Cenovus announces third quarter 2024 results
Cenovus Energy reported its Q3 2024 financial results, generating $2.5 billion in cash from operating activities, $2.0 billion of adjusted funds flow, and $614 million of free funds flow. Upstream production reached 771,000 BOE/d, slightly lower than Q2 due to turnaround activity at Christina Lake. Downstream throughput increased by 20,000 bbls/d to 643,000 bbls/d. The company returned $1.1 billion to shareholders, including $732 million in share purchases and $329 million in base dividends. Net earnings were $820 million, down from $1.0 billion in Q2.
Cenovus Energy ha riportato i risultati finanziari del terzo trimestre 2024, generando 2,5 miliardi di dollari in contante dalle attività operative, 2,0 miliardi di dollari di flusso di fondi aggiustato e 614 milioni di dollari di flusso di fondi liberi. La produzione upstream ha raggiunto 771.000 BOE/giorno, leggermente inferiore rispetto al secondo trimestre a causa delle attività di turnaround a Christina Lake. Il throughput downstream è aumentato di 20.000 barili/giorno, arrivando a 643.000 barili/giorno. L'azienda ha restituito 1,1 miliardi di dollari agli azionisti, inclusi 732 milioni di dollari in acquisti di azioni e 329 milioni di dollari in dividendi base. Gli utili netti sono stati di 820 milioni di dollari, in calo rispetto a 1,0 miliardi di dollari nel secondo trimestre.
Cenovus Energy informó sus resultados financieros del tercer trimestre de 2024, generando 2.5 mil millones de dólares en efectivo de actividades operativas, 2.0 mil millones de dólares de flujo de fondos ajustados y 614 millones de dólares de flujo de fondos libres. La producción upstream alcanzó 771,000 BOE/día, ligeramente inferior al segundo trimestre debido a la actividad de mantenimiento en Christina Lake. El throughput downstream aumentó en 20,000 bbls/día, llegando a 643,000 bbls/día. La compañía devolvió 1.1 mil millones de dólares a los accionistas, incluidos 732 millones de dólares en compras de acciones y 329 millones de dólares en dividendos base. Las ganancias netas fueron de 820 millones de dólares, en comparación con 1.0 mil millones de dólares en el segundo trimestre.
Cenovus Energy는 2024년 3분기 재무 결과를 보고하며, 운영 활동에서 25억 달러의 현금을 생성하고, 20억 달러의 조정 기금 흐름 및 6억 1400만 달러의 자유 기금 흐름을 기록했습니다. 업스트림 생산량은 77만 1000 BOE/일에 도달했으며, Christina Lake의 정비 작업으로 인해 2분기보다 약간 감소했습니다. 다운스트림 처리량은 2만 배럴/일 증가하여 64만 3000 배럴/일에 이르렀습니다. 회사는 주주에게 11억 달러를 환원했으며, 이 중 7억 3200만 달러는 주식 매입, 3억 2900만 달러는 기본 배당금입니다. 순이익은 8억 2000만 달러로, 2분기 10억 달러에서 감소했습니다.
Cenovus Energy a publié ses résultats financiers du troisième trimestre 2024, générant 2,5 milliards de dollars de liquidités provenant des activités d'exploitation, 2,0 milliards de dollars de flux de fonds ajustés et 614 millions de dollars de flux de fonds libres. La production amont a atteint 771 000 BOE/jour, légèrement inférieure à celle du deuxième trimestre en raison des travaux de maintenance à Christina Lake. Le débit en aval a augmenté de 20 000 barils/jour pour atteindre 643 000 barils/jour. L'entreprise a restitué 1,1 milliard de dollars aux actionnaires, dont 732 millions de dollars en rachats d'actions et 329 millions de dollars en dividendes de base. Les bénéfices nets étaient de 820 millions de dollars, en baisse par rapport à 1,0 milliard de dollars au deuxième trimestre.
