Cenovus announces 2025 capital budget and corporate guidance
Rhea-AI Summary
Cenovus Energy has announced its 2025 corporate guidance, planning capital investment of $4.6-5.0 billion to deliver upstream production of 805,000-845,000 BOE/d and downstream crude unit utilization of 90-95%. The plan includes $3.2 billion in sustaining capital and $1.4-1.8 billion for growth projects.
Key highlights include a 4% increase in upstream production compared to 2024, first oil expected from Narrows Lake by mid-2025, and installation of West White Rose offshore facilities. The company will maintain oil sands operating expenses at $8.50-9.50/bbl and reduce U.S. refining operating expenses by 7%. Total downstream crude throughput is projected at 650,000-685,000 bbls/d, representing a 4% increase from 2024.
The company plans to continue returning 100% of excess free funds flow to shareholders while maintaining net debt near $4.0 billion.
Positive
- 4% increase in upstream production compared to 2024
- 4% increase in downstream crude throughput vs 2024
- 7% decrease in U.S. Refining operating expenses
- IT upgrade costs reduced to $50M from planned $250M
- 100% of excess free funds flow to be returned to shareholders
Negative
- Significant turnaround activities planned affecting production in Q2 2025
- Expected 10,000-12,000 bbls/d production impact from maintenance activities
News Market Reaction
On the day this news was published, CVE declined 1.37%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
CALGARY, Alberta, Dec. 12, 2024 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) today announced its 2025 corporate guidance, which includes capital investment of
“Cenovus will deliver important milestones on our major growth projects in 2025, including achieving first oil from Narrows Lake, installation of the West White Rose offshore facilities and commencement of drilling, and preparations for first steam at the Foster Creek optimization project,” said Jon McKenzie, Cenovus President & Chief Executive Officer. “We’re entering the final year of a three-year investment cycle, which will drive planned production growth of 150,000 BOE/d by the end of 2028 and enable significant expansion of free funds flow. We will continue to be focused on controlling costs, improving the profitability of our strategic downstream business and optimizing our advantaged portfolio to deliver value for our shareholders.”
2025 highlights:
- Capital investment of between
$4.6 billion to$5.0 billion , including approximately$3.2 billion of maintenance and sustaining capital and$1.4 billion to$1.8 billion of growth capital. - Upstream production of between 805,000 BOE/d and 845,000 BOE/d, an increase of approximately
4% 1 compared with 2024. - Total downstream crude throughput of between 650,000 barrels per day (bbls/d) and 685,000 bbls/d, an increase of approximately
4% 1 compared with 2024, representing crude unit utilization of between90% and95% . - Oil sands non-fuel operating expenses per barrel of between
$8.50 and$9.50 , held flat compared with 2024. - U.S. Refining operating expenses of
$10.00 /bbl to$12.00 /bbl excluding turnaround costs, representing a decrease of7% 1 compared with 2024. - General and administrative (G&A) costs are expected to remain flat relative to 2024, and expenses related to IT systems upgrades are projected to decrease significantly as the project will be recalibrated through 2025.
2025 Guidance
| (C$ before royalties) | Production / Throughput (MBOE/d / Mbbls/d) | Capital investments ($Millions) | Operating costs3 ($/BOE) | Turnaround expenses ($MM) |
| Upstream2 | ||||
| Oil sands | 615 - 635 | 2,700 - 2,800 | 10.75 - 12.75 | |
| Conventional | 125 - 135 | 350 - 400 | 11.00 - 12.00 | |
| Atlantic | 10 - 15 | 900 - 1,000 | 50.00 - 60.00 | |
| Asia Pacific | 55 - 60 | 10.00 - 11.00 | ||
| Total upstream | 805 - 845 | 3,950 - 4,200 | ||
| Downstream | ||||
| Canadian Refining | 100 - 105 | 12.00 - 14.00 | - | |
| U.S. Refining | 550 - 580 | 10.00 - 12.00 | 440 - 520 | |
| Total Downstream | 650 - 685 | 650 - 750 | ||
| Total | 4,600 - 5,000 | |||
1 Percentage change when compared to actual nine months ended September 30, 2024.
2 See Q3 2024 Management’s Discussion and Analysis for summary of production by product type as at September 30, 2024.
3 Upstream operating expenses are divided by sales volumes. Downstream costs exclude expensed turnaround costs and are divided by total processed inputs.
Note: Totals may not add due to rounding. Cenovus’s full 2025 guidance can be found at cenovus.com.
2025 guidance
Oil Sands
Oil sands production guidance for 2025 is 615,000 bbls/d to 635,000 bbls/d. The guidance range includes the impact of turnarounds at Foster Creek and Sunrise, as well as planned maintenance at Christina Lake, with an expected combined annualized impact of approximately 10,000 bbls/d to 12,000 bbls/d. Production is expected to be lower in the second quarter of 2025, reflecting turnaround and maintenance activity, with production expected to ramp up into the second half of 2025. Oil sands non-fuel operating costs are expected to be in the range of
Cenovus plans to invest
Conventional
The company plans to invest between
Offshore
Total Offshore production in 2025 is expected to be in the range of 65,000 BOE/d to 75,000 BOE/d. This includes between 10,000 bbls/d and 15,000 bbls/d in the Atlantic region, reflecting the return of production from the White Rose field. Production from the Asia Pacific region is expected to be between 55,000 BOE/d and 60,000 BOE/d.
