Barclays CEO Energy-Power Conference Brian Ferguson, President & Chief Executive Of cer September 11, 2013
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…
Strong integrated oil portfolio TSX, NYSE | CVE Enterprise value $28 billion Shares outstanding 756 MM 2013F production Oil & NGLs Natural gas 183 Mbbls/d 515 MMcf/d 2012 proved & probable reserves 3.1 BBOE Bitumen Economic…
SAGD is our core oil growth strategy ? Minimal exploration risk ? Low F&D costs ? Large scale ? Stable production ? High recovery factors ? Opportunity to advance technology 0.7 Bbbls Contingent 9.6 Bbbls Proved 1.7 Bbbls…
0 100 200 300 400 500 600 2010 2011 2012 2013F 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. 2013F…
? Use net asset value (NAV) to measure our progress ? Capital allocation based on economic metrics ? Focus on material investments that grow NAV per share See advisory for information on how we calculate NAV. $28 $32 $37 $40 0…
0 100 200 300 400 500 600 700 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F 2019F Mbbls/d CL - C FC ? A CL - A CL - B FC ? C FC - D FC - E FC - B CL - D CL - E CL - F FC -…
0 20 40 60 80 100 120 175 global oil projects Oil sands SAGD projects Source: Goldman Sachs, Cenovus. Goldman Sachs defines breakeven as the US dollar equivalent WTI oil price required to achieve a 10% return. Cumulative peak…
Capital Tax & return (9% after-tax) Operating costs Royalties Blending & transport Light-heavy differential Supply cost (US$/bbl) at Investor Day: Project 2010 2013 Foster Creek 40 - 50 35 - 45 Christina Lake 45 - 55 35 - 45…
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 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…
Capital efficiency is calculated based on production design capacity for each phase. *Foster Creek FG&H expectations reflect greenfield expansion and design enhancement initiatives. **CDE optimization phase Narrows Lake 0 10,000…
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…
Telephone Lake commercial project: ? Regulatory approval expected Q1 2014 ? Initial production 90,000 bbls/d (phases A & B) ? Project SOR - 2.1 ? Peak production capacity 300,000+ bbls/d Borealis region: ? Contingent resources -…
Upstream operating cash flow 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013F 2014F 2015F Oil sands Conventional oil Natural gas Conventional oil includes Pelican Lake and NGLs. 2013F based on commodity price assumptions as…
? ~70% fee lands ? >20% IRR ? Payback less than 3 years ? Scalable & flexible capital program ? Diversification of product streams ? Core competency in enhanced oil recovery ? water/polymer flood ? CO 2 sequestration 0.0 0.5…
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…
2013F: ~$1.3 billion in operating cash flow in excess of capital $ billion ? Feedstock advantage & heavy processing capacity drive cash flow ? Minimal annual maintenance capital of $100 - $125 million 2013F based on commodity price…
? West Coast: Trans Mountain - 11,500 bbls/d ? US Gulf Coast: Pegasus, rail, barge - 30,000 bbls/d ? West Coast: Trans Mountain & Northern Gateway up to 175,000 bbls/d ? US Gulf Coast: Keystone XL & Enbridge US Gulf Coast access…
? Rail opens new markets not currently pipeline connected ? Ability to move wider variety of crudes ? Pricing uplift exceeds rail costs ? Expect to rail bitumen blend in late 2014 bbls/d Targeting up to 10% of marketable volume by…
? Strong financial health ? Sustainable pace of development ? Reliable, predictable cash flow to support payments ? Ongoing capital discipline 0.00 0.20 0.40 0.60 0.80 1.00 2011 2012 Q1-Q3 2013 $0.80 $0.88 $0.726 Q4-2013F…
2013 milestones Q1 Grow reserves & contingent resources ??? Progress procurement, engineering & ground work at Narrows Lake project ? Drill 350 to 400 stratigraphic test wells & assess results ? Submit regulatory application for…
0 40 80 120 160 200 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Foster Creek Christina Lake Oil sands production Mbbls/d Production is shown before royalties on a gross basis. Our manufacturing…
Project phase Regulatory status First production target Expected production capacity (bbls/d) gross Foster Creek1 A ? E 120,000 F2 Approved Q3-2014F 45,000 G Approved 2015F 40,000 H Approved 2016F 40,000 J Submitted Q1-2013 2019F…
0 100 200 300 400 500 2010 2011 2012 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F Emerging plays Narrows Lake Christina Lake Foster Creek Actual Mbbls/d Actual volumes are shown before royalties and on a…
0 20 40 60 80 100 120 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Mbbls/d Production is shown on a gross basis. Operational excellence at Foster Creek 96% utilization in 2012
0 20 40 60 80 100 120 140 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Mbbls/d Production is shown on a gross basis. Ramping up to full production in 6 - 9 months Christina Lake phases A - C & start-up of D
