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November 2017 Corporate Presentation – Cenovus Energy Inc.

Cenovus Energy Inc. · Nov 2, 2017 · 47 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 2017 Corporate Presentation – Cenovus Energy Inc. – slide 1
  2. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 2
    Note: Values are approximate. (1) Forecast production based on November 1, 2017 guidance and reflects pro rata volumes as the acquisition closed May 17, 2017. (2) See advisory. *Includes an additional 0.5 million net acres of exclusive…
  3. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 3
    Delivering on our potential Note: Sanctioning decisions are contingent upon successful completion of planned asset sales and deleveraging. CSAP refers to Cenovus?s conventional steam driven process with solvent injection up to 20 wt.%.…
  4. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 4
    Short-cycle, high IRR potential in the Deep Basin Low-cost expansion potential in oil sands 0 50 100 150 200 250 2017F 2018F 2019F 2020F 2021F Deep Basin production (MBOE/d) 200 250 300 350 400 450 2017F 2018F 2019F 2020F…
  5. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 5
    A compelling five-year outlook ? Targeting $4.0 - $5.0 of announced asset sales in 2017 ? announced sales agreements for Greater Pelican Lake, Suffield and Palliser assets for combined gross proceeds of approximately $2.8 billion ?…
  6. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 6
    Targeting $1 billion of cumulative synergies Note: See Advisory. Capital efficiencies ? Supply chain benefits driven by increased size and scale ? Re-designed well pads ? Longer-reach horizontal wells ? Multi-well pad development…
  7. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 7
    Capital allocation priorities Note: The above reflects our intended capital allocation priorities in the indicated WTI price environments. See Advisory. Stress case (< US$40/bbl WTI) Total capital ($ billions) $1.5 - $1.8 Safe &…
  8. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 8
    Liquidity position supports resilience Note: $4.5 billion of asset sale proceeds represents the midpoint of targeted range of $4.0 - $5.0 billion. Liquidity positions as at September 30, 2017. See Advisory. Liquidity position Near-term…
  9. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 9
    Demonstrated track record of asset sales Note: See Advisory. Targeting $4.0 - $5.0 billion announced by year end Deep Basin GORRs Infrastructure assets Marten Hills Oil sands GORR Non-core Deep Basin assets Pelican Lake (closed)…
  10. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 10
    Cost reductions improve sustainability Note: See Advisory. Oil sands sustaining capital Oil sands operating costs General & administrative costs $0.00 $3.00 $6.00 $9.00 $12.00 $15.00 2014 2017F 2018F 2021F $/bbl ? > 50%…
  11. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 11
    Sustainability drives free funds flow Source: Peters & Co. Limited. Peers include: APA, CNQ, CPG, DVN, ECA, EOG, HSE, IMO, SU, TOU, VII. See Advisory. Low corporate decline rates Improved sustainability Free funds flow growth over time…
  12. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 12
    0% 5% 10% 15% 20% 25% 30% 0 3 6 9 12 15 18 21 24 Months on production E20 PAD (2008) E15 PAD (2009) W02 PAD (2011) E08 PAD (2013) W08 PAD (2015) W07 PAD (2016) W10 PAD (2016) W05 PAD (2016) W18 PAD (2016) W23 PAD (2016) W15 PAD…
  13. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 13
    ? Superior start-up and steam circulation methods ? Advanced sub-surface equipment and design ? High pressure ramp up 2011 4D, or time-lapse seismic, can be acquired to determine changes in reservoir over an extended period. Lower…
  14. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 14
    500 1,000 1,500 2,000 2,500 3,000 3,500 1 31 61 91 121 151 181 211 241 Day Average 1,400m well Average 965m well Christina Lake H09 pad ? 6 well pairs at 1,600m H-09 p ? Improved conformance allows us to drill longer wells…
  15. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 15
    Redesigned well pads drive cost improvements Improvements provide sustainable reduction in F&D Transaction Redesigned well pisa dfu allty C fhinraisntcinead Lake ? Improved modular and scalable design for well pairs and pads ?…
  16. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 16
