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FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc.

Cenovus Energy Inc. · Mar 8, 2012 · 58 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. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 1
    FirstEnergy Capital East Coast Energy Conference Harbir Chhina Executive Vice-President, Oil Sands New York March 8, 2012
  2. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 2
    Cenovus: Building from a strong base Tickers TSX, NYSE CVE Enterprise value 32 billion Shares outstanding 754 MM 2012F production Oil & NGLs 163 Mbbls/d Borealis Greater Pelican Natural gas 588 MMcf/d Lake Region Region Christina…
  3. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 3
    Providing sustainable, predictable oil growth Mbbls/d 500 Bitumen Pelican Lake Other oil & NGLs GR 400 CA 21F 14% 20 1 201 300 200 100 0 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F Volumes…
  4. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 4
    Integrated oil drives operating cash flow* 100% 80% 85% 80% 60% Price Exposed 165 MMcf/d 64% (25%) 40% 20% 0% 2010 2011 2012F Foster Creek & Christina Lake Pelican Lake Conventional oil & other Refining &…
  5. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 5
    Why were successful how we do it Top quality reservoirs Manufacturing approach & project execution Operational excellence Technological innovations Top quality people
  6. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 6
    Advancing oil sands projects Regulatory First production Project phase Expected production capacity (bbls/d) gross application filings1 target1,2 Foster Creek3 A E4 120,000 F4 Q2-2009 2014 45,000 G4 Q2-2009 2015 40,000 H4 Q2-2009…
  7. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 7
    Leading capital efficiency Foster Creek Christina Lake /bbl/d /bbl/d 30,000 30,000 Actual costs Projected costs Actual costs Projected costs 20,000 20,000 10,000 10,000 0 0 A B C D&E FG&H* A&B CD&E FG&H 20Mbbls/d…
  8. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 8
    Reservoir quality drives performance Steam-to-oil ratio Low SOR means (bbl/bbl) Lower capital cost 8 Lower operating cost Smaller surface footprint 6 Lower energy usage Lower emissions Less water usage 4 2 0 Peer Peer…
  9. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 9
    2012F oil sands Foster creek Foster Creek Christina Lake Production (Mbbls/d) 53 57 26 29 Capital ( MM) 650 700 475 575 Operating costs (/bbl) 11.25 12.45 13.00 14.35 SOR 2.0 2.2 1.9 2.1 Forecasts shown are net to Cenovus…
  10. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 10
    Focusing on operational excellence Mbbls/d Foster Creek daily production ISOR Capacity 4.0 120 Turnaround 3.5 100 3.0 80 2.5 2.0 60 1.5 40 1.0 20 0.5 0 - 1-Jan-11 1-Apr-11 1-Jul-11 1-Oct-11…
  11. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 11
    Improving start-up performance Mbbls/d Christina Lake phases A, B & ramp up of C ISOR 60 5.00 Capacity 4.50 50 4.00 3.50 40 3.00 30 2.50 2.00 20 1.50 Turnaround 1.00 10 0.50 0 0.00 1-Jan-11 1-Apr-11 1-Jul-11…
  12. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 12
    2012F - Pelican Lake Production (Mbbls/d) 23 26 Capital ( MM) 525 575 Operating costs (/bbl) 14.55 16.10 Forecasts based on December 7, 2011 guidance document.
  13. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 13
    Pelican Lake tremendous growth opportunity Mbbls/d 100 Opportunity to apply Grand Rapids + hot water flood technology to grow Polymer/infill production 80 Waterflood Primary 60 40 20 0 1998 2000 2002 2004 2006 2008…
  14. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 14
    Advancing our emerging projects Regulatory approval Construction Steam & production Production capacity bbls/d net Narrows Lake 65,000 Grand Rapids 180,000 Telephone Lake* 90,000 2010 2011 2012 2013 2014…
  15. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 15
    Managing our conventional assets 2012 objectives: Growing liquids production by 17% Expanding conventional oil Optimizing natural gas minimal natural gas investment, ALBERTA SASKATCHEWAN strong cash flow Improving reliability…
  16. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 16
    Refining assets are key to integration Wood River 306 Mbbls/d crude capacity 200 - 220 Mbbls/d heavy crude 85% clean product yield Borger 146 Mbbls/d crude capacity 35 Mbbls/d heavy crude 89% clean product yield 2012F operating…
  17. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 17
    Building flexibility into capital programs billions 7 Discretionary capital Cash flow* Committed capital 6 5 4 3 2 1 0 Average 2010 2011 2012F 2013F 2014F 2015F (2016F - 2021F) 2012F based on commodity price…
  18. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 18
    Focused on increasing total shareholder return Oil resource Project Financial Building NAV Building base execution strength NAV Dividend growth
  19. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 19
    Supplemental information
  20. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 20
    Cenovuss value pledge Deliver on commitments Achieve step change in net asset value Sustain decades of growth with manufacturing model Focused on increasing total shareholder return
  21. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 21
    Cenovus SAGD operating experience Mbbls/d 150 % 25 ) 11 7 125 00 (2 R CAG r 100 5y 75 50 25 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Foster Creek Christina Lake Production is…
  22. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 22
    Growing bitumen Year-end production capacity (Mbbls/d) 500 Emerging plays Christina Lake 400 Foster Creek R CAG 21F 20% 20 Annual production 1 201 300 200 100 0 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F…
  23. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 23
    Delivering on our commitments 2011 Added significant reserves & contingent resources Q1 Executed strat well program: 440 wells Sanctioned Foster Creek F, G & H Received results from 2011 strat well & seismic programs Q2 Updated…
  24. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 24
    Advancing oil growth with strong execution 2012F Disclose 2011 reserves & contingent resource Execute seismic & strat well program Q1 Establish Telephone Lake dewatering pilot Provide update on Telephone Lake & area strategic…
  25. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 25
    Generating sustainable growth for decades Increased resource base Evolved technology to build value Improved our execution Stratigraphic well programs Investment in technology strat wells MM 600 300 400 200 200 100 0 0…
  26. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 26
    Building NAV by converting resources Discovered BIIP 56 Bbbls 1P 2P Undiscovered BIIP* 2C 82 Bbbls 8.2 Bbbls 137 Bbbls 10.1 Bbbls *Undiscovered BIIP is unrisked. Volumes are shown before royalties and on a net basis.
