Cenovus Energy Inc.

Cenovus Energy Inc. delivered strong operating and financial performance in the first quarter of 2019, generating more than $1 billion of adjusted funds flow, $731 million of free funds flow and cash from operating activities of $436 million. The company's excellent financial results were driven by strong operating performance, a significant narrowing of light-heavy oil price differentials in early 2019 and Cenovus's low-cost structure and continued commitment to capital discipline.

Cenovus Energy Inc. delivered strong operating performance in 2018 but took a financial hit in the process, the company reported in its year-end results release. While solid production continued across Cenovus operations, a $1.3 billion loss in the fourth quarter pushed it to a net loss of $2.9 million for the year.

Cenovus Energy Inc. remains committed to increasing shareholder value through cost leadership, capital discipline and safe and reliable operations. These commitments, in combination with the company's high-quality upstream assets and joint ownership in strong refining assets, are expected to further strengthen Cenovus's ability to generate free funds flow and continue deleveraging its balance sheet in 2019.

Cenovus Energy Inc. generated more than $700 million of free funds flow and nearly $1 billion in adjusted funds flow in the third quarter, driven by exceptional operating performance in its oil sands and refining and marketing businesses. Oil sands production exceeded 376,000 barrels per day (bbls/d) with record-low operating costs for the second straight quarter. Cenovus's 50%-owned refineries, operated by Phillips 66, processed record oil volumes for the quarter. The company also benefited from a year-over-year increase in the price of Western Canadian Select (WCS), even as the price differential between WCS and West Texas Intermediate (WTI) more than doubled. While the wider differential impacted upstream cash generation, it created a feedstock cost advantage for the refining business which contributed strong operating margin. Cash from operations, together with $625 million in proceeds from the sale of Cenovus's Pipestone Partnership, helped reduce net debt to below $8.0 billion, down about $1.6 billion from the end of the second quarter. Cenovus also signed deals to move significant quantities of oil by rail over the next three years. Due to strong operational performance and efficient use of capital, the company has reduced forecast 2018 capital spending by about $250 million with essentially no change to its production guidance.

Cenovus Energy Inc. has signed three-year deals with major rail companies to transport approximately 100,000 barrels per day (bbls/d) of heavy crude oil from northern Alberta to various destinations on the U.S. Gulf Coast. The agreements involve moving oil with CN from Cenovus's Bruderheim Energy Terminal starting in the fourth quarter of 2018, and with CP through USD Partners' terminal in Hardisty, Alberta starting in the second quarter of next year, both ramping up through 2019.

Cenovus Energy Inc. and one of its subsidiaries have entered into an agreement to sell the general partnership that holds the Pipestone and Wembley natural gas and liquids business in northwestern Alberta (the "Pipestone Business") for cash proceeds of $625 million. The transaction also includes the Pipestone Business's 39% operated working interest in the Wembley gas plant. The sale is expected to close in the third quarter of 2018, subject to customary closing conditions.

Cenovus Energy Inc. has published its 2017 corporate responsibility report detailing the company's efforts to accelerate its environmental performance, protect the health and safety of its staff, invest in and engage with the communities where it operates and maintain the highest standards of corporate governance.

• Achieving the company's lowest ever total recordable injury frequency (TRIF) of 0.36
• Awarding 33 scholarships valued at $3,500 each for Aboriginal students pursuing a full-time degree, diploma or certified trade
• Donating over $10 million to more than 1,000 local community organizations with a focus on supporting youth, strong families and safe communities
• Raising nearly $1.5 million for more than 500 charitable organizations through our annual Thanks & Giving employee donation campaign
• Spending $240 million doing business with local Aboriginal-owned companies or joint ventures and surpassing $2.4 billion in Aboriginal business spending since the company's launch in 2009  
• Publishing Cenovus's Carbon Disclosure: Managing climate-related risks. The report features Cenovus's perspective on the transition to a lower-carbon future, carbon pricing and the ways that the company is managing and mitigating climate-related risks.   

Cenovus Energy Inc. achieved record production and delivered solid financial performance in the second quarter of 2018. The company had adjusted funds flow of $774 million, even after a realized risk management loss of $697 million, and generated free funds flow of $482 million. Cenovus ramped up its oil sands operations in the second quarter and achieved record high production volumes and record low per-barrel oil sands operating costs after using the dynamic storage capability of its reservoirs to strategically slow oil sands production in the first quarter due to market conditions. Following major planned turnarounds in the first quarter, Cenovus's Refining and Marketing segment also performed very well.

Cenovus Energy has reported a challenging first quarter of 2018, with a net loss of $914 million tied to a number of factors, including reduced production due to shipping concerns and heavy risk-management losses.

Cenovus Energy Inc. announced the appointment of Jonathan McKenzie as the company's next Chief Financial Officer.  He will replace Ivor Ruste who, as previously announced, will retire on April 30, 2018.