Thu, Apr. 23, 3:09 PM
- Cenovus Energy (CVE +4.2%) has hired TD Bank to explore the possible sale or IPO of its royalty lands in western Canada, Bloomberg reports.
- The royalty lands, located across Alberta, Saskatchewan and Manitoba, could fetch as much as C$1.6B ($1.3B) in a sale, according to RBC analyst Shailender Randhawa, who says CVE has 3.1M net acres of royalty lands that produce 7,600 boe/day and generated C$150M in pre-tax operating cash flow for the company.
- Potential bidders are speculated to include other royalty companies such as PrairieSky (OTC:PREKF), Freehold Royalties (OTCPK:FRHLF) or Franco-Nevada (NYSE:FNV), as well as pension plans or P-E players.
Wed, Apr. 22, 6:53 PM
- Nomura came out bullish today on the energy E&P sector - issuing Buy ratings for MRO, PXD, EOG, CLR, APC, NFX, RRC, CNQ, CXO, ECA and SU - even as the firm does not foresee a V-shaped rebound in crude oil prices.
- Nomura believes core North American shale plays do not represent the economic marginal cost of supply in the world, which runs counter to commonly held views that largely see shale occupying the high end of the cost curve; thus as oil rebounds, so will investment in the shales, which should support prices, the firm says.
- In such an environment, Nomura says selecting stocks will depend on factors such as ”the reinvestment opportunity set, impact of oilfield technology, continued efficiencies, potential new geologic plays, management acumen and balance sheet strength."
- The firm is Neutral on DVN, HES, MUR, OAS, UPL, WLL, XEC, COG, COP and SWN; it rates NBL, APA, DNR, CHK and CVE as Reduce.
Thu, Mar. 19, 4:58 PM
- Cenovus Energy's (NYSE:CVE) $1.3B funding gap for 2015 may wind up smaller than anticipated, TD Securities analyst Menno Hulshof says as he points to the improved refining outlook since earlier this year due to the widening Brent-WTI crude differential.
- Hulshof notes CVE's guidance indicated that every US$1/bbl increase boosts refining cash flow by US$90M; if crack spreads averaged US$16.75 - $5 higher than guidance - then the refining cash flow outlook would increase to ~$700M and the funding shortfall would fall to $850M.
- The analyst also says CVE appears to be turning the corner on coalescence issues at Foster Creek since operating costs and steam-to-oil ratios appear to have peaked and are trending lower.
Wed, Mar. 4, 11:22 AM
- Kinder Morgan (KMI -0.6%) wants to drill through Burnaby Mountain in British Columbia to reach an oil-loading ship terminal, but WSJ reports that it is facing more challenges than the mountain itself, as it also is battling resistance from Vancouver officials and protestors opposed to fossil fuel development.
- Burnaby Mountain has become a symbolic battlefield in a much larger debate about energy resources in North America, opponents and supporters of the pipeline plan say.
- Canadian oil producers are counting on KMI’s $4.3B proposal to triple the capacity of the existing Trans Mountain pipeline, which connects Alberta’s oil sands to a Pacific coast terminal, as the fate of the Keystone XL pipeline remains in limbo.
- More than a dozen oil companies have binding deals for up to 20 years with the pipeline, including Exxon (NYSE:XOM) affiliate Imperial Oil (NYSEMKT:IMO), Cenovus Energy (NYSE:CVE) and Canadian Natural Resources (NYSE:CNQ), who view the project as a vital link to new markets in Asia.
Wed, Feb. 18, 7:45 PM
- Warren Buffett's decision to dump his entire $4B stake in Exxon Mobil (NYSE:XOM) is pointing investors toward more nimble producers such as Suncor (NYSE:SU) and Phillips 66 (NYSE:PSX) that can deliver higher returns during an oil price recovery.
- J.P. Morgan is reiterating its lukewarm outlook on XOM, "which has not yet fully pulled the trigger to just run at maintenance type levels," as well as ConocoPhillips (NYSE:COP), Chevron (NYSE:CVX) and Cenovus Energy (NYSE:CVE), which the firm says are "getting quite close to their sustaining capex/free cash flow potential already."