Capital spending in the Offshore segment of between
Downstream
Crude throughput is expected to be between 650,000 bbls/d and 685,000 bbls/d, an increase of approximately
Crude throughput in Canadian Refining is expected to be between 100,000 bbls/d and 105,000 bbls/d, with operating costs of between
Crude throughput in U.S. Refining is expected to be 550,000 bbls/d to 580,000 bbls/d, an increase of
Corporate
G&A expenses, not including stock-based compensation, are expected to be in the range of
2025 planned maintenance
The following table provides details on planned maintenance and turnaround activities in 2025 and expected production or throughput impacts, as well as projected expensed turnaround costs in our downstream businesses.
4 Percentage change when compared to actual nine months ended September 30, 2024.
Potential quarterly production/throughput impact
| (MBOE/d or Mbbls/d) | Q1 | Q2 | Q3 | Q4 | Annualized impact |
| Upstream | |||||
| Oil Sands | - | 30 - 40 | 5 - 7 | - | 10 - 12 |
| Offshore | - | - | 4 - 6 | - | 1 - 2 |
| Conventional | - | - | - | - | - |
| Downstream | |||||
| Canadian Refining | - | - | - | - | - |
| U.S. Refining | 7 - 10 | 35 - 45 | 2 - 4 | 6 - 10 | 13 - 17 |
Potential turnaround expenses
| ($ Millions) | Q1 | Q2 | Q3 | Q4 | Annualized impact |
| Downstream | |||||
| Canadian Refining | - | - | - | - | - |
| U.S. Refining | 110 - 135 | 210 - 240 | 80 - 95 | 40 - 50 | 440 - 520 |
Upstream maintenance activity in 2025 includes planned turnarounds at the company’s Foster Creek and Sunrise oil sands facilities as well as maintenance at White Rose and Christina Lake. In the downstream business, one of Cenovus’s operated refineries will be conducting a turnaround in the second quarter and other planned maintenance activities will be performed in both the spring and fall of 2025. U.S. Refining turnaround expense in the second half of the year primarily reflects procurement and planning in preparation for upcoming turnarounds in 2026. The production and throughput impacts of these planned turnarounds are reflected in Cenovus’s Corporate Guidance assumptions.
For further details see the company’s 2025 guidance available here.
Advisory
Basis of Presentation
Cenovus 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).
Barrels of Oil Equivalent
Natural 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.
Forward-looking Information
This news release contains forward-looking statements and other information (collectively referred to as “forward-looking information”) about the company’s current expectations, estimates and projections, made in light of the company’s experience and perception of historical trends. Although the company 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.
This forward-looking information is current only as of the date indicated above. Readers are cautioned not to place undue reliance on forward-looking information as actual results may differ materially from those expressed or implied. Cenovus undertakes no obligation to update or revise any forward-looking information except as required by law.
Forward-looking information in this news release is identified by words such as “advance”, “anticipate”, “commence”, “continue”, “deliver”, “develop”, “direct”, “expect”, “focus”, “hold”, “increase”, “maintain”, “opportunity”, “optimize”, “plan”, “potential”, “progress”, “project” and “will” or similar words or expressions and includes suggestions of future outcomes, including, but not limited to, statements about: upstream production, including timing and amounts of changes thereto; downstream utilization; capital investment; production growth; cost control; returns to shareholders; progressing growth projects; free funds flow growth; improving profitability; portfolio optimization; delivering value for shareholders; impacts of turnarounds and planned maintenance; operating costs; turnaround costs; drilling; capital allocation; throughput; reliability; general and administrative expenses; optimization; growth; safety; strategic investments; planned turnarounds; environmental performance; the West White Rose project; the tie-back of Narrows Lake; growing production at Foster Creek, Sunrise and in Conventional Heavy Oil. The 2025 guidance, as updated December 11, 2024 and available on cenovus.com, assumes: Brent prices of US
In addition to the price assumptions disclosed herein, the factors or assumptions on which the forward-looking information in this news release is based include: projected capital investment levels, the flexibility of capital spending plans and associated sources of funding; our ability to finance capital expenditures and expenses on a cost-effective basis; achievement of further operating efficiencies, cost control and reductions and sustainability thereof; our forecast production volumes are subject to potential ramp down of production based on business and market conditions; foreign exchange rate, including with respect to our U.S. dollar debt and refining capital and operating expenses; future improvements in availability of product transportation capacity; realization of expected impacts of storage capacity within oil sands reservoirs; the ability of our refining capacity and existing pipeline commitments to mitigate a portion of heavy oil volumes against wider differentials; planned turnaround and maintenance activity at both upstream and downstream facilities; the effectiveness of investments in cyber security resilience and standardization of data governance; accounting estimates and judgments; our ability to obtain necessary regulatory and partner approvals; the existence of a favourable and stable international trade environment, including tariffs; the existence of a favourable and stable regulatory framework concerning greenhouse gas emissions that includes, among other things, support from various levels of government, including financial support; and the successful and timely implementation of capital projects or stages thereof, including those associated with our environmental, social and governance targets.
The information in this news release is also subject to risks disclosed in our annual Management’s Discussion and Analysis (MD&A) for the period ended December 31, 2023, supplemented by updates in our most recent quarterly MD&A, available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and at cenovus.com.
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.
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Cenovus contacts:
Investors
Investor Relations general line
403-766-7711
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403-766-7751
FAQ
What is Cenovus Energy's (CVE) capital investment budget for 2025?
What is CVE's expected upstream production guidance for 2025?
When will Cenovus's West White Rose project achieve first oil?
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How much will Cenovus spend on IT systems upgrades in 2025?