  27. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 27
    Applying manufacturing expertise Utilize dedicated in- house construction management teams Employ multiple small contractors Develop projects in staged, manageable phases Operate assembly-line drilling & completions Reduce…
  28. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 28
    Phased design approach Template design 4 boiler packages same for Foster Creek and Christina Lake Generally 3 phases designed together First project construction takes 30 months following 2 phases follow 12 months apart…
  29. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 29
    Putting innovation into practice Nisku module fabrication yard
  30. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 30
    Oil sands overview Foster Creek Pilot project began in 1996 Became the industrys first commercial SAGD project in 2001 largest producing SAGD operation in Alberta Pioneered use of Wedge WellTM technology Achieved royalty payout in…
  31. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 31
    Oil sands project comparison Christina Telephone Foster Creek Narrows Lake Grand Rapids Lake Lake Working interest 50% 50% 50% 100% 100% Potential size 290 310 278 130 180 90 (Mbbls/d gross) 2.1 SAGD Design SOR 2.1 1.7 3.0 3.5…
  32. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 32
    Updated bitumen contingent resources Best estimate bitumen economic contingent resources (Billion bbls) 2011 2010 2009 Foster Creek Total region 0.9 0.8 0.8 Core & other areas 0.4 0.4 0.4 Christina Lake Narrows Lake 0.4 0.5 0.5…
  33. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 33
    Developing technology to build value Value Blowdown boiler 5 4 Wedge WellTM 3 technology SAP 2 CondenSAP ESP (phase 2) 1 Develop Pilot Commercial Stage 1. ESP (phase 2) early stage enhancement of pump technology 2.…
  34. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 34
    Commercializing one technology per year Solvent pr ocesses ESP (phase 1) Wedge WellTM t echnology Acceler at ed st art -up Chemical Looping Combust ion Blowdown boiler Conf ident ial pr oject Conf ident ial pr oject War m…
  35. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 35
    Wedge WellTM technology commercialized in 2010 Well producer Technology details: < 0.1 average SOR first year production rate of 600 800 bbls/d at Foster Creek, Standard SAGD well pair and current average of 400 bbls/d;…
  36. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 36
    Technology improves performance Foster Creek Mbbls/d ISOR 120 3.4 100 3.1 80 2.8 60 2.5 Wedge WellTM technology reduced SOR: 40 2.2 2.5 - 2.2 20 1.9 0 1.6 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Total…
  37. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 37
    Blowdown boiler commercialized in 2011 Utilizes boiler water (blowdown) as feed water for second boiler SAGD OTSG steam Generates more steam from the same water 77% Improves heat recovery Blowdown Lowers operating costs & 23%…
  38. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 38
    Cenovuss Solvent Aided Process (SAP) SAP versus SAGD metrics Steam only (SAGD) 30% production rate improvement 15% incremental total oil recovery 3% reduction in annual fuel gas usage Steam & solvent (SAP) 0.05 bbls solvent…
  39. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 39
    2012F conventional oil & natural gas Oil & liquids Natural gas Production 53 59 Mbbls/d 575 600 MMcf/d Capital ( MM) 660 725 80 90 Operating costs 14.65 16.25/bbl 1.15 1.30/Mcf Forecasts shown are net to Cenovus based on December…
  40. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 40
    Conventional oil highlights Focus on drilling program Connect key plays to centralized facilities & pipelines Shaunavon 42 wells initiate down-spacing & waterflood pilots Bakken 4 wells initiate water-flood & CO2 pilots Alberta…
  41. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 41
    Shaunavon and Bakken overview Lower Shaunavon 54 net sections 65 producing wells in 2011 3,500 bbls/d (2011 exit) 5 - 10% recovery factor 20 - 25 API medium oil Bakken 140+ undeveloped sections (fee & crown land) 19 producing…
  42. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 42
    Weyburn gross production history Mbbls/d 40 30 20 10 0 Jan-75 Jan-85 Jan-95 Jan-05 Primary & w aterflood Vertical infills Pre CO2 Hz infills Waterflood improvement CO2 EOR EOR = enhanced oil recovery.