- Not everyone is so down on the supermajors; BlackRock favors the group because of their strong balance sheets, high dividends and integrated business models, and Ed Yardeni notes that the stocks remain attractive for income-oriented accounts.
Wed, Feb. 18, 9:15 AM
Tue, Feb. 17, 6:25 PM
- Cenovus Energy (NYSE:CVE) -4.9% AH Cenovus Energy on news it entered into a bought-deal financing agreement to sell 67.5M common shares at $22.25/share.
- CVE says the net proceeds of the offering, combined with its $3B of undrawn committed credit lines, will result in a stronger balance sheet and financial flexibility to help fund its planned $1.8B-$2B 2015 capex program.
- CVE says it will continue expansion projects already under way at its core Foster Creek and Christina Lake projects in Alberta’s oil sands, and expects to produce up to 212K bbl/day of oil in 2015, up from 203K last year and 179K in 2013.
Thu, Feb. 12, 8:48 AM
- Cenovus Energy (NYSE:CVE) says it will cut 15% of its workforce, freeze wages and reduce discretionary spending as it reports a bigger than expected Q4 loss that ballooned 8x.
- The loss for the quarter included a $497M charge related to the Pelican Lake project due to the drop in oil prices and a slowing of the development plan for the project.
- CVE says that with low oil prices expected to persist through 2015 it will focus on expansion projects at its Foster Creek and Christina Lake operations that are already well advanced.
- Cash flow was cut by more than half to $401M, while total oil production rose 14.5% to 216K bbl/day.
- Last month, CVE cut its 2015 capital budget by $700M to $1.8B-$2B.
Thu, Feb. 12, 6:41 AM
Wed, Feb. 11, 5:30 PM
- AAP, AAWW, AB, ACOR, ANR, APA, AVP, BG, BWA, CAB, CCE, COR, CPLA, CS, CVE, DBD, DPS, FAF, FLO, GNC, HE, HERO, HIMX, HSP, IFF, INCY, JAH, K, LMNS, LNCE, LPNT, MANU, MDWD, MFA, MFC, MHFI, MINI, MPEL, MPW, NCI, NLSN, NNN, NRP, NWE, PDS, PNK, Q, RDN, RTIX, RWLK, RYN, SCOR, SHPG, SKYW, SNI, SON, SPW, STC, THS, TIME, TU, VG, VNTV, WD, WSO, WWAV, WWE
Wed, Jan. 28, 8:48 AM
- Cenovus Energy (NYSE:CVE) cuts its capital spending budget by an additional $700M, the second time Canada's no. 2 independent oil producer has announced capex cuts in response to lower oil prices.
- CVE says the cuts will focus largely on conventional operations in southern Alberta and Saskatchewan, where it will suspend the bulk of its drilling program for the year; it will continue to fund optimization and expansion programs at its Christina Lake oil sands project, as well as the expansion at Foster Creek.
- In December, CVE projected spending of C$2.5B-C$2.7B, a ~15% reduction from 2014 levels; it is now targeting spending of C$1.8B-C$2B.
- CVE also plans to “realign” its workforce in the coming weeks in line with its revised spending plans and to cut the size of its contract workforce.
- Reduces its oil production forecast for 2015 to 195K-212K bbl/day from 197K-214K bbl/day it forecast in December.
Tue, Jan. 13, 3:23 PM
- J.P. Morgan's Joseph Allman is “mildly bullish” on oil and gas E&P companies in 2015, as short-term nervousness about the oil market’s oversupply is outweighed by the benefits of low oil prices, declining service costs and a more balanced oil market.
- Allman’s favorite picks among big-cap names are EOG, APC and NBL, among mid-caps are XEC and PXD, plus PDCE in the small-cap space; his least favorite stocks are APA, AREX, GDP and JONE.
- Among majors, JPM analysts Phil Gresh and John Royall initiate SunCor (NYSE:SU) at Overweight, citing "top tier sustainable dividend coverage and leverage, with some underlying growth potential"; the pair also downgrade Cenovus (NYSE:CVE) to Neutral, tags ConocoPhillips with an Underweight rating, and are neutral on Exxon (NYSE:XOM) and Chevron (NYSE:CVX).