Cenovus Energy hat seine Finanzzahlen für das 3. Quartal 2024 veröffentlicht und dabei 2,5 Milliarden US-Dollar aus operativen Tätigkeiten erwirtschaftet, 2,0 Milliarden US-Dollar an bereinigtem Mittelzufluss und 614 Millionen US-Dollar an freien Mittelzuflüssen erzielt. Die Upstream-Produktion erreichte 771.000 BOE/Tag, was leicht unter dem Niveau des 2. Quartals aufgrund von Wartungsarbeiten in Christina Lake liegt. Der Durchsatz in der Downstream-Sparte stieg um 20.000 bbls/Tag auf 643.000 bbls/Tag. Das Unternehmen gab 1,1 Milliarden US-Dollar an die Aktionäre zurück, darunter 732 Millionen US-Dollar für Aktienkäufe und 329 Millionen US-Dollar in Basisdividenden. Der Nettogewinn betrug 820 Millionen US-Dollar, was einem Rückgang gegenüber 1,0 Milliarden US-Dollar im 2. Quartal entspricht.
- Generated $2.5 billion in operating cash flow
- Returned $1.1 billion to shareholders through dividends and buybacks
- Downstream throughput increased by 20,000 bbls/d
- Christina Lake turnaround completed ahead of schedule
- Net debt decreased to $4.2 billion
- Net earnings declined to $820 million from $1.0 billion in Q2
- Downstream operating margin shortfall of $323 million
- Total upstream production decreased by 29,500 BOE/d from Q2
- $209 million in FIFO losses in U.S. Refining
Insights
Cenovus delivered a mixed third quarter with
The balance sheet remains solid with net debt at
Growth projects are progressing well, particularly the Narrows Lake tie-back at
The operational execution this quarter demonstrates strong project management capabilities. Completing the Christina Lake turnaround ahead of schedule, resulting in 15,000-20,000 bbls/d better production, is particularly impressive. The Lima refinery turnaround was also well-managed, maintaining partial crude runs through Toledo connections.
The growth portfolio is advancing systematically: Narrows Lake pipeline construction, Foster Creek optimization and new Sunrise well pads all tracking to plan. These projects position Cenovus for meaningful production growth, with Narrows Lake alone adding 20,000-30,000 bbls/d by mid-2025.
CALGARY, Alberta, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) today announced its financial and operating results for the third quarter of 2024. The company generated nearly
“We are efficiently and effectively progressing our major projects and our growth plan is on track to deliver increased production that will enhance shareholder returns for the long term,” said Jon McKenzie, Cenovus President & Chief Executive Officer. “With planned upstream and downstream maintenance activities behind us, we’re well positioned to deliver strong operations for the balance of the year and into 2025.”
Recent highlights
- Returned
$1.1 billion of cash to shareholders in the third quarter, including$732 million in share purchases and base dividends of$329 million . - Completed the Christina Lake turnaround safely and well ahead of schedule, resulting in production from the asset exceeding the company’s forecast by 15,000 bbls/d to 20,000 bbls/d in the quarter.
- Completed a major turnaround at the Lima Refinery on schedule, with pipeline connections to the Toledo Refinery enabling Lima crude runs to continue at a reduced rate, avoiding a full shutdown.
- Began production from two new well pads at Sunrise which will ramp up in the fourth quarter, which are part of the Sunrise growth program.
- Completed the SeaRose floating production, storage and offloading (FPSO) vessel asset life extension work with resumed volumes around year end, achieving a critical milestone for the West White Rose project.
- All major projects remain on track to deliver significant growth with West White Rose, Foster Creek optimization, Sunrise growth program and Narrows Lake pipeline progressing as expected.