  43. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 43
    Supporting pipelines to new markets Proposed pipeline projects Enbridge Northern Gateway (2017 - 2018) Kitima t TMX (2017) Edmonton Hardisty Keystone Vancouver Enbridge Pipelines Anacortes Express/Platte Montral TCPL…
  44. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 44
    Increasing demand for Canadian heavy crude Refining capacity by 2020 MMbbls/d Canada 2.1 Heavy 0.3 PADD IV 0.6 PADD II 3.9 Heavy 0.3 Heavy 1.6 PADD I 1.5 Heavy 0.2 PADD V 3.2 Heavy 0.8 PADD III 8.9 Heavy 2.6 Light…
  45. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 45
    Pipelines essential to Canadian oil growth Mbbls/d Existing & planned pipeline projects 6,500 6,000 Enbridge Northern Gateway 5,500 TMPL Expansion CAPP Supply Forecast (June 2011) 5,400 5,000 Keystone XL (Expansion, Houston…
  46. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 46
    CORE completion adds significant value Objectives leverage Wood Rivers strategic location become a major processor of bitumen-blended heavy oil Value drivers reduces input costs increases clean product yield reduces asphalt…
  47. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 47
    Increasing heavy oil processing & clean product yield % Crude* % Refined products* 100 100 80 80 60 60 40 40 20 20 0 0 2011 2012F 2011 2012F Heavy Medium sour Light Gasoline Distillate Other *Illustrative crude…
  48. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 48
    2012 refinery margin sensitivities Net operating cash flow* ( MM) 900 L - H differential 15.00/bbl 600 L - H differential 10.00/bbl 300 0 10.00 12.00 14.00 16.00 18.00 20.00 22.00 Market crack (US/bbl) Based on…
  49. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 49
    Market vs realized crack spreads /bbl 25 20 15 10 5 0 Market crack Crude 3-2-1 discount Other products Realized crack advantage Crude advantage increases total margin available effectively increasing realized…
  50. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 50
    Understanding refinery performance Market vs realized crack spreads 3 1 0.45 bbls bbl bbl 0.90 2 bbl bbls Clean product yield 85% 1.65 bbls Crude 3-2-1 Refinery Actual refinery Gasoline Diesel Other Market cracks…
  51. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 51
    Managing commodity price risk 2012 Oil hedge positions 2012 Natural gas hedge positions 1P Unhedged* 206 MMcf/d (35%) 2P Unhedged* 114 Mbbls/d WTI NYMEX Fixed (70%) US98.27/bbl 2C 49 Mbbls/d 8.2Fixed AECO/NYMEX Bbbls (30%)…
  52. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 52
    Capital investment focused on oil growth 2012 capital budget: 3.1 - 3.4 B Foster Creek Christina Lake 91% oil-directed* 21% 15% CVE wide New 65% contributes to 6% resource plays growth beyond 2012 Natural gas 12% 3%…
  53. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 53
    Key credit metrics & ratings Credit metrics Target Q4 2011 Q4 2010 Range Debt to capitalization* 27% 29% 30 40% Debt to adjusted EBITDA* 1.0x 1.3x 1.0 2.0x Total debt* 3,527 3,432 Credit ratings Long-term Short-term S&P…
  54. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 54
    Sensitivities to price changes Impact on 2012F Independent sensitivities cash flow* ( millions) WTI oil + US10 185 - US10 (185) NYMEX natural gas + US1 60 - US1 (60) Light-heavy oil differential widens: (WTI WCS) + US5 (15)…
  55. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 55
    Balance sheet strength provides capacity Debt to Capitalization* Debt to Adjusted EBITDA* Percent Times 40% 2.0 Target range Target range 30% 1.5 20% 1.0 10% 0.5 0% 0.0 2010 2011 2012F 2013F 2014F 2015F Average…
  56. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 56
    Our dividend commitment Dividend growth requires: strong financial health sustainable pace of development reliable, predictable cash flow to support payments Dividend yield comparison 6% 5% 4% Full year 2011 2012F 3% 2%…
  57. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 57
    T100 R1W5 R20W4 R15W4 R10W4 R5W4 R1W4 T100 T95 T95 Grosmont Wabiskaw/ McMurray Telephone Lake Steepbank T90 T90 East McMurray Fort McMurray GREATER PELICAN REGION BOREALIS REGION T85 Saskatchewan…
  58. FirstEnergy Capital East Coast Energy Conference – Cenovus Energy Inc. – slide 58
    Investor Relations contacts Susan Grey Director, Investor Relations 403-766-4751 susan.greycenovus.com Graham Ingram Senior Analyst, Investor Relations 403-766-2849 graham.ingramcenovus.com Bill Stait Senior Analyst, Investor Relations…

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