Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) delivered record oil
sands production in the fourth quarter of 2021, contributing to
total upstream output of more than 825,000 barrels of oil
equivalent per day (BOE/d)1 and almost 792,000 BOE/d1 for the full
year. The company generated fourth-quarter cash from operating
activities of $2.2 billion and adjusted funds flow of $1.9 billion.
With free funds flow of $1.1 billion in the quarter, and proceeds
from recent divestitures, net debt was below $9.6 billion at year
end, a reduction of more than $1.4 billion from the end of the
third quarter and $3.5 billion in 2021 following the acquisition of
Husky Energy. Total long-term debt was $12.4 billion as at December
31, 2021, down nearly $1.7 billion from January 1, 2021, and
expected to decrease by approximately US$384 million on February 9
when Cenovus redeems the remaining principal amount of its notes
due in 2023 and 2024. As part of its plan to enhance shareholder
returns, Cenovus continues to buy back common shares under its
previously announced Normal Course Issuer Bid (NCIB) and as of
February 7 had repurchased approximately 26 million common
shares at a volume weighted price of $16.31 per share.
“In our first year as a combined company we delivered
exceptional operational performance at our upstream business,
successfully integrated the assets acquired in the Husky
transaction and aggressively reduced debt, creating a stronger
company,” said Alex Pourbaix, Cenovus President & Chief
Executive Officer. “We exceeded our expected transaction synergies
and enhanced shareholder returns, doubling our quarterly dividend
and commencing our share buyback program. In addition, we’re well
positioned to consider future opportunities to further enhance
returns for our shareholders.”
Financial, production & throughput
summary |
(For the period ended
December 31) |
2021 Q4 |
2020 Q42 |
% change2 |
2021 FY |
2020 FY2 |
% change2 |
Financial
($ millions, except per share amounts) |
Cash from operating
activities |
2,184 |
|
250 |
|
774 |
5,919 |
273 |
|
2,068 |
Adjusted funds flow3,4 |
1,948 |
|
333 |
|
485 |
7,248 |
117 |
|
6,095 |
Per share (basic)3 |
0.97 |
|
0.27 |
|
|
3.59 |
0.10 |
|
|
Capital investment |
835 |
|
242 |
|
245 |
2,563 |
841 |
|
205 |
Free funds flow3,4 |
1,113 |
|
91 |
|
1,123 |
4,685 |
(724 |
) |
|
Net earnings (loss) |
(408 |
) |
(153 |
) |
|
587 |
(2,379 |
) |
|
Per share (basic) |
(0.21 |
) |
(0.12 |
) |
|
0.27 |
(1.94 |
) |
|
Long-term debt |
12,385 |
|
7,441 |
|
66 |
12,385 |
7,441 |
|
66 |
Net debt5 |
9,591 |
|
7,184 |
|
34 |
9,591 |
7,184 |
|
34 |
Production and throughput (before royalties, net to
Cenovus) |
Oil and NGLs (bbls/d)1 |
678,300 |
|
405,300 |
|
67 |
642,300 |
408,400 |
|
57 |
Conventional natural gas
(MMcf/d) |
883.5 |
|
369.5 |
|
139 |
895.5 |
379.0 |
|
136 |
Total upstream
production (BOE/d)1 |
825,300 |
|
467,200 |
|
77 |
791,500 |
471,700 |
|
68 |
Total downstream
throughput (bbls/d) |
469,900 |
|
169,000 |
|
178 |
508,000 |
185,900 |
|
173 |
1 See Advisory for production by product type.2 Comparative
figures include Cenovus results prior to the January 1, 2021
closing of the Husky transaction and do not reflect historical data
from Husky.3 Non-GAAP financial measure. See Advisory. 4 Prior
period results have been restated to conform with the current
definition of adjusted funds flow.5 Specified financial measure.
See Advisory.
