Cenovus Energy Inc. · TSX:CVE
Cenovus Energy — Credit Suisse Energy Summit 2016
24 slides from Cenovus Energy's conference presentation, February 2016
Slide 1: Delivering value in a volatile market
Delivering value in a volatile market
Slide 2: Strong integrated portfolio
Strong integrated portfolio TSX, NYSE | CVE Enterprise value C$14 billion Shares outstanding 833 million 2016F production Oil & NGLs 205 Mbbls/d Natural gas 385 MMcf/d 2015 proved & probable reserves 3.8 BBOE Bitumen Economic contingent resources* 9.3 Bbbls Discovered bitumen initially in place* 93
Slide 3: Continuing to focus on financial strength
Continuing to focus on financial strength Creating financial resilience 2016F net debt to capitalization* 60% • Significant liquidity 50% • $4.1 billion in cash at Dec. 31, 2015 Median: 38% • $4.0 billion committed credit facility, 40% fully undrawn, maturing Nov. 2017 / Nov. 2019 30% • Long-dated d
Slide 4: Achieving sustainable cost reductions
Achieving sustainable cost reductions Improving SAGD well cost performance Targeted SAGD well cost reductions* $ million/well pair 10.0 Examples: $9.4 9.0 • Demonstrated a 30% reduction in the number 8.0 of drilling days $7.0 • Reduced completion 7.0 time by approximately 30% 6.0 5.0 2014 basis Dril
Slide 5: Returns-focused capital allocation to top tier assets
Returns-focused capital allocation to top tier assets Manufacturing approach to development Oil sands production Mbbls/d 300 • Strong execution, 11 SAGD expansions 250 200 • Manufacturing approach to development 150 • 21% production compound annual 100 growth rate since 2007 50 0 2016F 1998 1999 200
Slide 6: Top tier reservoir performance at Christina Lake and Foster Creek
Returns-focused capital allocation to top tier assets Demonstrating top tier reservoir performance Mbbls/d Christina Lake daily production 160 • Optimization completed Q4 2015 production capacity 140 • Phase F Q3 2016F • Ramp-ups expected over 12 months 120 100 80 60 40 20 0 Jan-10 May-10 Sep-10 Jan
Slide 7: Improved start-up procedures and accelerating production from mature pads
Returns-focused capital allocation to top tier assets Improved start-up procedures on new pads Recovery factor 10% W08 (2015) E20 (2008) 8% 6% 4% Steam circulation start-up 2% 0% 0 50 100 150 200 250 300 350 Days on production • Despite the E20 (2008) pad having superior quality, improving conforman
Slide 8: Improved conformance and conventional free cash flow
Returns-focused capital allocation to top tier assets Accelerating production with improved conformance Illustrative SAGD production profile Poor conformance Improved conformance Wedge Wells drilled to reduce impact of poor conformance Improving conformance should reduce need for Wedge Wells Continu
Slide 9: Downstream integration reduces cash flow volatility
Continuing to optimize the portfolio Integration continues to reduce cash flow volatility • Refineries have access to discounted crudes • Wood River accesses multiple pipelines – Keystone, Express-Platte, Mustang, Ozark • Borger has access to Canadian heavy, West Texas Sour and growing Permian suppl
Slide 10: Pipeline expansions and rail capacity for market access
Continuing to optimize the portfolio Committing to pipeline expansions for market access Current pipeline access: • West Coast: Trans Mountain – 11,500 bbls/d Alberta Kitimat Edmonton • US Gulf Coast: Hardisty Enbridge USGC/Flanagan South 75,000 bbls/d Vancouver Montreal Saint John Adding pipeline c
Slide 11: Supplemental information
Supplemental information Our Christina Lake SAGD project is one of our cornerstone oil sands assets.
