About Cenovus Note: Values are approximate. 2018F production based on the midpoint of October 30, 2018 guidance. 1 2018F total natural gas includes production from the Deep Basin and Cenovus’s Athabasca natural gas asset. See advisory.…
Strong free funds flow potential 2019F adjusted funds flow projected to increase Attractive free funds flow yield • Year to date financial results demonstrate strength and flexibility of underlying operations • managed through price…
Demonstrating disciplined capital allocation Return to shareholders • Dividends • Share repurchases Targeting consistent growth in total shareholder returns Sustain current assets and dividend Invest in high-return growth projects…
Continuing to streamline the asset portfolio Note: See Advisory. ? Continuing to evaluate portfolio for non-core divestitures ? Deep Basin non-core Clearwater assets currently being marketed Evaluating non-core assets Track record on…
Maintaining financial resilience and flexibility Note: Liquidity positions as at September 30, 2018. See Advisory. Liquidity position Near-term debt reduction • Targeting net debt to adjusted EBITDA < 2.0x • ~$6.4 billion liquidity…
Cost reductions improve sustainability Note: General & administrative costs include stock based compensation but exclude one-time severance and non-cash onerous lease charges. See Advisory. Oil sands sustaining capital Oil sands…
Oil sands generate strong margins through the cycle 2019F operating margin and sustaining capital at various commodity prices 4 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 US$40/bbl WTI US$50/bbl WTI US$60/bbl WTI US$70/bbl WTI US$80/bbl WTI…
Improved start-up procedures on new pads Improved performance Foster Creek well performance improving • Longer reach horizontal well pairs Recovery factor • Drilling improvements • Inflow/outflow control devices • Improved start-up…
Improved conformance allows longer horizontal wells 211 241 271 301 331 361 391 421 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…
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 •…
Foster Creek estimated capital savings of $500 million After: • 8 pads • 66 wells • ~$600 million • 220 MMbbls recoverable Before: • 18 pads • 120 wells • ~$1.1 billion • 200 MMbbls recoverable Improved conformance, longer…
Christina Lake estimated capital savings of $800 million Before: • 19 pads • 213 wells • ~$1.6 billion • 310 MMbbls recoverable After: • 13 pads • 105 wells • ~$800 million • 310 MMbbls recoverable Improved conformance, longer…
SOR reflects resource quality and execution Note: Production data and steam-oil ratio based on AER data as of August 2018. Portfolio-weighted SOR calculated based on project operator and is a measure of current project efficiency. Peers…
Demonstrating top quartile oil sands operating costs Source: Company reports. Peers include ATH, CNQ, HSE, MEG, and SU. Q2 2018 oil sands operating costs per barrel Operating costs ($/bbl)
Current productive capacity phases A-G (bbls/d) 180,000 Foster Creek production history Regulatory approved capacity (bbls/d) 295,000 Reservoir depth ~450 meters Net pay 25 – 30 meters High permeability 5 – 10 darcies High oil…
Christina Lake overview Note: Production is shown before royalties on a gross basis. 2018F production based on the midpoint of October 30, 2018 guidance. 2P reserves as of December 31, 2017. See Advisory. Phase Phase B A Phase C…
Phase G builds on Christina Lake success Note: Capital spent to date as of December 31, 2017. Go-forward capital efficiency based on forecasted remaining capital required at time of reactivation (Q1 2017) and project oil capacity. See…
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 by 15% - 20% • Decreases sustaining capital by 10% -…
Deep Basin provides second production platform • Three core operating areas across approximately 3 million net acres • 2018F production: 120,500 BOE/d (26% liquids; 17% decline rate) • ~1.3 BCF/d of net natural gas processing capacity…
Driving efficiencies in Deep Basin operating costs Source: Company reports. Peers include AAV, ARX, BIR, BNP, BXE, CNQ, CR, ECA, HSE, KEL, NVA, PEY, PONY, POU, TOU, and VII. Q2 2018 operating costs for Deep Basin and Montney peers…
Oil sands royalties Net profits royalty rate formula Gross revenues royalty rate formula• Foster Creek and Christina Lake are post-payout projects • Royalty calculation is annualized using the greater of gross revenues or net profits…
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…
Mitigating our exposure to wider heavy differentials Marketing in excess of 500 Mbbls/d Near-term mitigation options Long-term mitigation options 0 100 200 300 400 500 600 700 Dry bitumen production capacity Blended heavy…
Refining capacity mitigates heavy oil differentials • Refining assets help to mitigate exposure to wider light-heavy differentials • Approximately 25% of total blended heavy oil volumes are mitigated with processing capacity • Wood…
Typical crude slate and product yield Crude feedstock Refined products Wood River Borger Heavy Medium sour Light River Borger Gasoline Distillate Other Refined products Crude feedstock
Refining operating margin sensitivities Note: Based on pricing as per October 30, 2018 guidance document as a basis, and assumes no unplanned downtime or external disruptions. RINs assumed at approximately US$0.30 cpg. $0 $250 $500…
Takeaway capacity reduces market access risk • Cenovus takes a portfolio approach to maximize the value of every barrel • West Coast: Trans Mountain • US Gulf Coast: Enbridge USGC/Flanagan South • Mid-continent (Wood River): Express…
Bruderheim provides strategic optionality Ramping up crude by rail Strategic location provides optionality MEG upgrading pilot Manifest operations area Unit train operation Rail lines Bruderheim Energy Terminal Pipeline…
Hedging summary Current hedge positions for 2019 Hedges at September 30, 2018 Terms Volumes Average price Crude – WTI Collars January – December 19,000 bbls/d US$50.00 – US$62.08/bbl Current hedge positions for 2018 Hedges at…
Creating value through corporate responsibility • SER Committee of the Board provides oversight of environment and sustainability performance • Enterprise Risk Management program, practices, and policy help ensure active and effective…
Advancing our carbon and environmental performance • Rigorous regulatory framework ensures environment considerations throughout project lifecycle • Dedicated internal environment team focused on mitigating environmental risks •…
Supplemental terms of the ConocoPhillips’ transaction • Based on a 5-year time horizon, with a threshold price of $52/bbl Western Canadian Select (“WCS”) • Calculation based on $6 million per quarter multiplied by the difference…
^ Steepbank East McMurray Telephone Lake Foster Creek Proper Narrows Lake West Kirby Winefred Lake Christina Lake Proper BOREALIS REGION CHRISTINA LAKE REGION FOSTER CREEK REGION Hardy Leismer Alberta Saskatchewan Fort…
2018 Corporate Guidance - C$, before royalties Total natural gas (2) 530 - 550 481 - 509 1,060 - 1,145 Total liquids 393-417 Total upstream 481 - 509 Capital expenditures ($ Millions) Production (Mbbls/d, MMcf/d,MBoe/d) Operating…
PRICE ASSUMPTIONS & ADJUSTED FUNDS FLOW SENSITIVITIES (8) Brent (US$/bbl) $74.70 $68.00 $41.60 $2.95 $1.50 $16.30 $0.78 Independent base case sensitivities Increase Decrease WTI (US$/bbl) (for the fourth quarter of 2018) ($ millions)…
Loading...