Fourth quarter operating
results1In the fourth quarter, Cenovus
achieved upstream production of 825,300 BOE/d, including record
average daily oil sands production of almost 251,000 barrels per
day (bbls/d) at Christina Lake and nearly 212,000 bbls/d at Foster
Creek. Christina Lake production added more than 8,000 bbls/d
compared with the third quarter, benefiting from the continued
success of Cenovus’s well redevelopment plan. Production at Foster
Creek increased almost 25,000 bbls/d from the previous quarter,
primarily due to new wells from the asset’s west development area
now operating at full production rates. The Lloydminster thermal
projects continued to demonstrate strong and reliable performance,
achieving production of 99,000 bbls/d, up from 98,000 bbls/d in the
third quarter. The Offshore segment contributed more than 73,000
BOE/d, including production of 62,500 BOE/d from the Asia Pacific
region and 10,600 bbls/d from the Atlantic region, while the
Conventional segment had production of 125,300 BOE/d.
The Canadian Manufacturing segment also continued its strong and
reliable performance. The crude utilization rate was 98%, with the
Lloydminster Upgrader and Lloydminster Refinery running at or near
capacity throughout the fourth quarter. Canadian Manufacturing
throughput was 108,300 bbls/d, in line with the third quarter.
In the U.S. Manufacturing segment, the crude utilization rate
was 72% with crude throughput of 361,600 bbls/d, down from 89%
utilization and throughput of 445,800 bbls/d in the third quarter.
The difference in the fourth quarter was primarily due to reduced
throughput at the Lima Refinery related to a planned major
turnaround, which occurs every five years, as well as subsequent
operational challenges on secondary units at Lima, as well as
planned maintenance and an unplanned outage at the Wood River
Refinery, co-owned with operator Phillips 66. The challenges
following completion of the Lima turnaround reduced throughput in
December and most of January. These issues have been successfully
resolved and the Lima facility returned to normal operations by the
end of last month.
“In 2021, we clearly delivered on our operational strength in
the Upstream and Canadian Manufacturing businesses,” said Pourbaix.
“In 2022, we are focused on building a similarly strong executional
track record in U.S. Manufacturing and demonstrating the additional
value that business will generate for our shareholders.”
In the fourth quarter, Cenovus’s total revenues were slightly
over $13.7 billion compared with $12.7 billion in the third
quarter, driven by higher average realized sales prices for the
company’s products across the Upstream and Downstream segments.
Total operating margin6 for the quarter was $2.6 billion, compared
with approximately $2.7 billion in the previous quarter, driven
primarily by reduced throughput and higher costs in U.S.
Manufacturing.
Downstream revenues rose to about $8.1 billion compared with
$7.5 billion in the third quarter, largely driven by higher average
refined product pricing. Total Downstream operating margin5 fell to
$42 million compared with $268 million in the third quarter,
largely due to the elevated operating costs in U.S. Manufacturing
offset by continued strong and reliable operating performance from
Canadian Manufacturing. While Canadian Manufacturing operating
margin of $131 million was relatively flat with the previous
quarter’s $130 million, U.S. Manufacturing operating margin was
negative $97 million, down from $122 million in the third
quarter.
Upstream revenues rose to $7.4 billion from $6.6 billion in the
previous quarter, driven by higher average realized sales
prices. Total Upstream operating margin5 was more than $2.5
billion, up slightly from about $2.4 billion in the third quarter,
with the difference mainly driven by higher operating margins from
the company’s Conventional and Offshore assets. In both cases, the
operating margin increases were primarily driven by higher average
realized sales.
6 Non-GAAP financial measure. Total operating margin is the
total of Upstream operating margin plus Downstream operating
margin. See Advisory.
Fourth quarter financial resultsCash from
operating activities was $2.2 billion and adjusted funds flow was
$1.9 billion in the quarter. Free funds flow of $1.1 billion
included capital investment of $835 million primarily for planned
winter drilling programs in the Oil Sands and Conventional segments
as well as the Superior Refinery rebuild project.
