Cenovus Energy Inc. · TSX:CVE
Cenovus Energy — Investor Day (December 2021)
84 slides from Cenovus Energy's investor day presentation, Dec 7, 2021
Slide 1: Investor Day
INVESTOR DAY cenovus ENERGY
Slide 2: Cenovus at a Glance
CENOVUS AT A GLANCE TSX, NYSE | CVE Market capitalization $32 billion 2022E production 800 MBOE/d • Oil Sands 600 Mbbls/d • Conventional 126 MBOE/d • Offshore 70 MBOE/d Upgrading and refining 660 Mbbls/d capacity 2020 proved & probable 8.4 BBOE reserves Reserves life index 30+ years Note: Market cap
Slide 3: High-Quality, Diverse & Integrated Portfolio
HIGH-QUALITY, DIVERSE & INTEGRATED PORTFOLIO Geographic diversification, physical integration and market access Rainbow 2022E Production Sunrise (MBOE/d) Atlantic Offshore Christina Lake Canada 70 Foster Creek Deep Basin Tucker Conventional Lloyd Upgrader & Refinery 126 Lloyd Thermal 780-820 MBOE/d
Slide 4: Introduction
INTRODUCTION Sherry Wendt - VP, Investor Relations
Slide 5: Agenda
AGENDA Introduction Sherry Wendt, VP Investor Relations Strategic Overview Alex Pourbaix, President & CEO Financial Framework & Jeff Hart, EVP & CFO Shareholder Returns Strategy Kam Sandhar, EVP Strategy & Corporate Development Sustainability & ESG Rhona DelFrari, CSO & SVP Stakeholder Engagement Br
Slide 6: Strategic Overview
STRATEGIC OVERVIEW Alex Pourbaix - President & CEO
Slide 7: 2021 Key Results to Date
2021 KEY RESULTS TO DATE Continuing to deliver value Strengthened Achieved Optimized the Increased Operational balance sheet synergies portfolio shareholder strength returns ~805 MBOE/d Achieved interim Captured over Integrated energy Commenced upstream production milestone of $1 billion of leader w
Slide 8: Integrated Energy Leader Positioned to Deliver Value
INTEGRATED ENERGY LEADER POSITIONED TO DELIVER VALUE Our strategy positions us to drive value and returns Strategic objectives Top-tier safety Returns-focused performance Cost Financial Free funds flow capital and ESG leadership discipline growth allocation leadership Deliver top-tier Strive to maxi
Slide 9: Global Energy Demand Will Continue to Require Oil
GLOBAL ENERGY DEMAND WILL CONTINUE TO REQUIRE OIL Affordable and reliable energy is critical to global 9 quality of life Global oil demand and natural decline of supply MMbbls/d 120 Oil demand forecasts 100 Implied oil supply gap 80 60 40 Oil supply base 20 decline at ~6% 0 Global base supply Oil de
Slide 10: Canadian Oil Is Well Positioned in Energy Transition
CANADIAN OIL IS WELL POSITIONED IN ENERGY TRANSITION Cenovus uniquely positioned as an oil supplier of choice Canadian oil sands lend well to decarbonization Cenovus is a leader in innovation and continuous investments required for world net zero ambition improvement • Large, long-life, low-cost and
Slide 11: Top-Tier Safety and ESG Performance
TOP-TIER SAFETY AND ESG PERFORMANCE Positioned to be resilient and relevant in any future scenario • Ambitious ESG targets in five focus areas, including absolute emissions reduction of 35% by year-end 2035 • Technology and collaboration are key to reducing our GHG emissions and setting us on a path
Slide 12: Financial Discipline
FINANCIAL DISCIPLINE Financial framework guides our capital decisions • Maintain targeted debt levels; position for resiliency through the cycle while optimizing our Reduced capital and cost structure Financial funds resilience • Invest in projects with expected above cost of flow volatility capital
Slide 13: Highlights of Five-Year Plan