Third-quarter results
Financial summary
| ($ millions, except per share amounts) | 2024 Q3 | 2024 Q2 | 2023 Q3 |
| Cash from (used in) operating activities | 2,474 | 2,807 | 2,738 |
| Adjusted funds flow2 | 1,960 | 2,361 | 3,447 |
| Per share (diluted)2 | 1.05 | 1.26 | 1.81 |
| Capital investment | 1,346 | 1,155 | 1,025 |
| Free funds flow2 | 614 | 1,206 | 2,422 |
| Excess free funds flow2 | 146 | 735 | 1,989 |
| Net earnings (loss) | 820 | 1,000 | 1,864 |
| Per share (diluted) | 0.42 | 0.53 | 0.97 |
| Long-term debt, including current portion | 7,199 | 7,275 | 7,224 |
| Net debt | 4,196 | 4,258 | 5,976 |
Production and throughput
| (before royalties, net to Cenovus) | 2024 Q3 | 2024 Q2 | 2023 Q3 |
| Oil and NGLs (bbls/d)1 | 630,500 | 656,300 | 652,400 |
| Conventional natural gas (MMcf/d) | 844.6 | 867.2 | 867.4 |
| Total upstream production (BOE/d)1 | 771,300 | 800,800 | 797,000 |
| Total downstream throughput (bbls/d) | 642,900 | 622,700 | 664,300 |
1 See Advisory for production by product type.
2 Non-GAAP financial measure or contains a non-GAAP financial measure. See Advisory.
Operating results1
Cenovus’s total revenues were approximately
Upstream revenues were about
Total upstream production was 771,300 BOE/d in the third quarter, a decrease of 29,500 BOE/d from the prior quarter due to turnarounds at Christina Lake, Rainbow Lake and other Conventional facilities. Christina Lake production was 211,800 bbls/d, compared to 237,100 bbls/d in the second quarter, as a result of the planned turnaround activity. Production impacted by the Christina Lake turnaround was restored ahead of schedule. Foster Creek and Sunrise production increased quarter-over-quarter, with 198,000 bbls/d at Foster Creek compared with 195,000 bbls/d in the second quarter and Sunrise production of 50,400 bbls/d compared with 46,100 bbls/d in the second quarter. Production from the Lloydminster thermal and Lloydminster conventional heavy assets was 109,400 bbls/d and 16,300 bbls/d respectively, both slightly below the prior quarter.
Production in the Conventional segment was 118,100 BOE/d in the third quarter, a slight decrease from 123,100 BOE/d in the second quarter, as turnaround activities were safely completed at Rainbow Lake and other Conventional facilities.
In the Offshore segment, production was 65,500 BOE/d compared with 66,200 BOE/d in the second quarter. In Asia Pacific, sales volumes were 56,500 BOE/d, slightly lower than the previous quarter due to the completion of planned maintenance on the Liwan offshore platform and at the onshore Gaolan gas plant. In the Atlantic, production was 9,000 bbls/d, up from 8,400 bbls/d in the prior quarter as the non-operated Terra Nova field continues to ramp up to full rates. Planned maintenance work on the SeaRose FPSO was completed at the dry dock in Belfast and the vessel is returning to the White Rose field, with production expected to resume by year end.
Refining throughput in the third quarter was 642,900 bbls/d, an increase from 622,700 bbls/d in the second quarter, primarily due to reduced maintenance activity. Crude throughput in Canadian Refining was 99,400 bbls/d in the third quarter, compared with 53,800 bbls/d in the previous quarter, with the increase primarily due to a major turnaround at the Lloydminster Upgrader which impacted second quarter throughput.
In U.S. Refining, crude throughput was 543,500 bbls/d in the third quarter, compared with 568,900 bbls/d in the second quarter. Throughput decreased primarily due to a major turnaround at the Lima Refinery that commenced in September, which resulted in the plant running at reduced crude throughput rates. Market capture in the U.S. was lower than the previous quarter primarily due to inventory timing impacts, the Lima Refinery turnaround and unplanned outages in secondary units at the operated and non-operated refineries. Subsequent to the quarter, the turnaround at Lima was safely and successfully completed in October.
3 Non-GAAP financial measure. Total operating margin is the total of Upstream operating margin plus Downstream operating margin. See Advisory.