Cash flows were impacted in the fourth quarter by a realized
risk management loss of $268 million related to Cenovus’s inventory
risk management program compared with a realized risk management
loss of $184 million in the third quarter. In addition, general and
administrative expense was $358 million, compared with $158 million
in the prior quarter, with the quarter-over-quarter change related
to an accrual of $167 million for a synergies incentive plan as
well as $62 million for the impact of increased share price on
stock-based compensation expense.
Cenovus recorded a net loss of $408 million in the fourth
quarter, compared with third-quarter net earnings of $551 million.
The net loss primarily resulted from a non-cash impairment of $1.9
billion in the U.S. Manufacturing segment, reflecting a
point-in-time commodity price outlook for accounting purposes,
partially offset by reversals of prior impairments of $378 million
in Cenovus’s Conventional segment. The company continues to see
long-term value in the U.S. Manufacturing business, including the
reduced cash flow volatility offered by Cenovus’s integrated heavy
oil value chain.
Full-year results1On a
full-year basis, Cenovus achieved total Upstream production of
791,500 BOE/d, reflecting production increases at most of the
company’s assets, including record output in its Oil Sands segment
over the course of the year. Total Oil Sands segment
production was 581,500 bbls/d, including nearly 180,000 bbls/d at
Foster Creek, a 10% increase from 2020, and about 237,000 bbls/d at
Christina Lake, up 8% from the previous year. Record production was
also delivered at the Lloydminster thermal projects with almost
98,000 bbls/d for the year. In Conventional, production increased
to 133,600 BOE/d from approximately 89,900 BOE/d in 2020, with the
increase largely related to assets acquired through the Husky
transaction. Offshore total production was 74,400 BOE/d.
In Canadian Manufacturing, average utilization for the year was
96% and average throughput was 106,500 bbls/d, reflecting the
top-tier performance of the Lloydminster Upgrader and Lloydminster
Refinery. In U.S. Manufacturing, full-year utilization was 80% and
average throughput was 401,500 bbls/d.
Total revenues were about $46.4 billion in 2021 and total
operating margin was almost $9.4 billion, compared with revenues of
$13.5 billion and total operating margin of $921 million in 2020.
Year-over-year differences in both total revenues and total
operating margin largely related to increased commodity prices and
assets acquired in the Husky transaction.
Cash from operating activities was nearly $6 billion for the
year, compared with $273 million in 2020. Adjusted funds flow was
$7.2 billion and free funds flow was $4.7 billion. Total capital
expenditures for the year were approximately $2.6 billion,
primarily concentrated on sustaining production at the company’s
upstream assets and maintenance capital for the downstream assets,
as well as investment in the Superior Refinery rebuild. Full-year
net earnings for 2021 were $587 million compared with a loss of
$2.4 billion the previous year.
Portfolio updateDuring the fourth quarter,
Cenovus reached agreements for asset sales with total proceeds of
about $1.5 billion. This brings the total expected cash proceeds
from sale announcements in 2021 to approximately $1.9 billion, of
which $430 million was realized by the end of the year.
Cenovus agreed to sell its Husky retail fuels network
for approximately $420 million and the Wembley assets in its
Conventional business for approximately $238 million. The Wembley
transaction is expected to close in the current quarter and,
subject to regulatory approvals, retail in mid-2022. The company
also announced the sale of its Tucker thermal asset, which closed
on January 31, for approximately $800 million. Cenovus’s 2022
guidance did not reflect the sale of Tucker and the company plans
to provide updated guidance with first quarter results.
While Cenovus will always consider opportunities to optimize its
asset portfolio, the company does not anticipate further
significant divestitures in the near future.
