Cenovus Energy Inc. · TSX:CVE
Cenovus Energy — Q2 2015 Earnings Presentation
11 slides from Cenovus Energy's earnings presentation, Jul 30, 2015
Slide 1: Strategic update
July 30, 2015 Strategic update
Slide 2: Advisory
Advisory FINANCIAL INFORMATION Non-GAAP measures - Certain financial measures in this presentation do not have a standardized meaning as prescribed by International Financial Reporting Standards (IFRS) such as cash flow, free cash flow, debt, net debt, capitalization, adjusted earnings before intere
Slide 3: Advisory
Advisory FORWARD-LOOKING INFORMATION The risk factors and uncertainties that could cause Cenovus's actual results to differ materially, include: risks inherent to completion of the crude-by-rail trans-loading facility acquisition announced in Cenovus's news release on June 4, 2015, including obtaini
Slide 4: Delivering value in a volatile market
Delivering value in a volatile market • Delivering a moderate pace of growth • Continued focus on financial strength • Implementing sustainable reductions in our cost structure • Returns focused organic capital allocation to oil sands • Continuing to optimize the portfolio
Slide 5: Continued focus on financial strength
Continued focus on financial strength • Strong balance sheet 2016E dividend payout ratio • Heritage Royalty Limited Partnership (HRP) % of cash flow sale generated $3.3 billion of proceeds 50% • $4.9 billion cash on the balance sheet • net debt to capitalization of 7%, net debt to 40% adjusted EBITD
Slide 6: Top tier SAGD operating costs
Implementing sustainable reductions in our cost structure Top tier SAGD operating costs $/bbl 20 Foster Creek Christina Lake Industry average 15 10 5 0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Foster Creek operating costs down 30% year-over-year Christina Lake operating costs down 32% year-over-year
Slide 7: Conventional oil operating costs
Implementing sustainable reductions in our cost structure Conventional oil operating costs $/bbl 25 Cenovus Industry average 20 15 10 5 0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Conventional oil operating costs down 18% year-over-year Source: Public company disclosure.
Slide 8: Exceeding initial 2015 cost reduction targets
Implementing sustainable reductions in our cost structure Exceeding initial 2015 cost reduction targets $ million 500 Additional 2016 opportunities • Additional staff reductions 400 • Further reduction in costs 300 • zero based modules Original target ($200 million) • supplier reductions 200 • drill
Slide 9: Returns focused organic capital allocation
Returns focused organic capital allocation High priority Conventional Oil sands & downstream sustaining capital Emerging plays Dividend (20% - 25% of cash flow) FCCL growth Capital Growth projects: Foster Creek/Christina Lake allocation Narrows Lake Conventional Emerging projects Low priority Assumi
Slide 10: Continuing to optimize the portfolio
Continuing to optimize the portfolio Conventional oil & natural gas Cumulative free cash flow • Focusing a modest amount of incremental $ billion capital in SE Alberta and Weyburn ($70 MM) 10.0 • No plans for spending at Pelican Lake and Suffield 8.0 • Scalable and flexible capital program • $5.0 bi
Slide 11: Investor relations contacts
Investor relations contacts Kam Sandhar Director, Investor Relations [email protected] 403.766.5883 Graham Ingram Manager, Investor Relations [email protected] 403.766.2849 Anna Kozicky Senior Analyst, Investor Relations [email protected] 403.766.4277 Steven Murray Senior Analys