Cenovus Energy has announced a significant increase in its third-quarter profit, largely propelled by unprecedented oil sands output and robust performance from its refineries. This strong financial showing comes despite a backdrop of fluctuating crude prices, underscoring the company’s operational efficiency and strategic execution.
Key Takeaways
- Cenovus’s third-quarter profit saw a notable rise, driven by record oil sands production and high refinery utilisation.
- The company anticipates the MEG transaction shareholder vote will proceed next week, following a brief postponement for additional regulatory disclosures.
- Capital spending is projected to decrease in 2026 as major projects near completion.
Record Output and Refinery Performance
Cenovus reported a record output of 832,900 barrels of oil equivalent per day (boepd) in the third quarter, a substantial increase from the 771,300 boepd recorded in the same period last year. This growth was primarily attributed to enhanced volumes from its Foster Creek and Christina Lake projects. Complementing this production surge, the company’s refining throughput also reached a new high of 710,700 barrels per day (bpd), up from 642,900 bpd a year prior. U.S. refineries operated at an impressive 99% utilisation, with per-barrel costs decreasing by 24% year-on-year.
Outlook and Strategic Developments
Cenovu’s CEO, Jon McKenzie, described 2025 as an "inflection point" for the company. Key developments include the anticipated commencement of drilling at the West White Rose offshore project by year-end and the near completion of significant oil sands expansion projects at Foster Creek and Narrows Lake in northern Alberta. These advancements are expected to boost future production, with forecasts indicating an increase to approximately 950,000 bpd by 2028, compared to the 805,000-825,000 bpd range projected for 2025.
MEG Transaction Update
The company provided an update on its proposed transaction with MEG. A shareholder vote, initially postponed this week to allow for further regulatory disclosures, is now expected to proceed as planned next week. McKenzie clarified that the regulatory inquiry stems from a complaint by a former MEG employee holding a small number of shares. He expressed confidence that this inquiry would not impact the transaction, noting strong support from MEG shareholders, with 86% of voted shares favouring the deal.
Financial Performance
Cenovus’s net income for the three months ending September 30 climbed to C$1.29 billion ($920 million), or 72 Canadian cents per share, a significant improvement from the C$820 million, or 42 Canadian cents per share, reported in the previous year. Following this announcement, U.S.-listed shares of Cenovus saw a modest increase in midday trading.
