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Cenovus Q3 profit soars to $510M

Oil sands operator and refiner Cenovus Energy reports net profits more than doubled to $510 million as output rose and the company booked a big hedging gain.


October 27, 2011
by CANADIAN PRESS

CALGARY: Oil sands operator and refiner Cenovus Energy Inc. reports its net profits more than doubled to $510 million from $295 million as output rose and the company booked a big hedging gain.

The Calgary company said three-month revenues after royalties rose to $3.86 billion from $2.96 billion. Meanwhile, cash flow rose 56% to $793 million from $509 million as the company benefited from higher oil prices and improved refining results.

Meanwhile, output at its Foster Creek and Christina Lake oil sands projects was more than 66,000 barrels a day for the company.

The company also booked a hedging gain of $283 million in the quarter, compared with a hedging gain of $45 million in the same year-earlier period.

“We delivered strong operating performance from our oil properties in the third quarter and continued to meet the milestones the company has set out to build long-term value for our shareholders,” said Brian Ferguson, president and CEO.

“The company generated another quarter of excellent financial performance as higher crude oil prices and stronger refining results contributed to a significant increase in cash flow.”

The company recently announced it sold a marine terminal near Kitimat, BC to Shell Canada Ltd., which has been looking to export liquefied natural gas off of the province’s northern coast. Financial terms were not disclosed.

Cenovus said it aims to produce about 500,000 barrels of oil per day by the end of the decade. The steep increase will be largely driven by a six-fold jump in oil sands production by the end of 2021.

All Cenovus oil sands developments use steam to liquefy the sticky bitumen deep underground so it can be more easily drawn to the surface.

© 2011 The Canadian Press