Shareholder returnsThe Board has declared a
dividend of $0.035 per share, payable on March 31, 2022 to common
shareholders of record as of March 15, 2022. Cenovus continued to
execute its NCIB announced in late 2021, which allows the company
to purchase up to 146.5 million of its common shares. In 2021, the
company repurchased approximately 17 million common shares
with another 9 million bought back so far in 2022. The Board
also declared a fourth-quarter dividend on each of the Cumulative
Redeemable First Preferred Shares – Series 1, Series 2, Series 3,
Series 5 and Series 7 – payable on March 31, 2022 to
shareholders of record as of March 15, 2022 as follows:
Preferred shares dividend summary |
|
Rate (%) |
Amount ($/share) |
Share series |
Series 1 |
2.577 |
0.16106 |
Series 2 |
1.859 |
0.11460 |
Series 3 |
4.689 |
0.29306 |
Series 5 |
4.591 |
0.28694 |
Series 7 |
3.935 |
0.24594 |
All dividends paid on Cenovus’s common and preferred shares will
be designated as "eligible dividends" for Canadian federal income
tax purposes. Declaration of dividends is at the sole discretion of
the Board and will continue to be evaluated on a quarterly
basis.
Health and safety To protect the health and
safety of Cenovus staff and neighbouring communities, the company
continues to follow its own robust COVID-19 protocols, as well as
those outlined by regional health authorities across the company’s
operating areas. This includes encouraging vaccination and
employing rapid testing. Cenovus’s field operations continue to run
safely and reliably. The company is monitoring the evolving public
health situation and examining next steps around Western Canada
return to office decisions.
Cenovus achieved strong occupational and process safety
performance in the fourth quarter while completing maintenance work
at assets across the company, which contributed to solid safety
results for the full year. Cenovus remains focused on continuing to
further build and sustain a culture that delivers continuous
improvement in safety performance and a commitment to protect the
environment. The company continued to harmonize major safety
systems, programs and applications throughout 2021, with further
work expected this year. Additionally, the company continues to
roll out its Cenovus Operations Integrity Management System
(COIMS). The COIMS framework defines what the company will do to
manage health, safety, operations integrity and environmental
risk.
SustainabilityDuring the fourth quarter,
Cenovus set out ambitious targets for the company’s five
environmental, social and governance (ESG) focus areas of climate
& greenhouse gas (GHG) emissions, water stewardship,
biodiversity, Indigenous reconciliation and inclusion &
diversity. The targets, which are embedded in the company’s
five-year business plan, include a reduction in absolute scope 1
and 2 GHG emissions of 35% by year-end 2035 from 2019 levels, on a
net equity basis, and a longer-term ambition of net zero emissions
by 2050. Other targets include a reduction in fresh water intensity
by 20% in oil sands and in thermal operations by year-end 2030,
reclaiming 3,000 decommissioned well sites by year-end 2025,
restoring more habitat than the company uses in the Cold Lake
caribou range by year-end 2030, achieving a minimum of $1.2 billion
of spending with Indigenous businesses between 2019 and year-end
2025, and increasing the number of women in leadership roles, which
includes Team Lead/Coordinator/Supervisor or above, to 30% by
year-end 2030.
The Oil Sands Pathways to Net Zero initiative, co-founded by
Cenovus, continued work on its foundational carbon capture,
utilization and storage project. This first project is expected to
include a pipeline with phased expansion capability to gather
carbon dioxide from 20 oil sands facilities. Discussions are
ongoing with the federal and provincial governments to ensure the
necessary policy and financial support is in place for Pathways to
achieve its ambitious vision, support the oil sands sector’s
long-term contribution to Alberta and help Canada achieve its
climate and economic recovery commitments. The Pathways alliance is
also progressing work to assess the feasibility of multiple other
GHG-reducing technologies.
ReservesCenovus’s proved and probable reserves
are evaluated each year by independent qualified reserves
evaluators. At the end of 2021, Cenovus’s total proved reserves
rose 21% to approximately 6.1 billion BOE, while total proved plus
probable reserves increased 24% to approximately 8.3 billion
BOE largely due to the Husky transaction. Total proved bitumen
reserves were approximately 5.6 billion barrels, an increase of 16%
from 2020, while total proved plus probable bitumen reserves rose
17% to approximately 7.4 billion barrels. At year-end 2021, Cenovus
had a proved reserves life index of approximately 21 years, and a
proved plus probable reserves life index of approximately 29
years.
More details about Cenovus’s reserves and other oil and gas
information are available in the Advisory, and the Management’s
Discussion & Analysis (MD&A), Annual Information Form (AIF)
and Annual Report on Form 40-F for the year ended December 31,
2021, which will be available on SEDAR at sedar.com, EDGAR at
sec.gov and Cenovus’s website at cenovus.com.
Cenovus year-end disclosure documentsToday,
Cenovus is filing its audited Consolidated Financial Statements,
MD&A and AIF with Canadian securities regulatory authorities.
The company is also filing its Annual Report on Form 40-F for the
year ended December 31, 2021 with the U.S. Securities and Exchange
Commission. Copies of these documents will be available on SEDAR at
sedar.com, EDGAR at sec.gov and the company's website at
cenovus.com under Investors. They can also be requested free of
charge by emailing investor.relations@cenovus.com.
Conference call today9 a.m. Mountain Time
(11 a.m. Eastern Time)Cenovus will host a conference call
today, February 8, 2022, starting at 9 a.m. MT (11 a.m. ET). To
participate, please dial 888-394-8218 (toll-free in North America)
or 647-484-0475 approximately 10 minutes prior to the conference
call. A live audio webcast of the conference call will also be
available. The webcast will be archived for approximately 90
days. |
AdvisoryBasis
of PresentationCenovus reports
financial results in Canadian dollars and presents production
volumes on a net to Cenovus before royalties basis, unless
otherwise stated. Cenovus prepares its financial statements in
accordance with International Financial Reporting Standards
(IFRS).
Oil and gas informationReserves Life
IndexReserves life index is calculated based on reserves
for the applicable reserves category divided by annual
production.
Barrels of Oil
EquivalentNatural gas volumes have been
converted to barrels of oil equivalent (BOE) on the basis of six
thousand cubic feet (Mcf) to one barrel (bbl). BOE may be
misleading, particularly if used in isolation. A conversion ratio
of one bbl to six Mcf is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent value equivalency at the wellhead. Given that the value
ratio based on the current price of crude oil compared with natural
gas is significantly different from the energy equivalency
conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is
not an accurate reflection of value.
Product types
Product type by operating segment |
|
Three months ended December 31,
2021 |
Full year ended December 31,
2021 |
Oil Sands |
Bitumen (Mbbls/d) |
606.0 |
561.3 |
Heavy crude oil (Mbbls/d) |
18.9 |
20.2 |
Conventional natural gas (MMcf/d) |
12.4 |
12.6 |
Total Oil Sands segment production (BOE/d) |
626.9 |
583.5 |
Conventional |
Light crude oil (Mbbls/d) |
7.2 |
8.4 |
Natural gas liquids (Mbbls/d) |
22.5 |
25.6 |
Conventional natural gas (MMcf/d) |
574.3 |
597.6 |
Total Conventional segment production (BOE/d) |
125.3 |
133.6 |
Offshore |
Light crude oil (Mbbls/d) |
10.6 |
14.1 |
Natural gas liquids (Mbbls/d) |
13.1 |
12.7 |
Conventional natural gas (MMcf/d) |
296.8 |
285.3 |
Total Offshore segment production (BOE/d) |
73.1 |
74.4 |
Total upstream production (BOE/d) |
825.3 |
791.5 |
Forward‐looking
InformationThis news release contains certain
forward‐looking statements and forward‐looking information
(collectively referred to as “forward‐looking information”) within
the meaning of applicable securities legislation, including the
U.S. Private Securities Litigation Reform Act of 1995, about
Cenovus’s current expectations, estimates and projections about the
future of the company, based on certain assumptions made in light
of experiences and perceptions of historical trends. Although
Cenovus believes that the expectations represented by such
forward‐looking information are reasonable, there can be no
assurance that such expectations will prove to be correct.
