Skip to main content June 2014 Investor Presentation – Cenovus Energy Inc. | Shale Experts
Loading...
Pm

June 2014 Investor Presentation – Cenovus Energy Inc.

Cenovus Energy Inc. · Jun 3, 2014 · 49 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 1
    A different kind of oil sands June 2014
  2. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 2
    A different kind of oil sands Focus on total shareholder return & building net asset value Foster Creek SAGD project Top-tier oil sands portfolio generates predictable, reliable growth Strong project execution & innovation drives…
  3. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 3
    Strong integrated oil portfolio TSX, NYSE | CVE Enterprise value C$29 billion Shares outstanding 757 MM 2014F production Oil & NGLs Natural gas 199 Mbbls/d 470 MMcf/d 2013 proved & probable reserves 3.2 BBOE Bitumen Economic…
  4. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 4
    2014 milestones Q1 Grow reserves & contingent resources ? Anticipate Grand Rapids regulatory approval (previously Q4 2013) ? Drill approximately 300 stratigraphic test wells & assess results ? Progress Narrows Lake phase A…
  5. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 5
    Established base of high quality resource See advisory for information on resource estimates. There is no certainty that it will be commercially viable to produce any portion of the contingent resources. ? Minimal exploration risk ?…
  6. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 6
    Bitumen best estimate economic contingent resources (Billions of barrels) 2013 2012 2011 2010 Foster Creek 1.4 1.3 0.9 0.8 Christina Lake core & other areas 1.1 1.2 1.1 0.8 Narrows Lake 0.1 0.1 0.4 0.5 Telephone Lake 2.6 2.2 2.1…
  7. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 7
    0 100 200 300 400 500 600 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F Oil sands Pelican Lake Conventional oil & NGLs Mbbls/d Volumes are shown before royalties and net to Cenovus. 2014F…
  8. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 8
    0 50 100 150 200 250 Foster Creek Christina Lake Oil sands production Mbbls/d Production is shown before royalties on a gross basis. Our manufacturing approach has driven oil sands growth
  9. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 9
    1 Properties 50% owned by ConocoPhillips. Certain phases may be subject to partner approval. 2 Represents first production target for phase F. Phase G first production expected in 2015 and phase H in 2016. 3 Each of phases F, G and H…
  10. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 10
    0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 GR FC TL CL NL ? Lower capital cost ? Lower operating cost ? Smaller surface footprint ? Lower energy usage ? Lower emissions ? Less water usage Low SOR means: Peer producing projects…
  11. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 11
    $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 C$/bbl/d 40% of all SAGD projects
  12. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 12
    Managing SOR at Foster Creek ? Optimizing placement of steam across our wells & pads with improved instrumentation ? Placing more pads on blow-down, transferring steam to new pads ? Using Wedge Well? technology to capture…
  13. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 13
    Understanding reservoir performance at Foster Creek Steam chambers ? 4D seismic SAGD pay 8 m Main facilities FC development boundary Christina Lake conformance / coalescence* Foster Creek conformance / coalescence Foster Creek…
  14. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 14
    Well pair conformance optimizes SOR ? Once steam chambers coalesce, good well conformance will minimize impact to SOR ? Increased Wedge Well? technology helps capture oil in existing wells with low conformance ? bringing on 42 new…
  15. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 15
    Start up SAGD Ramp down Full blowdown ~1 year 5 ? 10 years ~1 year 5+ years Time 5% 5 ? 50% 50 ? 70% Cumulative recovery factor Post steam recovery phase SAGD pad 1 CSOR Steam ? Steam is reallocated to a new pad ? Oil…
  16. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 16
    0 20 40 60 80 100 120 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Mbbls/d Production is shown on a gross basis. Focusing on consistent operations…
  17. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 17
    0 20 40 60 80 100 120 140 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Mbbls/d Production is shown on a gross basis. Phase D ~6 months Phase C…
