Cenovus: More Than Meets The Eye
Michael Fitzsimmons • 49 Comments
Michael Fitzsimmons • 49 Comments
Thu, Jul. 28, 2:02 PM
Wed, Jun. 8, 2:24 PM
- The wildfires in Alberta are again affecting crude oil production, as Cenovus Energy (CVE -2.8%) and Canadian Natural Resources (CNQ -3.2%) evacuate oil facilities near Pelican Lake.
- Flames advanced yesterday to within 1 km of CVE's main Pelican Lake complex, forcing the company to shut down its heavy oil plant and evacuate 118 staff; the site produced ~23K bbl/day of heavy oil during Q1.
- CNQ also temporarily halted some production at its 49K bbl/day Pelican Lake operations and evacuated non-essential staff.
- Further north, oil sands producers have begun restarting operations after the fires forced last month's shutdown of more than 1M bbl/day of production in the Fort McMurray region; ConocoPhillips (COP +0.2%) says 10% of its wells have been activated at its 60K bbl/day Surmont project, with most of its ~700 employees expected onsite by the end of this week.
Mon, May 9, 3:19 PM
- Crude oil prices erased all of Friday's gains and more, as June futures ended the pit session 2.7% lower to $43.55/barrel even as the massive wildfires in the heart of Canada's oil sands continue to spread, albeit more slowly.
- But positioning in the oil market is very stretched, and analysts say speculators already hold the largest number of wagers for a rise in WTI futures since last summer and near-record high bullish bets on Brent, so the scope for further gains was limited without more clarity on the extent of damage to oil facilities or supply outages.
- The sacking of Ali al-Naimi as head of Saudi Arabia’s oil ministry also may be a reason why oil prices failed to maintain early gains, as successor Khalid al-Falih, the former head of Aramco, is expected to follow the strategy of protecting the country’s market share.
- Yesterday, Cnooc’s Nexen (NYSE:CEO) operations to the south of Fort McMurray reportedly suffered minor damage, while Suncor (NYSE:SU) says its facilities have not been damaged and is beginning to implement a plan for a return to operations.
- Other relevant tickers: RDS.A, RDS.B, XOM, IMO, COP, OTCPK:HUSKF, OTCPK:ATHOF, CNQ, CVE, OTCPK:MEGEF, ENB, OTCPK:IPPLF, OTC:KEYUF, TRP, PSX, STO
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, UGA, USL, DNO, OLO, UHN, SZO, OLEM
- Now read Fort McMurray situation getting better - oil markets daily
Mon, Apr. 18, 2:47 PM
- Goldman Sachs expects energy investors will maintain a "buy the dip" mentality, and suggests focusing specifically on its Buy-rated shale productivity favorites such as Hess (HES +4.3%), EOG Resources (EOG +2.2%), Cenovus Energy (CVE +0.3%), PDC Energy (PDCE +4.3%) and Diamondback Energy (FANG +1.7%).
- Even after the Doha collapse, Goldman maintains its forecast for Q4 2016 WTI of $45/bbl and FY 2017 average of $58/bbl, as low near-term oil prices should ultimately enable mechanisms that will bring oil markets into better balance.
- Now read Goldman names nine favorites for Goldilocks ideal $35 oil
Thu, Apr. 7, 2:26 PM
- Goldman Sachs says crude oil at $35/bbl is the Goldilocks ideal - priced neither too high nor too low but just right - to make shares of U.S. explorers worth buying, suggesting investors and use volatility to add to positions of shale productivity winners.
- The $30-$35 range should keep behavior of U.S. oil producers unchanged and accommodate $55-$60 oil in 2017, Goldman says, providing opportunity for equities, while a near-term rally to $45-$50 oil would reduce 2017 upside but still be favorable for equities, at least temporarily.
- Goldman says it favors "secular productivity winners" EOG Resources (EOG -0.6%), Diamondback Energy (FANG +1.3%) and PDC Energy (PDCE -4.4%), as well as stocks in “the next rung down,” including Hess (HES -3.5%), Cenovus Energy (CVE -1.8%), Anadarko Petroleum (APC -1.1%), Encana (ECA -4%), Continental Resources (CLR -2.1%) and Whiting Petroleum (WLL -0.6%).
- Now read Oil, interest rates and game theory: Why prices have further to fall
Fri, Apr. 1, 12:57 PM
- Cenovus Energy (CVE -2.1%) says it is cutting another 440 jobs because of low oil prices, bringing the total workforce reduction to ~1,600 since the end of 2014 and leaving total staff numbers down 31% at 3,600 employees.
- CVE said in February that it was aiming to cut operating and administrative costs by $200M this year, in part via job cuts.
- The Canadian Association of Petroleum Producers estimates that at least 41K direct jobs have been cut in the energy sector, along with many more indirect jobs.
- Now read Why Cenovus Energy may benefit from a new wave of mergers in oil and gas
Fri, Mar. 11, 5:38 PM
Fri, Feb. 26, 5:41 PM
Oct. 29, 2015, 11:54 AM
- Cenovus Energy (CVE +3.8%) is higher after its unadjusted Q3 earnings rose more than fivefold due to a C$1.9B after-tax gain on the sale of its royalty business.
