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Cenovus CEO frets over oil-by-rail cancellation threat

Apr. 24, 2019 6:34 PM ETCenovus Energy Inc. (CVE) Stock, CVE:CA StockCVEBy: Carl Surran, SA News Editor6 Comments
  • Cenovus Energy (NYSE:CVE) President and CEO Alex Pourbaix says he is worried that the Canadian market's fragile balance and lift from higher heavy oil prices could be jeopardized if Alberta's new government cancels crude-by-rail contracts.
  • The United Conservative party, which is preparing to take over the provincial government, has vowed to cancel the rail contracts, which many domestic oil companies including CVE believe is needed amid a lack of new export pipelines.
  • "We need oil-by-rail in this province if we ever hope to get away from curtailment and get back to a point where we can add production," Pourbaix tells the Financial Post.
  • The CEO says the company moved 20K bbl/day of oil on railway cars at the beginning of April, but new tank cars were arriving and CVE would be ramping up shipments to 100K bbl/day by year-end 2019.
  • CVE closed more than 2% lower as Q1 earnings came in below analyst estimates but it said it had paid off $515M of debt since the start of the year, and thanks to higher oil prices would be able to "make significant progress" to reaching its $5B net debt target this year.

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