HIGHLIGHTS OF FIVE-YEAR PLAN Operating Strength • Maintaining production of ~800 MBOE/d • Downstream throughput increase ~14% Financial Discipline • Average sustaining capital ~$2.4 billion per year • ~7% Upstream unit operating cost reduction • Holding corporate costs flat • Potential for five-year
Slide 14: Plan Delivers Incremental Value While Reducing Emissions
PLAN DELIVERS INCREMENTAL VALUE WHILE REDUCING EMISSIONS Disciplined capital allocation sustains increased production and grows throughput Disciplined capital outlay Production and throughput Reducing GHG emissions $ billions MBOE/d Mt CO2e/yr 4.0 over five-year plan 1,000 over five-year plan 40 ove
Slide 15: Free Funds Flow and Earnings Growth Across Cycles
FREE FUNDS FLOW AND EARNINGS GROWTH ACROSS CYCLES Plan positions significant cumulative free funds flow over five years Compelling free funds flow and earnings across the five-year plan $ billions 8.0 7.0 Free funds flow average of over $4.5 billion per year 6.0 at US$60 WTI scenario 5.0 $75 Case Cu
Slide 16: 2022 Budget Highlights
2022 BUDGET HIGHLIGHTS Continuing operational strength and capital discipline • ~4% upstream production increase1 • Over 6% downstream throughput increase2 • Line of sight to net debt below $8 billion in 20223 • Holding cost structure flat3 • Over $2 billion expected shareholder returns • NCIB in pl
Slide 17: Cenovus Value Proposition
CENOVUS VALUE PROPOSITION Operational Financial ESG Sustainably growing strength discipline leadership shareholder returns Maintaining upstream Free funds flow Targeting GHG Expected shareholder production ~800 CAGR of 3% absolute emissions1 returns over MBOE/d over five years reduction of $2 billio
Slide 18: Financial Framework
FINANCIAL FRAMEWORK Jeff Hart - EVP & CFO
Slide 19: Our Financial Framework
OUR FINANCIAL FRAMEWORK Principles and approaches that guide our decisions Financial Reduce funds flow Sustainably grow Returns-focused resilience volatility shareholder capital allocation returns Reduce net debt to Diversify revenues Build a sustainable Invest in projects at EBITDA to ~1.0-1.5x at
Slide 20: Financial Resilience
FINANCIAL RESILIENCE Optimizing our capital structure to reduce risk and increase capital flexibility US$ millions Schedule of bond maturities1 1,750 • Increased weighted average 1,500 bond maturity from ~10 years 1,250 to ~12.5 years in 2021 1,000 750 • Achieved gross deleveraging of 500 US$900 mil
Slide 21: Reinforcing Financial Resilience by Enhancing Balance Sheet
REINFORCING FINANCIAL RESILIENCE BY ENHANCING BALANCE SHEET Long-term leverage target of 1.0-1.5x net debt to adjusted EBITDA at US$45 WTI Demonstrated significant capacity to reduce debt Enhancing net debt to cash flow positioning Net debt Net debt to cash flow 2022E ($ billions) 1.5x $13.3 14.0 $1
Slide 22: Balanced Portfolio Reduces Funds Flow Volatility and Risk
BALANCED PORTFOLIO REDUCES FUNDS FLOW VOLATILITY AND RISK Benefits of integration and diversification evident in operating margin stability Illustrative legacy operating margin volatility Illustrative combined Cenovus operating margin volatility 80.0% 80.0% Legacy Husky Legacy Cenovus Frequency 80.0
Slide 23: Positioned to Benefit in a Rising Commodity Price Environment
POSITIONED TO BENEFIT IN A RISING COMMODITY PRICE ENVIRONMENT Built for resilience and excess free funds flow $ billions Plan generates excess free funds flow across price cycles 12.0 10.0 8.0 $75 Case 6.0 $60 Case 4.0 $45 Case 2.0 0.0 2022F 2023F 2024F 2025F 2026F Excess free funds flow @ US$75 WTI