  18. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 18
    0 20 40 60 80 100 120 175 global oil projects Oil sands SAGD projects Source: Goldman Sachs, Cenovus. Goldman Sachs defines breakeven as the US dollar equivalent WTI oil price required to achieve a 10% return. Cumulative peak…
  19. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 19
    $2 - $3/bbl Growth capital: ? Phase expansion (includes all infrastructure & initial wells) ? Phase debottlenecking & optimization ? Numerator for capital efficiency calculation $6 - $7/bbl Sustaining capital: ? All wells, pads,…
  20. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 20
  21. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 21
    Engineering & procurement ? Standard, repeatable design ? Outsource detailed engineering ? Standard equipment & services Fabrication ? Cenovus-owned & operated module yard (Nisku) ? Eliminates field rework & enhances safety…
  22. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 22
    Technology development drives SAGD performance: ? Wedge Well? technology ? Blowdown boiler ? Electric submersible pumps ? SkyStrat? drilling rig ? Solvent aided process ? Dewatering process Driving innovation in oil sands through…
  23. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 23
    Wedge Well? technology optimizes reservoir performance Technology details: ? < 0.1 average SOR ? First year production rate of 600 - 800 bbls/d at Foster Creek, current average of 400 bbls/d; 300 - 400 bbls/d at Christina Lake ?…
  24. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 24
    ? Decreases SOR by ~30% ? Increases full field recovery rates by ~15% ? Increases growth capital 10 - 20% ? Decreases sustaining capital by ~10% ? Reduces non-fuel operating costs by 5 - 10% ? Lowers emissions, water usage &…
  25. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 25
    Traditional strat well SkyStrat? drilling rig 90 day window Year-round drilling High access costs Lower access costs Short season leads to labour inefficiencies Year-round drilling ensures access to top crews Access roads impact…
  26. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 26
    Borealis region Telephone Lake is another cornerstone asset Telephone Lake project area Steepbank & East McMurray Saskatchewan Alberta Telephone Lake commercial project: ? Regulatory approval expected second half 2014 ?…
  27. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 27
    Dewatering pilot update: ? Purpose was to reduce SOR ? Worked as expected ? 4D seismic & well logs indicate we successfully replaced water & confined air ? ~70% of mobile top water was displaced in the pilot area ? Pilot completed…
  28. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 28
    SAGD pilot update: ? Operating since 2011 ? Two well pairs currently producing Commercial project: ? Received regulatory approval Q1 2014 ? Phase A: 8,000 ? 10,000 bbls/d ? first steam 2017 ? 180,000 bbls/d expected total…
  29. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 29
    Conventional oil & gas: ? ~70% fee lands ? >20% IRR ? Payback less than 3 years ? Scalable & flexible capital program ? Diversification of product streams Pelican Lake: ? Water/polymer flood Weyburn: ? CO 2…
  30. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 30
    0.0 0.2 0.4 0.6 2010 2011 2012 2013 2014F $ billion Capital Operating cash flow 0 10 20 30 2010 2011 2012 2013 2014F Mbbls/d Production Operating cash flow is a non-GAAP measure. See advisory for information on Pelican Lake…
  31. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 31
    0 200 400 600 800 2010 2011 2012 2013 2014F Production Natural gas: ? Significant cash flow with minimal capital investment & low operating costs ? Primarily fee lands ? CBM recompletions have strong returns ? 2014F production…
  32. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 32
    Production Alberta pricing Transportation North American & global crude pricing Refining Global product pricing Participating in the value chain to expand margin Expanding margin through market access & integration
  33. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 33
    Wood River Refinery Borger Refinery ? Refineries have access to discounted crudes ? Wood River accesses multiple pipelines - Keystone, Express-Platte, Mustang, Ozark ? Borger has access to Canadian heavy, West Texas Sour & growing…
  34. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 34