0 80 160 240 320 400 480 560 640 2010 2011 2012 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F June 2010 plan June 2013 plan Mbbls/d Foster Creek & Christina Lake gross production capacity Increasing…
$2 - $3/bbl Growth capital: ? Phase expansion (includes all infrastructure & initial wells) ? Phase debottlenecking & optimization ? Numerator for capital efficiency calculation $6 - $7/bbl Sustaining capital: ? All wells, pads,…
Foster Creek Christina Lake Narrows Lake Grand Rapids Telephone Lake Working interest 50% 50% 50% 100% 100% Potential size (Mbbls/d gross) 310 310 130 180 300+* Design SOR 2.1 1.7 2.1 SAGD 1.6 SAP 3.0 - 3.5 2.1 Supply cost (US$/bbl…
Metric Grand Rapids Telephone Lake Working interest 100% 100% Peak production capacity (bbls/d) 180,000 300,000 + Design SOR 3.0 - 3.5 2.1 Economic contingent resource* (Bbbls) 1.7 2.2 Reservoir thickness (meters) 20 - 25 10 - 40…
Wedge Well? technology commercialized in 2010 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 ?…
Dewatering pilot update: ? Purpose is to reduce SOR ? Working as expected ? 4D seismic & well logs indicate we have successfully replaced water & confined air ? ~50% of mobile top water has been displaced in the pilot area to date…
SAGD pilot update: ? Operating for 30 months ? Two well pairs are currently producing ? Second well pair SAGD conversion occurred in mid February Commercial project: ? Regulatory approval expected by the end of 2013 ? 180,000…
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…
7 6 5 4 3 2 1 0 2010 2011 2012 2013F 2014F 2015F $ billions 2013F based on commodity price assumptions outlined in the July 24, 2013 guidance document. 2014F - 2023F based on future price assumptions as noted in the advisory. Cash…
0 25 50 75 100 2012 2013F 2014F 2015F Conventional oil & NGLs Pelican Lake Mbbls/d Production capacity is shown before royalties on a gross basis. 2013F based on midpoints of the July 24, 2013 guidance document. 2014F - 2015F…
Pelican Lake facility Grand Rapids SAGD pilot Hot water injection pilot Greater Pelican Region Mobile Wabiskaw 2.1 billion barrels PIIP Immobile Wabiskaw 1.3 billion barrels PIIP Enhanced oil recovery ? Water & polymer…
$ billion Mbbls/d Operating cash flow is a non-GAAP measure. See advisory for information on Pelican Lake PIIP. Recovery factor is a Cenovus internal estimate. Mobile Wabiskaw Future opportunities ? 2.1 billion bbls PIIP (1.6…
0 200 400 600 800 2010 2011 2012 2013F 2014F 2015F Production ? Significant cash flow with minimal capital investment & low operating costs ? Primarily fee lands ? CBM recompletions have strong returns ? 2013F production 30…
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
Managing Canadian heavy crude congestion in 2013 Mbbls/d Managed price exposure ? hedging contracts ? transportation commitments ? marketing arrangements Integrated volumes ? heavy oil processing capacity 0 40 80 120 160 200…
? Supports infrastructure expansion for greater market access ? Provides secure access to new markets ? Defines costs for an agreed period ? Opportunity for preferred terms & tolling as anchor shipper Benefits of firm…
0 200 400 600 800 1,000 1,200 1,400 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F Cenovus FCCL partner Total marketable production Mbbls/d 2013F production based on midpoint of the July 24, 2013 guidance…
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 ?…
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 ? $665 million in 2012 ? 10% increase for…
Focus on building NAV Economics ? supply cost ? IRR > 15% ? NPV9 ? payback period Strategic ? materiality, timeline, project risk Cenovus defines supply cost as the commodity price (WTI or NYMEX) required to generate an after-tax…
*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 15 years ? $3.0 billion committed undrawn credit facility maturing…
Target range 0.0 0.5 1.0 1.5 2.0 2012 2013F 2014F 2015F Debt to adjusted EBITDA* Net debt to adjusted EBITDA* Target range Debt to capitalization ratios Debt to adjusted EBITDA ratios Times Average (2016F - 2023F) Average…
Hedges at June 30, 2013 Volume hedged Production 2013F Volume % hedged Crude (Mbbls/d) 37 183 20% Natural Gas (MMcf/d)? 166 515 32% *Average Brent hedge price of US$108.31/bbl. **Average NYMEX hedge price of US$4.64/Mcf. ? 164…
July 24, 2013 Foster Creek Christina Lake Narrows Lake Total December 2012 July 2013 update December 2012 July 2013 update December 2012 December 2012 July 2013 update Production (Mbbls/d) 55 - 60 52 - 57 47 - 52 102 - 112 99 - 109…
December 2012 July 2013 update Total cash flow ($ billions) (1) 3.1 - 4.0 - per common share, diluted ($/share) 4.05 - 5.20 Operating cash flow ($ billions) (1) 4.1 - 5.0 Total capital expenditures ($ billions) 3.2 - 3.6 3.3 - 3.5…
^ Steepbank East McMurray Telephone Lake Grosmont Grand Rapids Foster Creek Proper Narrows Lake West Kirby Winefred Lake Christina Lake Proper Wabiskaw BOREALIS REGION GREATER PELICAN REGION CHRISTINA LAKE REGION FOSTER…
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