Slide 24: Shareholder Returns Strategy
SHAREHOLDER RETURNS STRATEGY Kam Sandhar – EVP, Strategy & Corporate Development
Slide 25: Principled Approach to Shareholder Returns
PRINCIPLED APPROACH TO SHAREHOLDER RETURNS Increasing capacity to grow returns to shareholders over the plan Dividend principles Dividend capacity at US$45 WTI Annual dividend capacity ($ millions) • Built into the capital structure 1,200 • Sustainable at US$45 WTI – capital programs and base divide
Slide 26: Share Repurchase Principles
SHARE REPURCHASE PRINCIPLES Normal course issuer bid (NCIB) already underway Share repurchase principles Illustrative share repurchase evaluation • Share buybacks will be opportunistic and not Share price ($) ratable year-by-year Incremental investment in business • Evaluated on mid-cycle pricing Op
Slide 27: Disciplined Capital Allocation Priorities
DISCIPLINED CAPITAL ALLOCATION PRIORITIES Balance sheet strength drives increased returns-focused allocation of excess free funds flow <2.0x <1.5x ~1.0x Net debt to (<$10 billion net debt)1 (<$8 billion net debt) 1 (~$6 billion net debt) 1 adjusted EBITDA at US$45 WTI Safe and reliable operations Sa
Slide 28: 2022 Budget
2022 BUDGET Disciplined budget focused on free funds flow and returns 2022 capital budget allocation Corporate Capital expenditures of $50-$70 million $2.6 - $3.0 billion Downstream Total production of $850-$950 million 780,000 - 820,000 BOE/d $2.6-$3.0 Downstream throughput of billion 530,000 - 580
Slide 29: 2022 Budget
2022 BUDGET Positioned for significant excess free funds flow 2022 Budget $ billions 10.0 Expected allocation of $75 Case excess free funds flow ~50% balance sheet ~50% shareholder returns $60 Case 5.0 Base spend ~$280 million Excess ~$450 million Base free funds flow $45 Case $2.6 - $3.0 ARO and di
Slide 30: Sustainability & Environmental, Social and Governance
SUSTAINABILITY & ENVIRONMENTAL, SOCIAL AND GOVERNANCE Rhona DelFrari - CSO & SVP, Stakeholder Engagement
Slide 31: Leadership in Sustainability
LEADERSHIP IN SUSTAINABILITY Balancing environmental, economic and social considerations Culture fosters continuous improvement and focused innovation Track record of reducing emissions intensity and environmental impact PHOTO HERE Strong relationships with local Indigenous and other communities ESG
Slide 32: Ambitious ESG Targets Reinforce Sustainability Leadership
AMBITIOUS ESG TARGETS REINFORCE SUSTAINABILITY LEADERSHIP Strong safety & asset integrity, good governance are foundational Reduce absolute GHG Reduce fresh water Reclaim 3,000 Achieve a minimum of Increase women in emissions by 35% by intensity by 20% in decommissioned well $1.2B of spending with l
Slide 33: Track Record of Reducing GHG Intensity
TRACK RECORD OF REDUCING GHG INTENSITY Cenovus leading continuous improvement across Canadian oil sands Oil sands GHG emissions intensity performance kg CO2e / bbl • Top-tier assets and best-in-class SAGD 120 operating expertise make Cenovus a Mining upgraded Oil sands avg. SAGD Cenovus leader in oi
Slide 34: Reducing Emissions While Adding Production and Throughput
REDUCING EMISSIONS WHILE ADDING PRODUCTION AND THROUGHPUT Plan delivers reductions in absolute emissions to support our long-term targets Total absolute GHG emissions1 Mt CO2e / yr Over the five-year plan 40 • Sustain ~800 MBOE/d of upstream production levels established in 2021 30 • Increase downst
Slide 35: Focused on Absolute Emissions Reductions