- CVE says it plans to lay off another 700 employees in H2 of this year, up from 300-400 it forecast in July; CVE says that once the cuts have been made, it will have 24% fewer staff by year-end compared with the end of 2014, providing $100M in annual cost savings starting in 2016.
- CVE says it cut oil sands per-unit operating costs by 23% Y/Y, with total 2015 savings of ~C$400M compared with a July forecast of C$280M.
- Says it now projects total 2015 capital spending of C$1.8B-C$1.9B vs. a July estimate of C$1.8B-C$2B, and it projects 2016 capex of C$1.5B-C$2B.
- Q3 total oil production rose 6% Y/Y to 210.4K bbl/day and natural gas output fell 12% to 430M cf/day.
Oct. 21, 2015, 6:48 PM
- Cenovus Energy (NYSE:CVE) CEO Brian Ferguson dismisses speculation that the company may be a takeover target, WSJ reports, in an attempt to curb speculation CVE’s depressed stock price could lure outside suitors.
- "We’re not involved” in any M&A deals as a target or buyer, Ferguson says in response to talk that has ratcheted up since Suncor launched its hostile bid for Canadian Oil Sands early this month.
- Desjardins Capital Markets recently tabbed CVE as a potential target, saying "high-quality assets are especially at risk, and that’s food for thought when it comes to other high-quality assets - Cenovus is one such company."
- The CEO also says that while the company remains committed to projects designed to lower carbon emissions, CVE has been forced to reduce its R&D budget in line with broader cost cuts.
- CVE +2.2% AH.
Sep. 16, 2015, 11:31 AM
- Canadian Natural Resources (CNQ +5.8%) is the latest Canadian oil sands producer looking to cut costs, saying it plans to cut operating costs by $390M more than currently budgeted this year.
- CNQ, which has operating costs of ~US$30/bbl, hopes to lower that figure to $25-$27 within the next few years, to shield itself from U.S. crude prices that have been stuck below $50 in recent months.
- Cenovus Energy (CVE +6.5%) also says it is looking to aggressively slash costs, not satisfied with total costs of $11-$14/bbl and targeting a $1-$2/bbl reduction.
- Suncor Energy (SU +4.2%) has seen its cash operating costs fall to $28.20/bbl in H1 of the year, compared to $33.80 last year.
Sep. 3, 2015, 10:34 AM
- Cenovus Energy (CVE +2.7%) secured a crude oil export license from the U.S. earlier this year and has completed some transactions within the past month to export from the Gulf coast, Bob Pease, executive VP of corporate strategy and downstream president, tells the Financial Post.
- CVE also is building on its exports to Asia through Kinder Morgan’s Trans Mountain pipeline in British Columbia, Pease says, without revealing the destination or volume of the barrels CVE is set to export.
- Canadian oil and gas companies have been seeking out new markets in an effort to reduce their dependence on U.S. refineries following years of growth in U.S. shale oil production.
Aug. 13, 2015, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Jul. 24, 2015, 2:22 PM
- Total (TOT -2%) is aiming to sell a 50% stake in its sole U.S. refinery in Port Arthur, Tex., and has retained investment bank Lazard to advise on the deal, Reuters reports.
- TOT reportedly intends to remain operator of the 225K bbl/day plant, which it has owned for more than 40 years.
- Potential bidders could include companies from Canada's oil sands patch such as Cenovus Energy (CVE -1.4%), which are shipping growing volumes of heavy crude to the U.S. Gulf, according to the report.
Jul. 22, 2015, 2:56 PM
- In contrast to his upbeat analysis (I, II) of Exxon Mobil (XOM +1.2%), Goldman's Neil Mehta thinks investors should sell Chevron (CVX -0.2%) and Cenovus Energy (CVE -2.2%) on concerns about dividend sustainability.
- Believing too many investors are focusing on absolute yield when an ability to post dividend growth is more important long term, the analyst ranks CVX a Sell given low dividend growth, weak free cash flow and E&P volume risk, while CVE is a Sell because of limited dividend growth, lower returns and a premium valuation.
- XOM and Suncor Energy (SU -0.4%), on the other hand, "are set to deliver the highest dividend growth through the end of the decade - and now offer solid valuation upside from current levels."
May 26, 2015, 10:18 AM
- Canadian Natural Resources (CNQ -2.7%) shut production yesterday from its Kirby South oil sands operation in Alberta, raising the amount of production brought offline because of the nearby forest fire that began earlier in the weekend to 233K bbl/day, or ~10% of the province’s total oil sands output.
- CNQ already had shut 80K bbl/day of production at its Primrose facility, and Cenovus Energy (CVE -2.7%) had closed its 135K bbl/day Foster Creek operations in Alberta.
- MEG Energy (OTCPK:MEGEF) also said it had suspended operations at its Christina Lake oil sands project and moved non-essential staff from the site due to the potential risk of the fires.
Cenovus Energy, Inc. engages in gas and oil provisions. Its activities include development, production, and marketing of crude oil, natural gas liquids, and natural gas in Canada. It operates through the following segments: Oil Sands, Conventional, Refining and Marketing; and Corporate and... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration