Cenovus Energy Inc (USA)(NYSE:CVE) reported that it continued to report reliable and strong operating performance in 2Q2016. The strong operational performance included a 9% surge in combined oil sands production and a decline of 24% in per-barrel oil sands operating expenses versus the same quarter of 2015.
Cenovus financial performance in 2Q2016 was negatively impacted by the considerable drop in natural gas and crude oil prices from the preceding year’s quarter. While, a jump in natural gas and crude oil prices from the recorded multi-years lows in 1Q2016 contributed to enhanced cash flow against the first quarter in this year.
The performance
Brian Ferguson, the CEO and President of Cenovus, said that they have achieved considerable sustainable enhancements in company’s cost structure in last one year. They remain wary on costs to capitalize on competitive role in this volatile and challenging commodity price environment. The strong operational performance and declined cost base, coupled with an enhancement in benchmark natural gas and oil prices from the lows recorded earlier this year, resulted in a robust second quarter.
Ferguson added that the firm remains on track with its strategy to bring on its 2 new oil sands growth phases. They are working to get capital of up to $500 million, and reduction of general and administrative and operating costs when compared with its initial set budget for 2016. The oil sands operating expenses in per-barrel terms dropped 24% and conventional crude oil operating expenses declined 9% compared with 2Q2015.
The highlights
Cenovus announced that the Foster Creek production stood at nearly 69,000 barrels per day net in June. The production in 2Q2016 was approximately 65,000 bbls/d net, up 11% over comparable period in 2015. It indicates that Foster Creek can register the volumes of more than 70,000 bbls/d net in this year. In addition, the production at Christina Lake jumped 8% YoY to over 78,000 bbls/d net in reported quarter.