Forward‐looking information in this document is identified by
words such as “achieve”, “anticipate”, “commitment”, “continue”,
“deliver”, “expect”, “focus”, “next steps”, “positioned”, “target”,
and “will” or similar expressions and includes suggestions of
future outcomes, including, but not limited to, statements about:
general and 2022 priorities; net debt and long-term debt; upstream
production; downstream operations and performance; cash flow
volatility; updating guidance; shareholder returns; the repurchase
of Cenovus common shares; closing disposition transactions; asset
portfolio optimization; divestitures; dividends; timing of office
workforce returns; safety performance, programs and applications,
including COIMS; protecting the environment; ESG target areas,
including GHG emissions reductions for Cenovus and for the oil
sands through the Oilsands Pathways to Net Zero initiative; fresh
water intensity; reclaiming decommissioned well sites; habitat
restoration; spending with Indigenous businesses; women in
leadership roles; and reserves and reserves life index.
Developing forward‐looking information involves reliance on a
number of assumptions and consideration of certain risks and
uncertainties, some of which are specific to Cenovus and others
that apply to the industry generally. The factors or assumptions on
which the forward‐looking information in this news release are
based include, but are not limited to: Cenovus’s ability to realize
the anticipated benefits of the Husky transaction; the allocation
of free finds flow to Cenovus’s balance sheet; commodity prices;
future narrowing of crude oil differentials; Cenovus’s ability to
produce on an unconstrained basis; Cenovus’s ability to access
sufficient insurance coverage to pursue development plans;
Cenovus’s ability to deliver safe and reliable operations and
demonstrate strong governance; and the assumptions inherent in
Cenovus’s updated 2022 Guidance available on cenovus.com.
The risk factors and uncertainties that could cause actual
results to differ materially from the forward‐looking information
in this news release include, but are not limited to: Cenovus’s
ability to realize the anticipated benefits of the Husky
transaction; the effectiveness of Cenovus’s risk management
program; the accuracy of estimates regarding commodity prices,
operating and capital costs and currency and interest rates; risks
inherent in the operation of Cenovus’s business; ability to
successfully complete development plans and improve asset
performance; and risks associated with climate change and Cenovus’s
assumptions relating thereto.
Except as required by applicable securities laws, Cenovus
disclaims any intention or obligation to publicly update or revise
any forward‐looking statements, whether as a result of new
information, future events or otherwise.
Readers are cautioned that the foregoing lists are not
exhaustive and are made as at the date hereof. Events or
circumstances could cause actual results to differ materially from
those estimated or projected and expressed in, or implied by, the
forward‐looking information. For additional information regarding
Cenovus’s material risk factors, the assumptions made, and risks
and uncertainties which could cause actual results to differ from
the anticipated results, refer to “Risk Management and Risk
Factors” and “Advisory” in Cenovus’s MD&A for the period ended
December 31, 2021 and to the risk factors, assumptions and
uncertainties described in other documents Cenovus files from time
to time with securities regulatory authorities in Canada (available
on SEDAR at sedar.com, on EDGAR at sec.gov and Cenovus’s
website at cenovus.com).
Specified financial measures This news release
contains references to certain specified financial measures that do
not have standardized meanings prescribed by IFRS. Readers should
not consider these measures in isolation or as a substitute for
analysis of the company’s results as reported under IFRS. These
measures are defined differently by different companies and,
therefore, might not be comparable to similar measures presented by
other issuers. For information on the composition of these
measures, as well as an explanation of how the company uses these
measures, refer to the Specified Financial Measures Advisory
located in Cenovus’s MD&A for the year ended December 31,
2021, dated February 7, 2022 and available on SEDAR at sedar.com,
on EDGAR at sec.gov and on Cenovus's website at cenovus.com,
which is incorporated by reference into this news release.
