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Cenovus Keeping Spending Flat for 2021 at $2.5B (Pro-Forma Husky Deal)

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   |    Thursday,January 28,2021

Cenovus Energy Inc. has detailed its 2021 capital plans.

2021 Capital Plan

- Capex: $2.3--2.7 billion - flat vs. 2020 spending by both Cenovus and Husky, which was at $800 million and $1.7 billion, respectively (for a total of $2.5 billion)

  • The budget also includes $520 million to $570 million for the Superior Refinery rebuild

- Production: 755,000 BOE/d - up 5% from Cenovus/Husky's combined 2020 production of 718,400 boepd

Alex Pourbaix, Cenovus President & Chief Executive Officer, said: "With this budget we're delivering on the commitments we made when we announced the Husky transaction. In 2021 we'll remain focused on disciplined capital allocation, investing selectively in the highest return opportunities available in our expanded asset portfolio, and we expect to make significant progress towards achieving our synergy targets."

Operating Highlights

Oil Sands

Cenovus's Oil Sands segment has six producing assets located in Alberta and Saskatchewan the Christina Lake, Foster Creek, Sunrise and Tucker oil sands projects as well as the Lloydminster thermal projects and Cold/Enhanced Oil Recovery.

In 2021, the company plans to spend $850 million to $950 million on its Oil Sands segment. Oil Sands capital is primarily for sustaining production with the vast majority intended for Christina Lake, Foster Creek and the Lloydminster thermal assets. This reflects the company's philosophy of disciplined investment focused on higher-return opportunities.

The company continues to evaluate the application of operating strategies successfully employed at Foster Creek and Christina Lake across all of its oil sands assets.

Oil sands operating costs are expected to be in the range of $9.50/bbl to $11.50/bbl. This reflects presentation differences between Cenovus and legacy Husky as well as the inclusion of certain turnaround costs in operating expense.

Average oil sands production in 2021 is expected to be in the range of 524,000 bbls/d to 586,000 bbls/d. Christina Lake and Foster Creek expected production ranges are 220,000 bbls/d to 240,000 bbls/d and 165,000 bbls/d to 185,000 bbls/d, respectively. Foster Creek production estimates reflect incremental production anticipated from three new well pads scheduled to come online in the first half of the year. Cenovus expects production in the range of 80,000 bbls/d to 90,000 bbls/d at the Lloydminster thermal assets.


The Conventional segment includes conventional oil and natural gas production and processing operations in the Deep Basin and other parts of Western Canada. Cenovus also maintains an interest in the Marten Hills area of Alberta through its investment in Headwater Exploration Inc.

Cenovus plans to spend between $170 million and $210 million on its Conventional portfolio in 2021, which includes economic development in various plays to generate strong returns, improve underlying cost structures through volume enhancement and offset declines.

Production is expected to be in the range of 132,000 BOE/d to 151,000 BOE/d, including 590 million cubic feet per day (MMcf/d) to 650 MMcf/d of natural gas.

Per-unit operating costs are forecast to be in the range of $10/BOE to $12/BOE. This reflects a planned increase in turnarounds due to deferral of turnaround activity from 2020. The company continues to reduce absolute costs across its conventional portfolio and evaluate opportunities to improve the overall competitiveness of the assets.


Cenovus's Offshore segment includes operations and exploration prospects in the Asia Pacific region and offshore Newfoundland and Labrador. Assets in Asia include the Liwan Gas Project offshore China and natural gas projects in the Madura Strait offshore Indonesia. In Atlantic Canada, the company operates in the Jeanne d'Arc Basin, home to the White Rose oil field.

In 2021, Cenovus plans to spend between $200 million and $250 million on its Offshore segment. This capital spend includes planned wells in China and continued development of the MDA-MBH and MDK fields in the Madura Strait, as well as baseline preservation capital for the West White Rose Project, which has been deferred for 2021 while the company continues to evaluate its options.

Working interest production from the company's assets in China is expected to range between 43,000 BOE/d and 50,000 BOE/d, and working interest production from the assets in Indonesia is forecast to be between 7,000 BOE/d and 9,000 BOE/d. Working interest production from the company's Atlantic assets is expected to range between 11,000 BOE/d and 13,000 BOE/d in 2021.

Overall operating costs for the Offshore segment are expected to average in the range of $12/BOE to $14/BOE.

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