Cenovus Energy provides corporate update - Seite 2

Dividend suspension
Cenovus had based its ability to provide a sustainable dividend from free funds flow on a West Texas Intermediate (WTI) price environment of US$45/bbl. In the context of recent commodity price forecasts and economic, market and business conditions in the oil and gas industry, Cenovus has decided to suspend its quarterly dividend.

Strong liquidity
Besides having top-tier assets and one of the lowest cost structures in its industry, Cenovus has a strong balance sheet, which places it in a solid position to weather the current market environment. The company has $4.5 billion of undrawn committed credit facilities, with renewals in late 2022 and late 2023, a further $1.6 billion of demand lines and no bond maturities until late 2022. These provide ample liquidity and runway to sustain its operations through a prolonged market downturn.

Additional cost reductions
The new capital expenditure guidance of $750 million to $850 million is a 43% reduction from the budget released in December 2019 and an incremental $150 million reduction from the capital guidance update provided March 9, 2020. The remaining capital budget is focused on sustaining oil sands production and refining operations. Cenovus is confident the revised capital spend will be sufficient to ensure ongoing safe and reliable operations and adherence to regulatory commitments and will enable the company to proceed with necessary maintenance.

The nature of Cenovus’s oil sands and conventional assets enables the company to safely ramp production up and down quickly to respond to market conditions and maximize returns, as has been demonstrated over the past couple of years. When the company announced initial capital expenditure reductions and a ramp down of its rail business on March 9, 2020, it also reduced its forecast oil sands production by 6% to between 350,000 and 400,000 barrels per day (bbls/d), and total production by 5% to between 432,000 and 486,000 barrels of oil equivalent per day (BOE/d), while maintaining its Deep Basin production forecast. Cenovus expects those updated production ranges can still be achieved with the additional capital expenditure reductions announced today. The company has managed its assets through similar commodity price events in the recent past and is confident in its operating practices.