In July, after several years of prioritizing debt repayment, Cenovus achieved its debt reduction goal, bringing its total net debt to $4.0 billion. This milestone means Cenovus now not must recurrently allocate a portion of its money flow to the balance sheet, freeing up funds for other purposes.
Cenovus’ plans for excess money
However, McKenzie said 100% of the surplus money can be returned to shareholders, more than likely in the shape of share buybacks, and wouldn’t be used for brand new growth strategies or merger and acquisition opportunities.
“It will be good to run this business model with 100 percent shareholder return going forward, and that’s what we’re focused on today – focusing on our core business and executing what’s in front of us rather than trying to take on new challenges or change strategies,” McKenzie told analysts and reporters.
Cenovus Earnings Report Highlights
- Cenovus (CVE/TSX) reported second-quarter profit of $1 billion on Thursday, up from $866 million within the year-ago quarter. Earnings per diluted share were $0.53, up from $0.44 a 12 months earlier.
The company said its free money flow was $735 million within the quarter ended June 30, up from $505 million within the year-ago quarter. The company reported second-quarter revenue of $14.9 billion, up from $12.2 billion within the year-ago quarter.
In the second quarter, Cenovus loaded its first vessels at Vancouver’s Westridge Marine Terminal following the successful commissioning of the Trans Mountain pipeline expansion, for which the corporate is a key contract supplier.
Notes for the remainder of 2024
In light of the strong results of the present 12 months, Cenovus on Thursday revised its production forecast for 2024 upwards. The company now expects total upstream production to be between 785,000 and 810,000 barrels of oil equivalent per day. The previous forecast was between 770,000 and 810,000 boe/d.
McKenzie said Cenovus is now almost 90% complete with construction of the Narrows Lake tie-in at its Christina Lake oil sands site. The tie-in project is a 17-kilometre pipeline connecting the Narrows Lake reservoir to the fundamental Christina Lake processing plant and can lead to additional production of as much as 30,000 barrels per day at the positioning from late 2025.
The company also continues to work to enhance the performance of its U.S. refining operations, which have been affected by unplanned outages and maintenance issues lately.