FOCUSED ON ABSOLUTE EMISSIONS REDUCTIONS Embedding GHG considerations across our portfolio Illustrative levers to achieve absolute GHG reduction target CLIMATE & GHG EMISSIONS TARGETS Total emissions (Mt CO2e / yr) Reduce absolute GHG emissions by 35% by 35% 2021 - 2026 2027 - 2035 reduction year-en
Slide 36: Decarbonization in Our Business Plan
DECARBONIZATION IN OUR BUSINESS PLAN Applying and advancing technologies to reduce absolute emissions Phase 1 Phase 2 Phase 3 2021 - 2026 2027 - 2035 2036 - 2050 Included in our five-year plan Projects being progressed for 2035 target Technology pathways to net zero Near-term projects Future potenti
Slide 37: Innovation a Key Enabler
INNOVATION A KEY ENABLER Accelerating technology development through external partnerships Focused innovation in the following areas while ensuring impacts to land, water use, air quality and habitat are minimized • Carbon • Cost • Revenue Advancing multiple parallel technologies to enable most effi
Slide 38: Oil Sands Pathways to Net Zero
OIL SANDS PATHWAYS TO NET ZERO A supplier of choice for responsibly produced oil • The Oil Sands Pathways to Net Zero initiative is an alliance of Canada’s six largest oil sands producers, which operate approximately 95% of Canada's oil sands production • Working collectively with the Canadian feder
Slide 39: Indigenous Reconciliation
INDIGENOUS RECONCILIATION Ongoing engagement to support increased opportunities and understanding INDIGENOUS RECONCILIATION TARGETS Achieve a minimum of $1.2B of spend with Indigenous businesses between 2019 and year-end 2025 Attain PAR* gold certification from the CCAB* by year-end 2025 • Spent mor
Slide 40: Operating Portfolio & Business Plan
OPERATING PORTFOLIO & BUSINESS PLAN Jon McKenzie - EVP & COO
Slide 41: Committed to a Strong Safety Culture
COMMITTED TO A STRONG SAFETY CULTURE 41 Prioritizing safety & asset integrity above all else Pro forma safety performance improvements • Track record of continued improvement in recordable injuries and process safety # injuries per 200,000 hours worked Process safety events (#) events 0.7 70 • Cenov
Slide 42: Operations - Strategy Overview
OPERATIONS - STRATEGY OVERVIEW Focused on growing free funds flow and increasing returns Strategic value of each portfolio segment Oil Sands Downstream Conventional Offshore Free cash flow Optimize margins, Platform for free Evaluating strategic fit; engine through reduce risk and cash cash flow, sh
Slide 43: Overview of the Five-Year Business Plan
OVERVIEW OF THE FIVE-YEAR BUSINESS PLAN Strong and growing margins with modest capital investment Upstream production and Illustrative operating margins Total capital expenditures Downstream throughput at US$60 WTI scenario MBOE/d $ billions $ billions 4.0 800 10.0 3.0 8.0 600 6.0 400 2.0 4.0 200 1.
Slide 44: Cost Structure Improves Through Five-Year Plan
COST STRUCTURE IMPROVES THROUGH FIVE-YEAR PLAN Commitment to our low-cost structure key to driving returns on investment Illustrative operating costs across the five-year plan • Upstream and Downstream operating $/BOE & $/bbl $/BOE costs expected to decrease by about 1-2% 13.00 2.00 per year over th
Slide 45: Best-in-Class Oil Sands Assets and Operations
BEST-IN-CLASS OIL SANDS ASSETS AND OPERATIONS Leveraging operating experience and technology for continuous improvement Production and steam-oil-ratio (SOR) versus peers1 Cumulative operating years versus peers2 Mbbls/d SOR Cumulative operating years 600 6.0 8,000 Production SOR 500 5.0 6,000 400 4.
