Seeking Alpha

Cenovus Energy, Inc. (CVE)

  • Wed, May 6, 7:38 AM
    • In a stunning election result, voters in Canada's energy-rich Alberta province swept aside the four-decade hold on power by the ruling Progressive Conservative Party and elected an New Democratic Party majority government that wants to raise corporate taxes and increase oil and gas royalties.
    • NDP leader Rachel Notley - who has vowed to raise the corporate tax rate to 12% at a time energy companies are reeling from layoffs and project cancellations amid weaker oil prices - is expected to succeed Jim Prentice as Alberta’s premier.
    • Notley has said she would not lobby for the proposed Keystone XL pipeline to link Alberta’s oil deposits to refineries in Texas, and that she is against the Northern Gateway pipeline from Alberta to the British Columbia coast.
    • She also has promised another review of oil royalties at a time other oil producing areas around the world that are also struggling with low oil prices are expected to make their terms more appealing.
    | Wed, May 6, 7:38 AM | 140 Comments
  • Wed, Apr. 29, 12:58 PM
    • Cenovus Energy (CVE +0.1%) is trading around the flatline after reporting a larger than expected Q1 loss and a 45% Y/Y drop in cash flow, as lower oil prices far outweighed higher oil sands production and lower.
    • CVE says production at its oil sands operations rose 20% Y/Y to more than 144K bbl/day and its cost to produce a barrel of crude from those assets fell by 31% with more cost cutting measures underway; however, these benefits were more than offset by the 49% Y/Y drop in average Brent prices.
    • CVE also says it expects to add ~100K bbl/day of gross oil sands production capacity, bringing total oil sands production capacity to 390K bbl/day in 2016.
    • In CVE's earnings conference call, CEO Brian Ferguson said current commodity prices are sufficient to cover both 2015 its capital spending and dividend payout.
    | Wed, Apr. 29, 12:58 PM | 2 Comments
  • Wed, Apr. 29, 6:04 AM
    | Wed, Apr. 29, 6:04 AM | Comment!
  • Tue, Apr. 28, 5:30 PM
  • 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.
    | Thu, Apr. 23, 3:09 PM | 1 Comment
  • 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.
    | Wed, Apr. 22, 6:53 PM | 9 Comments
  • 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.
    | Thu, Mar. 19, 4:58 PM | 6 Comments
  • 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, Mar. 4, 11:22 AM | 16 Comments
  • 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, 7:45 PM | 44 Comments
  • Wed, Feb. 18, 9:15 AM
    | Wed, Feb. 18, 9:15 AM | Comment!
  • 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.
    | Tue, Feb. 17, 6:25 PM | 5 Comments
  • 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, 8:48 AM | Comment!
  • Thu, Feb. 12, 6:41 AM
    | Thu, Feb. 12, 6:41 AM | Comment!
  • Wed, Feb. 11, 5:30 PM
  • 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.
    | Wed, Jan. 28, 8:48 AM | 1 Comment
  • 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
    | Tue, Jan. 13, 3:23 PM | 4 Comments
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.