Seeking Alpha

Cenovus Energy, Inc. (CVE)

  • Mon, Oct. 5, 5:49 PM
    • Investors rushed back into Canadian oil companies today in hopes of picking up the next takeover target following news of Suncor's unsolicited $4.3B bid for Canadian Oil Sands.
    • MEG Energy (OTCPK:MEGEF) jumped 22% on speculation it could be the next in line to be taken over, perhaps by Imperial Oil (NYSEMKT:IMO), which has been considered a possible suitor for Canadian Oil Sands.
    • Penn West (NYSE:PWE) also surged 22% as investors "clearly are positioning themselves into the next potential target, and both of them [MEG and PWE] make some sense,” says TriVest's Martin Pelletier. "They both have stretched balance sheets, both have been beaten up in the market, and they are a heck of a lot cheaper than last year.”
    • Other oil sands stocks also climbed following the Suncor offer: CVE +3.3%, OTCPK:ATHOF +14.5%, CNQ +8.8%.
    | Mon, Oct. 5, 5:49 PM | 14 Comments
  • Wed, Sep. 16, 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.
    | Wed, Sep. 16, 11:31 AM | 9 Comments
  • Thu, Sep. 3, 5:57 PM
    • Cenovus Energy (NYSE:CVE) looks prescient in its just-completed $75M acquisition of the Bruderheim Energy Terminal, as delivering crude oil by rail may be making a comeback after losing steam in H1.
    • The latest data from Canadian Pacific Railway (NYSE:CP) shows weekly crude carloads exceeding 2,000 units in the last two weeks of August, the first time this year since January.
    • Amid oil volatility, discounts for Western Canadian Select have widened to ~US$15.6/bbl over the past six weeks, allowing companies to jump back on to rail.
    • Despite skepticism even within the industry about rail’s relevance if major pipelines get built, Cenovus Energy (CVE) says it has already fielded nearly a dozen calls from producers to discuss transporting oil through its newly-acquired terminal that gives it ready access to 70K bbl/day in rail capacity.
    | Thu, Sep. 3, 5:57 PM | 3 Comments
  • Thu, Sep. 3, 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.
    | Thu, Sep. 3, 10:34 AM | Comment!
  • Fri, Aug. 28, 2:28 PM
    • Alberta's new government launches its royalty review panel, and says it will not raise oil and gas royalty rates until the end of 2016.
    • The specter of a higher government take is spooking the industry, especially with oil prices recently hitting more than six-year lows; some have argued the royalty review should be deferred until the outlook improves, while others would prefer to just get it over with.
    | Fri, Aug. 28, 2:28 PM | 34 Comments
  • Thu, Aug. 13, 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
    | Thu, Aug. 13, 12:45 PM | 9 Comments
  • Wed, Aug. 12, 12:27 PM
    • Crude oil from Canada’s tar sands has slumped to $23/bbl, chopped in half since July 1 and widening its discount to West Texas Intermediate to nearly $20/bbl, due to a combination of steadily rising production, pipeline constraints and an unexpected outage at a U.S. refinery.
    • The price plunge has done little to curb output because oil sands projects require years to plan, construct and pay back; Imperial Oil (NYSEMKT:IMO) recently doubled production capacity at its Kearl oil sands project to 220K bbl/day, and Canadian Natural Resources (NYSE:CNQ) last week said it was built to withstand low commodity prices even as it lost C$405M in Q2.
    • At current oil prices, typical oil sands producers are just covering their operating costs, while companies with higher operating costs are “losing money with each barrel they’re producing," says the VP of energy research at ARC Financial in Calgary.
    • The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and impacting the debate ahead of October's federal election.
    • Other related tickers: TRP, ENB, SU, CVE, TCK, CEO, OTCPK:HUSKF
    | Wed, Aug. 12, 12:27 PM | 36 Comments
  • Thu, Jul. 30, 3:21 PM
    • Cenovus Energy (CVE +1.2%) is higher after cutting its quarterly dividend by 40% and accelerating its cost-cutting efforts while adopting a “more moderate approach” to expanding its oil sands assets.
    • Q2 earnings fell to $0.18/share but easily topped analyst estimates, and cash flow dropped 60% Y/Y to $477M.
    • CVE says it will cut another ~300 jobs on top of a reduction of 800 jobs announced in February, and raises its cost-cutting target for the year by 40% to $280M.