Upstream operating margin and Downstream operating
marginThe following table illustrates the items comprising
Upstream operating margin and Downstream operating margin.
|
Upstream |
|
Downstream |
Three Months EndedSeptember 30, 2021 ($ millions) |
Oil Sands
(i) |
|
Conventional
(i) |
|
Offshore
(i) |
|
Total |
|
CanadianManufacturing
(i) |
|
U.S. Manufacturing
(i) |
|
Retail
(i) |
|
Total |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Sales |
6,117 |
|
833 |
|
404 |
|
7,354 |
|
1,215 |
|
5,723 |
|
592 |
|
7,530 |
Less: Royalties |
669 |
|
40 |
|
24 |
|
733 |
|
— |
|
— |
|
— |
|
— |
|
5,448 |
|
793 |
|
380 |
|
6,621 |
|
1,215 |
|
5,723 |
|
592 |
|
7,530 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased Product |
825 |
|
445 |
|
— |
|
1,270 |
|
986 |
|
5,171 |
|
551 |
|
6,708 |
Transportation and Blending |
1,918 |
|
20 |
|
3 |
|
1,941 |
|
— |
|
— |
|
— |
|
— |
Operating |
616 |
|
135 |
|
49 |
|
800 |
|
99 |
|
413 |
|
25 |
|
537 |
Realized (Gain) Loss on Risk Management |
166 |
|
2 |
|
— |
|
168 |
|
— |
|
17 |
|
— |
|
17 |
Operating
Margin |
1,923 |
|
191 |
|
328 |
|
2,442 |
|
130 |
|
122 |
|
16 |
|
268 |
(i) Found in Note 1 of the September 30, 2021, Interim
Consolidated Financial Statements. Oil Sands results have been
restated for a change in presentation of product swaps and certain
third-party purchases used in blending and optimization activities.
Gross sales and purchased product increased by $3 million. See Note
3 in the December 31, 2021, Interim Consolidated Financial
Statements.
Total operating marginTotal
operating margin is the total of Upstream operating margin plus
Downstream operating margin.
|
Upstream (i) |
|
Downstream (i) |
|
Total |
($ millions) |
2021 |
|
Q4 2021 |
|
Q3 2021 |
|
2020 |
|
2021 |
|
Q4 2021 |
|
Q3 2021 |
|
2020 |
|
|
2021 |
|
Q4 2021 |
|
Q3 2021 |
|
2020 |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Sales |
27,844 |
|
8,237 |
|
7,354 |
|
9,708 |
|
26,673 |
|
8,135 |
|
7,530 |
|
4,815 |
|
|
54,517 |
|
16,372 |
|
14,884 |
|
14,523 |
Less: Royalties |
2,454 |
|
815 |
|
733 |
|
371 |
|
— |
|
— |
|
— |
|
— |
|
|
2,454 |
|
815 |
|
733 |
|
371 |
|
25,390 |
|
7,422 |
|
6,621 |
|
9,337 |
|
26,673 |
|
8,135 |
|
7,530 |
|
4,815 |
|
|
52,063 |
|
15,557 |
|
14,151 |
|
14,152 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased Product |
4,843 |
|
1,410 |
|
1,270 |
|
1,530 |
|
23,526 |
|
7,348 |
|
6,708 |
|
4,429 |
|
|
28,369 |
|
8,758 |
|
7,978 |
|
5,959 |
Transportation and Blending |
7,930 |
|
2,387 |
|
1,941 |
|
4,764 |
|
— |
|
— |
|
— |
|
— |
|
|
7,930 |
|
2,387 |
|
1,941 |
|
4,764 |
Operating |
3,241 |
|
865 |
|
800 |
|
1,476 |
|
2,258 |
|
689 |
|
537 |
|
785 |
|
|
5,499 |
|
1,554 |
|
1,337 |
|
2,261 |
Realized (Gain) Loss on Risk Management |
788 |
|
202 |
|
168 |
|
268 |
|
104 |
|
56 |
|
17 |
|
(21 |
) |
|
892 |
|
258 |
|
185 |
|
247 |
Operating
Margin |
8,588 |
|
2,558 |
|
2,442 |
|
1,299 |
|
785 |
|
42 |
|
268 |
|
(378 |
) |
|
9,373 |
|
2,600 |
|
2,710 |
|
921 |
(i) Found in Note 1 of the
December 31, 2021, or September 30, 2021, interim Consolidated
Financial Statements.Adjusted funds flow and free funds
flowThe following table provides a reconciliation of cash
from (used in) operating activities found in the
company’s Consolidated Financial Statements to adjusted funds
flow and free funds flow. Adjusted funds flow per share is
calculated by dividing adjusted funds flow by the weighted average
number of common shares outstanding during the period and may be
useful to evaluate a company’s ability to generate cash.