4 Specified financial measure. See Advisory.
Financial results
Cash from operating activities in the third quarter, which includes changes in non-cash working capital, was about
Long-term debt, including the current portion, was
Growth projects and capital investments
In the Oil Sands segment, the company continues to progress the tie-back of Narrows Lake, building a 17-kilometre pipeline connecting the reservoir to the Christina Lake processing facility, which will add between 20,000 bbls/d and 30,000 bbls/d of production. The project is approximately
The West White Rose project reached a significant milestone with the completion of the SeaRose FPSO asset life extension work at the dry dock in Belfast. The vessel is now sailing back to the White Rose field where reconnection and commissioning will take place to enable the existing field to resume production by year end. The West White Rose project is now approximately
Dividend declarations and share purchases
The Board of Directors has declared a quarterly base dividend of
In addition, the Board has declared a quarterly dividend on each of the Cumulative Redeemable First Preferred Shares – Series 1, Series 2, Series 3, Series 5 and Series 7 – payable on December 31, 2024 to shareholders of record as of December 13, 2024 as follows:
Preferred shares dividend summary
| Share series | Rate (%) | Amount ($/share) |
| Series 1 | 2.577 | 0.16106 |
| Series 2 | 5.935 | 0.37296 |
| Series 3 | 4.689 | 0.29306 |
| Series 5 | 4.591 | 0.28694 |
| Series 7 | 3.935 | 0.24594 |
All dividends paid on Cenovus’s common and preferred shares will be designated as “eligible dividends” for Canadian federal income tax purposes. Declaration of dividends is at the sole discretion of the Board and will continue to be evaluated on a quarterly basis.
In the third quarter, the company returned approximately
Since the share buyback program began in November 2021, as at October 28, Cenovus has purchased approximately 227 million common shares, delivering
2024 planned maintenance
The following table provides details on planned maintenance activities at Cenovus assets through 2024 and anticipated production or throughput impacts.
Potential quarterly production/throughput impact (Mbbls/d or MBOE/d)
| Q4 | Annualized impact | |
| Upstream | ||
| Oil Sands | 0-3 | 7-10 |
| Atlantic | 6-9 | 7-10 |
| Conventional | — | 2-4 |
| Downstream | ||
| Canadian Refining | — | 12-14 |
| U.S. Refining | 5-10 | 9-12 |
Sustainability
Cenovus’s 2023 Corporate Social Responsibility report was issued in August, highlighting the company’s progress and performance related to safety, Indigenous reconciliation, and inclusion & diversity as well as its approach to governance. Cenovus remains committed to delivering on its environmental projects and performance, however recent changes to Canada’s Competition Act has created uncertainty and risk around the company’s ability to speak publicly about its actions.
Conference call today
8 a.m. Mountain Time (10 a.m. Eastern Time)
Cenovus will host a conference call today, October 31, 2024, starting at 8 a.m. MT (10 a.m. ET).
To join the conference call, please dial 888-307-2440 (toll-free in North America) or 647-694-2812 to reach a live operator who will join you into the call. A live audio webcast will also be available and archived for approximately 30 days.
Advisory
Basis of Presentation
Cenovus reports financial results in Canadian dollars and presents production volumes on a net to Cenovus before royalties basis, unless otherwise stated. Cenovus prepares its financial statements in accordance with International Financial Reporting Standards (IFRS) Accounting Standards.
Barrels of Oil Equivalent
Natural gas volumes have been converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil compared with natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is not an accurate reflection of value.