    Redesigned well pads Lower F&D Targeting $8 ? $10/bbl ? Improved modular & scalable design ? Scope reduction reduces costs ? Reduced well pad footprint Improved well design ? Quicker start-up ? Better conformance and faster…
  17. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 17
    2.1 2.8 3.6 3.1 5.2 2.0 2.3 4.0 4.0 3.8 3.0 1.0 2.0 3.0 4.0 5.0 6.0 0 100 200 300 400 1 2 3 4 5 6 7 8 9 10 11 Average production Portfolio-weighted SOR SOR reflects resource quality and execution Note: Production…
  18. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 18
    0 25 50 75 100 125 150 175 200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F Mbbls/d Christina Lake overview Note: Production is shown before royalties on a gross basis. 2017F…
  19. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 19
    Christina Lake phase G project profile 0 10 20 30 40 50 60 2017F 2018F 2019F 2020F 2021F 2022F 30% 45% 20% 5% $0 $100 $200 $300 $400 $500 2017F 2018F 2019F 2020F 2021F 2022F Christina Lake phase G capital profile ($…
  20. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 20
    Current productive capacity phases A-G (bbls/d) 180,000 Regulatory approved capacity (bbls/d) 295,000 Reservoir depth ~450 meters Net pay 25 ? 30 meters High permeability 5 ? 10 darcies High oil saturation ~80% API bitumen 9? ? 11?…
  21. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 21
    Note: After-tax IRR based on go-forward spending and flat US$55/bbl WTI. See Advisory. Illustrative Foster Creek phase H project profile 0 10 20 30 40 50 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 5% 40% 40% 15% $0 $100 $200…
  22. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 22
    Note: After-tax IRR based on go-forward spending and flat US$55/bbl WTI. See Advisory. Illustrative Narrows Lake phase A project profile 0 25 50 75 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 25% 30% 25% 15% 5% $0 $200 $400…
  23. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 23
    Solvents expected to create value and reduce emissions intensity ? Decreases SOR by ~30% - 35% ? Increases individual well production rates up to 10% ? Increases growth capital 15 - 20% ? Decreases sustaining capital by 10 - 30% ?…
  24. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 24
    Deep Basin provides second growth platform Note: See Advisory. Overview of Deep Basin ? One of the largest Deep Basin land positions ? Three core operating areas: Elmworth-Wapiti, Kaybob-Edson, and Clearwater ? Low decline…
  25. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 25
    No near-term takeaway constraints Asset overview Deep Basin infrastructure map ? ~1.4 BCF/d of net natural gas processing capacity and significant associated gathering infrastructure ? Infrastructure footprint spans the Deep Basin ?…
  26. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 26
    Source: Peters & Co. E&P Overview Tables report and company disclosures. See Advisory. 2017F production 2017F decline rate 0 50 100 150 200 250 300 TOU VII CVE PEY MBOE/d ? 17% decline rate is a competitive advantage ? Reduces…
  27. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 27
    Source: Peters & Co. E&P Overview Tables report and company disclosures. 2P reserves evaluated by GLJ as of March 22, 2017. See Advisory. Net acreage Drilling opportunities / 1,000 acres 0 500 1,000 1,500 2,000 2,500 3,000 3,500…
  28. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 28
    Over a decade of future drilling opportunities Note: See Advisory for key underlying assumptions and risks and a description of the metrics provided above. ~1,500 potential drilling opportunities identified Targeted type well…
  29. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 29
    Note: Formation rights (net acres) by area. Spirit River formation includes the Notikewin, Falher, and Wilrich. Upside potential from stacked pay Target formations Formation Elmworth Wapiti Kaybob Edson Clearwater Totals Cardium…
  30. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 30
    Focus on high quality and low risk locations Initial drilling plans through March 2018 focused on development and appraisal 2017 - 2018 drilling June July August September October November December January February March Elmworth /…
  31. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 31
  32. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 32
    Pipestone Montney development opportunity Pipestone Montney development plans Pipestone Montney acreage position ? ~25k gross acres with ~95% working interest ? thick 200m Montney interval with stack potential ? initial liquids yields…