- Earlier: Valero Energy upgraded, Marathon Petroleum downgraded at J.P. Morgan
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, IEO, PXE, FENY, PXJ, RYE, FXN, DDG
Tue, Jan. 13, 12:28 PM
- Canadian Natural Resources' (CNQ +1.1%) pledge to keep spending on expanding output at its biggest oil sands mine regardless of the price of crude shows that Canadian oil sands operators are intent on maintaining their production thanks to huge upfront costs, long-term breakeven points and lengthy production lives, continuing to add to the global oil glut, WSJ reports.
- CNQ said yesterday that it still expects overall output to grow beyond 2014 levels, and that it will continue expanding production because it expects higher volume will cut operating expenses at its Horizon mine - currently C$37.13/bbl - by at least another C$10/bbl.
- Existing oil sands surface mines can make money at ~$30/bbl, and the most efficient underground oil sands projects run by Cenovus Energy (CVE -1%) can stay profitable at $35/bbl, according to the report.
- Suncor (SU +1.9%) CEO Steve Williams said in November that his company’s strong balance sheet would allow it to ride out the turbulence and stick with a bullish growth strategy.
Fri, Jan. 2, 2:30 PM
- As many as 16 oil sands’ projects worth nearly $60B that have not yet received corporate sanctioning may be deferred if current oil prices persist, according to upstream research analysts at Wood Mackenzie.
- Key projects the firm expects to come on line by 2017 include the 165K bbl/day Fort Hill venture owned by Suncor (NYSE:SU), Total (NYSE:TOT) and Teck Resources (NYSE:TCK); Canadian Oil Sands' (OTCQX:COSWF) 100K bbl/day Mildred Lake replacement project; Imperial Oil’s (NYSEMKT:IMO) 110K bbl/day Kearl Phase 2; ConocoPhillips' (NYSE:COP) 109K bbl/day Surmont Phase 2; and Shell’s (RDS.A, RDS.B) 100K bbl/day Jackpine expansion.
- Projects expected to face delays include Cenovus Energy’s (NYSE:CVE) Christina Lake Phase H and its Narrows Lake Phase A; expansion work at Husky Energy's (OTCQB:HUSKF) Sunrise SAGD plant; and PetroChina’s (NYSE:PTR) MacKay River project.
- Most analysts expect a 10%-15% drop in capex for Canadian energy producers in 2015, with bigger cuts perhaps coming as the year unfolds to rival 2009's 20% capex decline.
Dec. 15, 2014, 5:49 PM
- Canadian heavy crude is trading below US$40/bbl for the first time in five years, just as a surge of 14 new oil sands projects with a combined capacity of more than 266K bbl/day are scheduled to start next year.
- Oil sands projects scheduled to start next year include ConocoPhillips (NYSE:COP) and Total’s (NYSE:TOT) joint 118K bbl/day Surmont project and the 40K bbl/day expansion of Cenovus Energy’s (NYSE:CVE) Foster Creek project.
- Analysts say while oil sands producers may curtail future development, most existing operations will not be shut and those under construction will go ahead because of the investments involved and potential harm to future output; profitability for all but the lowest-cost producers will be squeezed, as Canadian crude produced from oil sands is some of the world’s most expensive to produce.
Dec. 11, 2014, 7:59 AM
- Cenovus Energy (NYSE:CVE) says it is planning 2015 capital spending of $2.5B-$2.7B, a ~15% Y/Y reduction from the $3B-$3.1B it expects to spend this year.
- CVE says it will manage through the volatile oil price environment through sustainable cost savings initiatives targeting $400M-$500M in annual operating and capital cost savings by 2018.
- CVE expects 2015 production growth of ~9% for oil sands production and ~4% for total oil production of 197K-214K bbl/day.
- While CVE sees its cash flow falling 29% to $2.6B-$2.9B in 2015, based on WTI crude prices of $74-$81, the company anticipates maintaining its dividend at current levels; says it would be able to fully fund its committed capital with internal cash flow with WTI at ~$65/bbl through 2015.
CVE vs. ETF Alternatives
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.
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