Cenovus profits jump on record production and refinery strength
Cenovus Energy reported a higher third-quarter profit Friday. This was due to record oil sands output and a near-full utilization of the refinery, which helped offset lower crude prices.
The U.S. listed shares of Canadian oil and Gas Producer rose 1.5% during premarket trading.
The Calgary-based company's results are coming as it plans a major expansion with its planned acquisition of MEG Energy for about $6 billion.
The MEG shareholders' vote on the transaction was postponed to this week in order to provide additional regulatory disclosures.
Cenovus achieved a record of 832,900 barrels equivalent to oil per day (boepd), up from 771 300 boepd one year ago, mainly due to higher volumes produced at its Foster Creek project and Christina Lake project.
The refining industry also saw a record throughput of 710,700 barrels a day (bpd), compared to last year's 642,900 bpd. U.S. refineries are running at 99% efficiency, and the cost per barrel is down by 24%.
Cenovus CEO Jon McKenzie stated that Cenovus achieved record volumes in all areas of the business and major growth projects are nearing completion.
The company plans to begin drilling at its West White Rose offshore oil project by the end this year. First oil is expected in 2026.
Prices were also impacted by the volatile oil market. Brent crude averaged $68 a barrel in the quarter of July-September, a drop of more than 13% compared to a year ago, due to OPEC+ production increases and a slowing demand worldwide.
Cenovus lowered its forecast for 2025 U.S. downstream throughput to between 510,000 and 515, 000 bpd. This is about 52,500 barrels less at the midpoint. It also closed the sale its 50% stake in WRB Refining LP, and received C$1.8 billion.
Cenovus reported that its net income increased to C$1.29billion ($920m), or 72 Canadian Cents per share in the three-month period ended September 30 from C$820m, or 42 Canadian Cents per share a year ago.
(source: Reuters)