  33. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 33
    Wapiti Falher development opportunity Wapiti Falher development plans Wapiti Falher development plans ? Tight gas sand play with attractive economics ? continuation of the Falher trends northwest of established development in Kakwa ?…
  34. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 34
    Kakwa Falher development opportunity Kakwa Falher development plans Kakwa Falher development plans ? One of the most economic plays in Western Canada ? stacked shoreface and fluvial channel play ? ~78,000 gross acres with ~65% working…
  35. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 35
    Edson Wilrich development opportunity Edson Wilrich development plans Edson Peco-Wolf development plans ? Emerging top quartile play in the Deep Basin ? ~150,000 net acres, majority of which is 100% working interest ? Planning first…
  36. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 36
    Clearwater Spirit River development plans Clearwater Spirit River development plans ? Proven top quartile play in the Deep Basin with high industry activity levels ? significant liquids potential of 40 ? 100 bbls/MMcf ? ~170,000 net…
  37. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 37
    Takeaway capacity provides certainty ? Cenovus has no near term takeaway capacity issues ? West Coast: Trans Mountain ? US Gulf Coast: Enbridge USGC/Flanagan South ? Bruderheim rail facility provides incremental optionality ?…
  38. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 38
    Deep Basin takeaway capacity and marketing Potential for growth and synergies with oil sands Current firm receipt capacity exceeds production levels ? Current firm receipt capacity exceeds forecast production levels ? sufficient…
  39. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 39
    Hedges at October 25, 2017 Volume Price Crude ? Brent Collars January ? June 80,000 bbls/d US$49.54/bbl ? US$59.86/bbl Crude ? Brent Fixed Price January - June 60,000 bbls/d US$53.34/bbl Crude ? Brent Put Contracts January ? June…
  40. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 40
    Refinery complexity drives margins Integration through the cycle ? Refining assets help to mitigate exposure to wider light/heavy differentials ? Approximately 25% of total blended heavy oil volumes are mitigated with processing…
  41. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 41
    Refining operating margin sensitivities -$250 $0 $250 $500 $750 $1,000 $1,250 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 Chicago crack spread - US$/bbl US$20/bbl US$15/bbl US$10/bbl Refining operating margin net (LIFO basis)…
  42. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 42
    Creating value through social and governance performance ? SER Committee of the Board provides oversight of environment and sustainability performance ? Enterprise Risk Management program, practices and policy help ensure active and…
  43. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 43
    Advancing our environmental performance ? Rigorous regulatory framework ensures environment considerations throughout project lifecycle ? Dedicated internal environment team focused on mitigating environmental risks ? Ongoing…
  44. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 44
    Telephone Lake Foster Creek Proper Narrows Lake West Kirby Winefred Lake Christina Lake Proper BOREALIS REGION CHRISTINA LAKE REGION FOSTER CREEK REGION Hardy Leismer Alberta Saskatchewan Fort McMurray Grosmont Wabiskaw/…
  45. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 45
    2017 Corporate Guidance - C$, before royalties November 1, 2017 Guidance of all operating metrics includes forecast impacts of the acquisition effective May 18, 2017 UPSTREAM OIL SANDS Production Capital expenditures Operating costs…
  46. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 46
    Capital expenditures ($ millions) 340 - 360 1.20 - 1.30 4 - 6 350 - 376 655 - 695 459 - 492 1,315 - 1,420 170 - 180 8.00 - 9.00 Marketing & transportation 10 - 20 35 - 50 Upstream DD&A ($ billions) 1.6 - 1.8 1.55 - 1.65 Other…
  47. November 2017 Corporate Presentation – Cenovus Energy Inc. – slide 47
    Investor relations contacts Kam Sandhar Vice-President, Investor Relations & Corporate Development kam.sandhar@cenovus.com 403.766.5883 Steven Murray Manager, Investor Relations steven.murray@cenovus.com 403.766.3382 Graham…

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