Product types
| Product type by operating segment | Three months ended September 30, 2024 |
| Oil Sands | |
| Bitumen (Mbbls/d) | 569.6 |
| Heavy crude oil (Mbbls/d) | 16.3 |
| Conventional natural gas (MMcf/d) | 10.4 |
| Total Oil Sands segment production (MBOE/d) | 587.7 |
| Conventional | |
| Light crude oil (Mbbls/d) | 4.6 |
| Natural gas liquids (Mbbls/d) | 21.1 |
| Conventional natural gas (MMcf/d) | 554.8 |
| Total Conventional segment production (MBOE/d) | 118.1 |
| Offshore | |
| Light crude oil (Mbbls/d) | 9.0 |
| Natural gas liquids (Mbbls/d) | 9.9 |
| Conventional natural gas (MMcf/d) | 279.4 |
| Total Offshore segment production (MBOE/d) | 65.5 |
| Total upstream production (MBOE/d) | 771.3 |
Forward‐looking Information
This news release contains certain forward‐looking statements and forward‐looking information (collectively referred to as “forward‐looking information”) within the meaning of applicable securities legislation about Cenovus’s current expectations, estimates and projections about the future of the company, based on certain assumptions made in light of the company’s experiences and perceptions of historical trends. Although Cenovus believes that the expectations represented by such forward‐looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Forward‐looking information in this document is identified by words such as “anticipate”, “continue”, “deliver”, “expect”, “focus”, “plan”, “progress”, “steward”, “target” and “will” or similar expressions and includes suggestions of future outcomes, including, but not limited to, statements about: returning Excess Free Funds Flow to shareholders; shareholder returns, including renewing the company’s normal course issuer bid; safety; growth plans and projects; Net Debt; production guidance; the optimization project at Foster Creek; the tie-back of Narrows Lake to Christina Lake; amount and timing of production at Narrows Lake; production and timing of well pads at Sunrise; drilling activity and production at the Conventional Heavy Oil assets; return of the Sea Rose FPSO to the White Rose Field and return of production; the construction of the West White Rose project; 2024 planned maintenance; and dividend payments.
Developing forward‐looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Cenovus and others that apply to the industry generally. The factors or assumptions on which the forward‐looking information in this news release are based include, but are not limited to: the allocation of free funds flow; commodity prices, inflation and supply chain constraints; Cenovus’s ability to produce on an unconstrained basis; Cenovus’s ability to access sufficient insurance coverage to pursue development plans; Cenovus’s ability to deliver safe and reliable operations and demonstrate strong governance; and the assumptions inherent in Cenovus’s 2024 corporate guidance available on cenovus.com.
The risk factors and uncertainties that could cause actual results to differ materially from the forward‐looking information in this news release include, but are not limited to: the accuracy of estimates regarding commodity production and operating expenses, inflation, taxes, royalties, capital costs and currency and interest rates; risks inherent in the operation of Cenovus’s business; and risks associated with climate change and Cenovus’s assumptions relating thereto and other risks identified under “Risk Management and Risk Factors” and “Advisory” in Cenovus’s Management’s Discussion and Analysis (MD&A) for the year ended December 31, 2023.
Except as required by applicable securities laws, Cenovus disclaims any intention or obligation to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward‐looking information. For additional information regarding Cenovus’s material risk factors, the assumptions made, and risks and uncertainties which could cause actual results to differ from the anticipated results, refer to “Risk Management and Risk Factors” and “Advisory” in Cenovus’s MD&A for the periods ended December 31, 2023 and September 30, 2024, and to the risk factors, assumptions and uncertainties described in other documents Cenovus files from time to time with securities regulatory authorities in Canada (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and Cenovus’s website at cenovus.com.)
Specified Financial Measures
This news release contains references to certain specified financial measures that do not have standardized meanings prescribed by IFRS Accounting Standards. Readers should not consider these measures in isolation or as a substitute for analysis of the company’s results as reported under IFRS Accounting Standards. These measures are defined differently by different companies and, therefore, might not be comparable to similar measures presented by other issuers. For information on the composition of these measures, as well as an explanation of how the company uses these measures, refer to the Specified Financial Measures Advisory located in Cenovus’s MD&A for the period ended September 30, 2024 (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and on Cenovus's website at cenovus.com) which is incorporated by reference into this news release.
Upstream Operating Margin and Downstream Operating Margin
Upstream Operating Margin and Downstream Operating Margin, and the individual components thereof, are included in Note 1 to the interim Consolidated Financial Statements.
