidly reduce its net debt to $8 billion (CAD), despite the quarterly loss, which comes amid a surge in global oil prices to seven-year highs. Cenovus's net debt was below $9.6 billion (CAD) by the end of 2021.
Its President and Chief Executive Officer Alex Pourbaix explained in
a media release that in the first year as a combined company, Cenovus delivered, what he called “exceptional operational performance” at its upstream business, successfully integrated the assets acquired in the Husky transaction and aggressively reduced debt.
“We exceeded our expected transaction synergies and enhanced shareholder returns, doubling our quarterly dividend and commencing our share buyback program.”
Cenovus agreed to buy rival Husky last year to create Canada's third-largest oil and gas producer stated that total production added up to 825,300 barrels of oil equivalent per day (boepd) in the quarter, up from 467,202 boepd a year earlier. Downstream throughput (the amount of crude processed) rose 469,900 barrels per day (bpd) from 169,000 bpd.
Last week, the company’s rivals,
Imperial Oil Ltd. (TSX: IMO, Forum) and
Suncor Energy Inc. (TSX: SU, Forum) also missed quarterly profit expectations.