    • CVE says Q2 oil sands output rose 5% to 130.7K bbl/day on a 30% Q/Q improvement in costs, but the production growth was more than offset by lower oil prices.
    • CVE keeps its 2015 capital spending plan at C$1.8B-C$2B, but due to its expectations for ongoing low oil prices, it no longer plans to pursue multiple major oil sands construction projects at the same time.
    • The company has two producing projects in the oil sands - Christina Lake and Foster Creek - both of which are 50% owned by ConocoPhillips; it plans to take advantage of the slower pace of development to find “the most economic way” to develop a third oil sands project, Narrows Lake.
    | Thu, Jul. 30, 3:21 PM | 4 Comments
  • Thu, Jul. 30, 6:14 AM
    | Thu, Jul. 30, 6:14 AM | Comment!
  • Wed, Jul. 29, 5:30 PM
  • Tue, Jul. 28, 1:12 PM
    • Canada oil sands pipeline projects look doomed after the recent Nexen oil spill leaves "two big football fields of black goo," according to a Bloomberg analysis.
    • A rupture in a line operated by the Cnooc (NYSE:CEO) unit that spewed 31K barrels of bitumen, waste water and sand has ignited outrage from communities along pipeline routes and is strengthening opposition that already has stalled every major crude export project from Canada and may lead to stricter regulations, the report says.
    • The Alberta Energy Regulator could consider new requirements including scheduled and random inspections of pipelines during construction and while in operation, as well as better spill detection technology; meanwhile, the spill gets bad press in Canadian newspapers every day.
    | Tue, Jul. 28, 1:12 PM | 27 Comments
  • Fri, Jul. 24, 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.
    | Fri, Jul. 24, 2:22 PM | 2 Comments
  • Wed, Jul. 22, 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."
    | Wed, Jul. 22, 2:56 PM | 40 Comments
  • Tue, Jul. 7, 6:43 PM
    • Barclays’ Paul Cheng predicts all 10 Americas-based oil majors - XOM, CVX, COP, HES, MUR, SU, CVE, IMO, OTCPK:HUSKF, PBR - will beat earnings forecasts, benefiting from strong downstream and chemical performances as well as better than expected production volumes and a lower operating cost environment.
    • Cheng estimates the oil majors will exceed the current EPS consensus by a median of 30% while the refiners will beat by 9%.
    • Cheng raises his full-year EPS forecast for CVX to $3.75 from $3.55 and for COP to $0.25 from $0.20, but lowers his forecast for XOM to $4 from $4.05.
    | Tue, Jul. 7, 6:43 PM | 25 Comments
  • Tue, Jul. 7, 6:25 PM
    • Low crude oil prices present an opportunity to drive down oil sands costs even further, adding to the 25% savings YTD, some of Canada's largest producers said today at a TD Bank conference in Calgary.
    • Cenovus Energy (NYSE:CVE) executive VP of oil sands Harbir Chhina believes his company can cut costs by another 30%, adding that “the key thing that’s going to happen now, with this downturn, is really the cost structure in the oil sands is going to come down."
    • It is a sentiment echoed by Canadian Oil Sands (OTCQX:COSWF) CEO Ryan Kubik, who expects 2015 operating costs of C$39.48/bbl vs. C$45.69 at the start of the year.
    • Encana (NYSE:ECA) VP of strategy Corey Code said the oil price slide has provided the opportunity to cut costs not just in oil sands but across its shale oil holdings in Alberta and Texas.
    • In addition to reducing operating costs, MEG Energy's (OTCPK:MEGEF) John Rogers said the company would grow its production solely by expanding existing oil sands plants for the foreseeable future.
    | Tue, Jul. 7, 6:25 PM | 5 Comments
  • Tue, Jun. 30, 7:23 AM
    • Cenovus Energy (NYSE:CVE) confirms it has agreed to sell its royalty lands business to Ontario Teachers' Pension Plan for ~C$3.3B ($2.66B).
    • Heritage Royalty Limited Partnership owns ~4.8M acres in Alberta, Saskatchewan and Manitoba.
    • CVE says its consolidated production will be reduced by 7,800 boe/day of third-party royalty interest volumes.
    | Tue, Jun. 30, 7:23 AM | 1 Comment
CVE vs. ETF Alternatives
Company Description
Cenovus Energy Inc is an integrated oil company. The Company is in the business of developing, producing and marketing crude oil, NGLs and natural gas in Canada with refining operations in the United States.