Slide 46: Maximizing Production from Existing Capacity
MAXIMIZING PRODUCTION FROM EXISTING CAPACITY Applying our operating strategies drives stable and reliable performance Christina Lake, Foster Creek and Lloydminster thermals Mbbls/d production over five-year plan 300 Christina Lake Foster Creek Lloydminster thermals 250 200 150 100 50 0 2020 2021F 20
Slide 47: Downstream Overview
DOWNSTREAM OVERVIEW Strategic value - optimizes margins, reduces risk and cash flow volatility U.S. & Canadian Downstream capital U.S. Manufacturing and illustrative operating margin at US$60 WTI scenario • Preference for 100% working interest, operatorship $ billions 1 1 2 2 3 3 4 4 5 5 and option
Slide 48: Optimizing the Heavy Oil Integrated Business
OPTIMIZING THE HEAVY OIL INTEGRATED BUSINESS Driving incremental operating margin over the five-year plan Heavy oil integrated business1 annual operating margin $ billions Oil Sands 9.0 • Debottlenecking and optimization work at ~$8.5B Foster Creek and Christina Lake ~$0.5B • Application of the Ceno
Slide 49: Conventional
CONVENTIONAL Strategic value - offers portfolio diversification and GHG reduction opportunities Conventional segment production • Provides diversified cash flow stream and across the five-year plan MBOE/d offsets exposure to energy costs in the oil 160 sands • Near-term GHG reduction opportunities i
Slide 50: Offshore
OFFSHORE Contributes free funds flow across the plan; low emissions intensity production Atlantic • Exposure to Brent-plus pricing • Providing incremental value through late life asset management PHOTO HERE • De-risking portfolio with changes to working interest, proceeding with Terra Nova asset lif
Slide 51: Terra Nova Asset Life Extension Project
TERRA NOVA ASSET LIFE EXTENSION PROJECT De-risking the Atlantic portfolio with changes to working interest across the region • Increased working interest in the Terra Nova field from 13% to 34%, and approved the asset life extension project with our partners • Production expected to restart before t
Slide 52: Update on White Rose Field and West White Rose Project
UPDATE ON WHITE ROSE FIELD AND WEST WHITE ROSE PROJECT Evaluating incremental value opportunity against decommissioning scenario • Cenovus and partners to make a final decision on West White Rose Project by mid-2022 • Evaluating current project plan and scope, along with other alternatives • Current
Slide 53: Asia Pacific - China
ASIA PACIFIC - CHINA Significant free funds flow contributor, exploring future opportunities to add value China production and potential opportunities • Cenovus operates deep water facilities and across five-year plan wells and CNOOC operates shallow water MBOE/d facilities and onshore gas plant 50
Slide 54: Asia Pacific - Indonesia
ASIA PACIFIC - INDONESIA New production from Indonesia driving additional free funds flow • High return growth projects in Indonesia Indonesia production across five-year plan support diversified natural gas revenue stream MBOE/d at low capital cost 20 • Madura fields add production volumes in 2023
Slide 55: Spotlight on Oil Sands
SPOTLIGHT ON OIL SANDS Norrie Ramsay – EVP, Upstream Thermal, Major Projects & Offshore
Slide 56: Foster Creek Development Improvements
FOSTER CREEK DEVELOPMENT IMPROVEMENTS 56 ~35 years of development remaining at Foster Creek • Future pad development at Foster Creek North and Map of Foster Creek development area West Arm provides significant inventory of high- quality resource to maintain expected production FC Pre-2017 rates and
Slide 57: Christina Lake Development Improvements
CHRISTINA LAKE DEVELOPMENT IMPROVEMENTS ~40 years of development remaining at Christina Lake Map of Christina Lake development area • Five-year plan includes a tie-back to Narrows Lake, expected to bring production over 250 Mbbl/d with no added steam requirements CL Pre-2017 CL 2017+ • Large invento