|
Twelve Months Ended December
31, |
|
Three Months Ended December
31, |
($ millions) |
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Cash From (Used in) Operating Activities (i) |
5,919 |
|
|
273 |
|
|
2,184 |
|
|
250 |
|
(Add) Deduct: |
|
|
|
|
|
|
|
Settlement of Decommissioning Liabilities |
(102 |
) |
|
(42 |
) |
|
(35 |
) |
|
(6 |
) |
Net Change in Non-Cash Working Capital |
(1,227 |
) |
|
198 |
|
|
271 |
|
|
(77 |
) |
Adjusted Funds
Flow |
7,248 |
|
|
117 |
|
|
1,948 |
|
|
333 |
|
Capital Investment |
2,563 |
|
|
841 |
|
|
835 |
|
|
242 |
|
Free Funds
Flow |
4,685 |
|
|
(724 |
) |
|
1,113 |
|
|
91 |
|
(i) Found in the December 31,
2021, interim Consolidated Financial Statements.Net
debtThe following table provides a reconciliation of
short-term borrowings and the current and long-term portions of
long-term debt found in Cenovus’s Consolidated Financial
Statements to net debt.
As at
($ millions) |
December 31,2021
(i) |
|
September 30,2021 (i) |
|
January 1, 2021
(ii) |
|
December 31, 2020
(i) |
Short-Term Borrowings |
79 |
|
|
48 |
|
|
161 |
|
|
121 |
|
Current Portion of Long-Term
Debt |
— |
|
|
545 |
|
|
— |
|
|
— |
|
Long-Term Debt |
12,385 |
|
|
12,441 |
|
|
14,043 |
|
|
7,441 |
|
Less: Cash and Cash
Equivalents |
(2,873 |
) |
|
(2,010 |
) |
|
(1,113 |
) |
|
(378 |
) |
Net Debt |
9,591 |
|
|
11,024 |
|
|
13,091 |
|
|
7,184 |
|
(i) Found in the December 31, 2021, or
September 30, 2021, interim Consolidated Financial
Statements.(ii) Includes December 31, 2020, balances
plus amounts assumed on January 1, 2021, in the Husky transaction.
Short-term borrowings of $40 million and long-term debt of $6.6
billion were assumed, and cash and cash equivalents of $735 million
were acquired, as presented in Note 5 of the December 31, 2021,
Consolidated Financial Statements.
Cenovus Energy Inc.Cenovus Energy Inc. is an
integrated energy company with oil and natural gas production
operations in Canada and the Asia Pacific region, and upgrading,
refining and marketing operations in Canada and the United States.
The company is focused on managing its assets in a safe, innovative
and cost-efficient manner, integrating environmental, social and
governance considerations into its business plans. Cenovus common
shares and warrants are listed on the Toronto and New York stock
exchanges, and the company’s preferred shares are listed on the
Toronto Stock Exchange. For more information, visit
cenovus.com.
Find Cenovus on Facebook, Twitter, LinkedIn, YouTube and
Instagram.
Cenovus contacts
Investors |
Media |
Investor Relations general line403-766-7711 |
Media Relations general line403-766-7751 |
Photos accompanying this announcement are available
athttps://www.globenewswire.com/NewsRoom/AttachmentNg/6d68575d-0536-4283-adc9-14d859774234
https://www.globenewswire.com/NewsRoom/AttachmentNg/0bce3de6-e947-488b-abd1-a897e88b0c1b
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