Total Operating Margin
Total Operating Margin is the total of Upstream Operating Margin plus Downstream Operating Margin.
| Upstream (5) | Downstream (5) | Total | |||||||||||||||
| ($ millions) | Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 | Q2 2024 | Q3 2023 | ||||||||
| Revenues | |||||||||||||||||
| Gross Sales | 8,259 | 8,715 | 8,783 | 9,228 | 9,053 | 9,658 | 17,487 | 17,768 | 18,441 | ||||||||
| Less: Royalties | (929 | ) | (859 | ) | (1,135 | ) | — | — | — | (929 | ) | (859 | ) | (1,135 | ) | ||
| 7,330 | 7,856 | 7,648 | 9,228 | 9,053 | 9,658 | 16,558 | 16,909 | 17,306 | |||||||||
| Expenses | |||||||||||||||||
| Purchased Product | 1,088 | 815 | 900 | 8,637 | 8,099 | 7,947 | 9,725 | 8,914 | 8,847 | ||||||||
| Transportation and Blending | 2,661 | 3,043 | 2,397 | — | — | — | 2,661 | 3,043 | 2,397 | ||||||||
| Operating | 860 | 889 | 914 | 918 | 1,099 | 778 | 1,778 | 1,988 | 1,692 | ||||||||
| Realized (Gain) Loss on Risk Management | (10 | ) | 20 | (10 | ) | (4 | ) | 8 | 11 | (14 | ) | 28 | 1 | ||||
| Operating Margin | 2,731 | 3,089 | 3,447 | (323 | ) | (153 | ) | 922 | 2,408 | 2,936 | 4,369 | ||||||
5 Found in the September 30, 2024, or the June 30, 2024, interim Consolidated Financial Statements.
Adjusted Funds Flow, Free Funds Flow and Excess Free Funds Flow
The following table provides a reconciliation of cash from (used in) operating activities found in Cenovus’s Consolidated Financial Statements to Adjusted Funds Flow, Free Funds Flow and Excess Free Funds Flow. Adjusted Funds Flow per Share – Basic and Adjusted Funds Flow per Share – Diluted are calculated by dividing Adjusted Funds Flow by the respective basic or diluted weighted average number of common shares outstanding during the period and may be useful to evaluate a company’s ability to generate cash.
| Three Months Ended | |||
| ($ millions) | September 30, 2024 | June 30, 2024 | September 30, 2023 |
| Cash From (Used in) Operating Activities (5) | 2,474 | 2,807 | 2,738 |
| (Add) Deduct: | |||
| Settlement of Decommissioning Liabilities | (74) | (48) | (68) |
| Net Change in Non-Cash Working Capital | 588 | 494 | (641) |
| Adjusted Funds Flow | 1,960 | 2,361 | 3,447 |
| Capital Investment | 1,346 | 1,155 | 1,025 |
| Free Funds Flow | 614 | 1,206 | 2,422 |
| Add (Deduct): | |||
| Base Dividends Paid on Common Shares | (329) | (334) | (264) |
| Dividends Paid on Preferred Shares | (9) | (9) | — |
| Settlement of Decommissioning Liabilities | (74) | (48) | (68) |
| Principal Repayment of Leases | (74) | (75) | (70) |
| Acquisitions, Net of Cash Acquired | (4) | (5) | (32) |
| Proceeds From Divestitures | 22 | — | 1 |
| Excess Free Funds Flow | 146 | 735 | 1,989 |
5 Found in the September, 30, 2024, or the June 30, 2024, interim Consolidated Financial Statements.
Cenovus Energy Inc.
Cenovus Energy Inc. is an integrated energy company with 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 is focused on managing its assets in a safe, innovative and cost-efficient manner, integrating environmental, social and governance considerations into its business plans. Cenovus common shares and warrants are listed on the Toronto and New York stock exchanges, and the company’s preferred shares are listed on the Toronto Stock Exchange. For more information, visit cenovus.com.
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