    0.0 0.5 1.0 1.5 2009 2010 2011 2012 2013 Capital Operating cash flow $ billion ? Feedstock advantage & heavy processing capacity drive cash flow ? Minimal annual maintenance capital of $150 - $160 million Operating cash flow is…
  35. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 35
    0 40 80 120 160 200 240 2011 2012 2013 2014F* Blended bitumen Blended conventional heavy *Expected net production capacity based on midpoints of the 2014 guidance document dated February 13, 2014. Blended conventional heavy oil…
  36. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 36
    ? West Coast: Trans Mountain - 11,500 bbls/d ? US Gulf Coast: Enbridge US Gulf Coast access - 75,000 bbls/d Keystone XL - 75,000 bbls/d ? East Coast: TCPL Energy East to Saint John, NB 200,000 bbls/d ? West Coast: Trans Mountain…
  37. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 37
    * 2014F production is based on midpoints of the guidance document dated February 13, 2014. Heavy crude oil includes Pelican Lake production and medium oil production which is exposed to heavy price differentials. Benefitting from global…
  38. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 38
    Refining operating cash flow sensitivities ? Operating cash flow $300 - $700 million* ? Capital $150 - $160 million ? Targeting 55% heavy crude input $1 change in crack spread = ~$65 million change in refining operating cash flow…
  39. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 39
    Operational ? Heavy oil production integrated with refining capacity ? Scalable conventional oil programs provide flexibility ? Portfolio approach to transportation Financial ? Financial strength to support growth plans ?…
  40. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 40
    Annual capital allocation priorities: 1. Committed capital of ~$2.0 billion* ? support existing business operations ? progress approved expansions at multi-phase projects 2. Dividend payments ? ~$730 million in 2013 ? 10% increase…
  41. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 41
    4 3 2 1 0 2010 2011 2012 2013 2014F $ billions 2014F based on commodity price assumptions outlined in the February 13, 2014 guidance document. Cash flow is a non-GAAP measure. See advisory. Strong cash flow profile supports capital…
  42. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 42
    *Non-GAAP measures. See advisory. Ensure significant liquidity & long dated debt maturities ? US$4.75 billion in notes with weighted average maturity in excess of ~17 years ? $3.0 billion committed undrawn credit facility maturing…
  43. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 43
    Debt information as at March 31, 2014 Total debt outstanding US ($ millions) CAD equivalent ($ millions) 5.70% due October 15, 2019 $1,300 $1,437 3.00% due August 15, 2022 $500 $553 3.80% due September 15, 2023 $450 $497 6.75% due…
  44. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 44
    Target range Debt to adjusted EBITDA ratios 0% 10% 20% 30% 40% 2012 2013 2014F Debt to capitalization* Net debt to capitalization* Times Target range 0.0 0.5 1.0 1.5 2.0 2012 2013 2014F Debt to adjusted EBITDA* Net debt…
  45. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 45
    Crude unhedged 49% Natural gas hedged Natural gas unhedged? 3% 3% Refining 11% Crude hedged 34% Hedges at March 31, 2014 Volume hedged Hedge price* Production 2014F Volume % hedged Crude 50,000 bbls/d US$99.97 199…
  46. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 46
    ? Strong financial health ? Sustainable pace of development ? Reliable, predictable cash flow to support payments ? Ongoing capital discipline $/share Dividend growth requires: Cumulative dividend per period. Dividends are…
  47. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 47
    Steepbank East McMurray Telephone Lake Grosmont Grand Rapids Foster Creek Proper Narrows Lake West Kirby Winefred L Christina Lake Prope Wabiskaw BOREALIS REGION GREATER PELICAN REGION CHRISTINA LAKE REGION FOSTER CREEK…
  48. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 48
    February 13, 2014 Total Production (Mbbls/d) (1) 54 - 59 62 - 68 116 - 128 Operating cash flow ($ millions) (2) 870 - 970 920 - 1,020 1,790 - 1,990 Capital expenditures ($ millions) 680 - 760 750 - 820 210 - 230 1,640 - 1,810…
  49. June 2014 Investor Presentation – Cenovus Energy Inc. – slide 49
    Oil production (Mbbls/d) (1) 190 - 208 Natural gas production (MMcf/d) 450 - 490 Total cash flow ($ billions) (2) 3.0 - 3.7 - per common share, diluted ($/share) 3.95 - 4.90 Operating cash flow ($ billions) (2) 3.7 - 4.5 Total…

From the store

Browse maps, data & reports in the Shale Experts store