Slide 12: Low capital cost structure and high quality resource
Committed to maintaining low capital cost structure Illustrative full cycle SAGD costs Growth capital: • Phase expansion (includes all infrastructure and initial wells) $2 - $3/bbl • Phase debottlenecking and optimization • Numerator for capital efficiency calculation Sustaining capital: • All wells
Slide 13: Foster Creek and Christina Lake remain top priority
Foster Creek and Christina Lake remain top priority High priority Conventional Oil sands and downstream sustaining capital Emerging plays Dividend FCCL growth Capital Growth projects: allocation Foster Creek/Christina Lake priorities Narrows Lake Conventional Emerging projects Low priority Top tier
Slide 14: Conventional costs and SAGD portfolio growth potential
Conventional oil operating costs $/bbl 20 15 10 5 0 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Conventional oil Q4 operating costs down 17% year-over-year SAGD portfolio provides development opportunity and growth potential 2P bitumen Bitumen best estimate economic contingent reserves (Billions resourc
Slide 15: Narrows Lake and Telephone Lake development
Progressing engineering at Narrows Lake Christina Lake region Narrows Lake commercial project: • First commercial SAGD project to incorporate solvent aided process (SAP) • Evaluating development options to leverage existing infrastructure at nearby Christina Lake project • Expected initial productio
Slide 16: Grand Rapids and oil sands technology
Continuing to evaluate Grand Rapids SAGD pilot update: Greater Pelican region • Operating since 2010 • Two well pairs currently producing • Third pilot well pair completed Q1 2015; steam circulation began in Q2 2015 • Pilot has been deferred Commercial project: Grand Rapids • Received regulatory app
Slide 17: Social and governance performance
Creating value through social and governance performance Committed to good governance • SER Committee of the Board provides oversight of DJSI World environment and sustainability performance Index and North American Index • Enterprise Risk Management program, practices and policy ensure active and e
Slide 18: Mitigating commodity price risk
Mitigating commodity price risk 2016 Hedges at February 11, 2016 Volume hedged Hedge price Production 2016F Volume % hedged Crude – Brent Fixed Price January – June 17,000 bbls/d C$75.80/bbl January – June 38,000 bbls/d US$46.62/bbl January – December 10,000 bbls/d US$66.93/bbl July - December 5,000
Slide 19: Cenovus oil sands land map
T100 R1W5 R20W4 R15W4 R10W4 R5W4 R1W4 T100 Birch Wabiskaw/ T95 McMurray T95 Grosmont Telephone Lake Steepbank T90 T90 East McMurray Fort McMurray ^ GREATER PELICAN REGION BOREALIS REGION T85 Saskatchewan Wabiskaw Grosmont T85 Alberta Grand Rapids T80 CHRISTINA LAKE REGION T80 Leismer Hardy Narrows L
Slide 20: Forward-looking information
FORWARD-LOOKING INFORMATION This presentation contains certain forward-looking statements and other information (collectively “forward-looking information”) about Cenovus’s current expectations, estimates and projections, made in light of the company’s experience and perception of historical trends.
Slide 21: Oil and gas information advisory
Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. For a full discussion of Cenovus's material risk factors, see “Risk Factors” in our AIF or Form 40-F for the year ended December 31, 2015, “Risk Management” in our most recent and annual Management’
Slide 22: 2016 Corporate Guidance
2016 Corporate Guidance - C$, before royalties February 11, 2016 UPSTREAM OIL SANDS Production Capital expenditures Operating costs Effective royalty Steam to oil (Mbbls/d) ($ millions) ($/bbl) rates (%) ratio Foster Creek 66 - 72 325 - 350 Fuel 2.75 - 3.25 1 - 3 2.6 - 3.0 Non-fuel 8.00 - 10.00 Tota
Slide 23: Forward-looking information (guidance)
FORWARD-LOOKING INFORMATION. This document provides guidance on certain aspects of our business and includes forward-looking statements and other information (collectively “forward-looking information”) about our current expectations, estimates and projections, made in light of our experience and pe
Slide 24: Investor relations contacts
Investor relations contacts Kam Sandhar Director, Investor Relations kam.sandhar@cenovus.com 403.766.5883 Graham Ingram Manager, Investor Relations graham.ingram@cenovus.com 403.766.2849 Michelle Cheyne Analyst, Investor Relations michelle.cheyne@cenovus.com 403.766.2584 Cenovus Energy Inc. 500 Cent