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November 2016 Investor Presentation – Cenovus Energy Inc.

Cenovus Energy Inc. · Nov 11, 2016 · 26 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. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 1
  2. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 2
    About Cenovus Oil sands Oil sands drilling projects in northern Alberta Refineries 50 percent ownership in two U.S. refineries Conventional assets Established conventional oil and natural gas assets in Alberta and Saskatchewan…
  3. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 3
    0% 10% 20% 30% 40% 50% 60% - 2 4 6 8 10 12 14 Net debt to capitalization ratio* Total liquidity ($ billions) Liquidity position supports financial resilience *Non-GAAP measure. See advisory. Total liquidity reflects unused…
  4. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 4
    0 500 1,000 1,500 2019 2022 2023 2039 2042 2043 US$ millions Debt maturity profile *Non-GAAP measure. See advisory. Net debt calculated as total debt less cash and cash equivalents. Credit ratings and outlooks at October 27,…
  5. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 5
    Becoming a low cost energy producer Targeting 30% reduction from 2014 levels ? 21% reduction to G&A ? Improved efficiencies, workforce optimization and discretionary spending ? 32% reduction to oil sands opex ? Sustainable cost…
  6. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 6
    $7.0 $9.4 5.0 6.0 7.0 8.0 9.0 10.0 2014 basis Drilling Completions Pipelines Well pads Earthworks Tie-in Future basis Targeted SAGD well cost reductions* $ million/well pair Examples ? Demonstrated a 30% reduction in the…
  7. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 7
    Improving sustainability 9 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 2014 2015 2016F C$ billions Growth capital Dividend Sustaining capital WTI breakeven US$65 ? $75/bbl WTI breakeven US$55 ? $60/bbl WTI breakeven US$45 ? $50/bbl…
  8. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 8
    0 50 100 150 200 250 300 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F Foster Creek Christina Lake Oil sands production Mbbls/d Production is shown before…
  9. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 9
    0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 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 Steam to oil…
  10. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 10
    Source: IHS. Peer projects include: Algar, Christina Lake, Cold Lake, Edam East, Firebag, Hangingstone, Jackfish, Kirby South, Leismer, Long Lake, MacKay, Orion, Paradise Hill, Peace River, Pikes Peak South, Pod 1, Primrose Wolf Lake,…
  11. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 11
    Mbbls/d 0 20 40 60 80 100 120 140 160 180 200 220 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 production capacity…
  12. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 12
    0 20 40 60 80 100 120 140 160 180 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Mbbls/d Foster Creek daily production…
  13. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 13
    8 7 6 5 4 3 2 1 0 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 SOR Oil production (boe/d) Foster Creek mature east…
  14. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 14
    0% 2% 4% 6% 8% 10% 0 50 100 150 200 250 300 350 Days on production W08(2015) (2008) E20 ? Despite the E20 (2008) pad having superior quality, improving conformance on new pads of lesser quality such as the W08 (2015) pad, has…
  15. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 15
    $ billion Conventional assets Conventional oil and natural gas ? 2016F production of 56 Mbbls/d and 393 MMcf/d ? Provided over $5.0 billion of operating free cash flow* since 2010 ? Portfolio includes both free cash flow and growth…
  16. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 16
    20 Southern Alberta tight oil Large inventory of multi zone tight oil locations on Southern Alberta lands ? Over 1,200 sections of leased and available Mannville oil lands ? 10-year option exclusive to Cenovus ? attractive lease…
  17. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 17
    22 Mitigating heavy oil differentials 0 50 100 150 200 250 300 2014 2015 2016F* Integrated volumes: - heavy oil processing Managed price exposure: - hedging contracts (financial and physical) Mbbls/d % of blended heavy…
  18. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 18
    Current pipeline access ? West Coast: Trans Mountain ? 11,500 bbls/d ? US Gulf Coast: Enbridge USGC/Flanagan South 75,000 bbls/d Potential pipeline commitments ? US Gulf Coast: TCPL Keystone XL ? 75,000 bbls/d ? East Coast: TCPL…
  19. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 19
    ? Long-term optionality to ship 10% ? 20% of corporate volumes by rail ? Taken delivery of 825 coiled and insulated rail cars ? Secured 70,000 bbls/d of loading capacity between: ? Bruderheim Energy terminal (Edmonton) ? USDG/Gibsons…
  20. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 20
    25 Taking steps to preserve financial strength 2015 Q1 Q2 Q3 2016 Q1 Capex $700MM reduction Balance sheet $1.5B equity issue Workforce reduction of 800 Operating costs decline 23% YoY Heritage Limited Royalty Partnership…
  21. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 21
    Capital Total capital ~$11 - $14/bbl full cycle $2 - $3/bbl Growth capital ? Phase expansion (includes all infrastructure and initial wells) ? Phase debottlenecking and optimization ? Numerator for capital efficiency calculation $9…
  22. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 22
    SAGD portfolio provides development opportunity and growth potential Totals may not add due to rounding. For additional information about our economic contingent resources please see the advisory. There is uncertainty that it will be…
  23. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 23
    SAP at Narrows Lake Narrows Lake project area Christina Lake core Christina Lake region Narrows Lake commercial project SAP ? First commercial SAGD project to incorporate solvent aided process (SAP) ? Evaluating development…
  24. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 24
    Telephone Lake commercial project ? Regulatory approval received in 2014 ? Continuing engineering work; assessing development options ? Estimated project SOR ? 2.1 ? Expected initial production capacity 90,000 bbls/d (phases A & B) ?…
  25. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 25
    32 Mitigating financial risk Forward hedge contracts as at October 25, 2016 Hedge position Hedge price Volume % hedged and average price (2) 2016 Crude ? Brent Fixed Price October ? December October - December 10,000 bbls/d 5,000…
  26. November 2016 Investor Presentation – Cenovus Energy Inc. – slide 26
    Illustrative SAGD netbacks 34 Heavy differential Quality differential Cost of condensate Royalties Transportation Operating costs Netbacks* Heavy differential Quality differential Cost of condensate Royalties Transportation…

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