Slide 58: Redevelopment Program
REDEVELOPMENT PROGRAM High value approach to sustaining production applied across the portfolio Production from redevelopment wells at Foster Creek and Christina Lake Mbbls/d • Drilling new producing wells and using existing 70 steam chamber to extract re-saturated oil 60 Foster Creek • FCCL program
Slide 59: Evolving Our Development Model in the Oil Sands
EVOLVING OUR DEVELOPMENT MODEL IN THE OIL SANDS Reducing costs through extended steam reach and fewer facilities Christina Lake • Accessing high-quality Narrows Lake reservoir with Lloydminster thermals Christina Lake ~17 km steam pipeline development plan Bolney West Narrows Lake tie-back • Narrows
Slide 60: Applying Cenovus Operating Model Drives Cost Savings
APPLYING CENOVUS OPERATING MODEL DRIVES COST SAVINGS Estimated annual capital savings of $40-50 million at Lloydminster thermals Spruce Lake development plan at Lloydminster Accessing the same resource with Cenovus operating model applied with a different development plan • ~45% fewer wells • Double
Slide 61: Adding Value Applying Our Operating Model at Lloydminster
ADDING VALUE APPLYING OUR OPERATING MODEL AT LLOYDMINSTER Highlighting the benefit of our experience and operating strategies $ billions Incremental net asset value1 in Lloydminster thermals ~$0.1B ~$4.2B Subsurface operating improvements ~$0.5B • Production and SOR improvements ~$1.0B • Non-condens
Slide 62: Spotlight on Downstream
SPOTLIGHT ON DOWNSTREAM Keith Chiasson - EVP, Downstream
Slide 63: Manufacturing Safety & Operational Performance
MANUFACTURING SAFETY & OPERATIONAL PERFORMANCE Building upon improving trends of reliability Historical improvement in Manufacturing safety performance # injuries per 200,000 hours worked Process safety events 1.5 40 • Focus on our safety culture with a plan 1.0 towards zero incidents 20 0.5 • Conti
Slide 64: Diversified Marketing Strategy
DIVERSIFIED MARKETING STRATEGY Utilizing storage, pipeline and marketing infrastructure to optimize margins Bruderheim Rail Terminal Heavy oil blend vs. processing and export capacity Edmonton Global / domestic Hub Mbbls/d marketing Oil Sands & Trans Mountain 800 options Conventional x TMX 600 400 R
Slide 65: Increased Margin Contribution from U.S. Refineries
INCREASED MARGIN CONTRIBUTION FROM U.S. REFINERIES Efficient operations generate reliable margin growth across price cycles U.S. Manufacturing operating margin sensitivities • Normalizing demand for refined products to $ billions 2.5 support increased utilization and increased ability to capture mar
Slide 66: "Rewire" Alberta Opportunity
“REWIRE” ALBERTA OPPORTUNITY Potential for additional value through optimization of Lloydminster Complex Potential additional Value potential of Rewire Alberta projects annual gross margin Capital ($ millions) TBD Capital $100+ TBD Lloyd Upgrader optimization and Capital Lloyd Upgrader further debot
Slide 67: Superior Refinery Enhances Integration
SUPERIOR REFINERY ENHANCES INTEGRATION Diversification of refined product slate with increased asphalt production Potential Superior Refinery feedstock and refined product slate • On schedule for full restart by early 2023 Narrows • Project is currently over 70% complete Lake 13% 13% 15% 19% • $200
Slide 68: Opportunities & Closing Remarks on Operations
OPPORTUNITIES & CLOSING REMARKS ON OPERATIONS Jon McKenzie, EVP & COO
Slide 69: Deep Portfolio of Investment Opportunities
DEEP PORTFOLIO OF INVESTMENT OPPORTUNITIES Investing in opportunities that maximize returns over time Illustrative internal rate of return ranges at US$45 WTI to US$75 WTI scenarios IRR Included in five-year capital plan Not included in five-year plan 100% 75% 50% 25% 0% Christina Lake Foster Creek
Slide 70: Plan Delivers Focused and Disciplined Strategy
PLAN DELIVERS FOCUSED AND DISCIPLINED STRATEGY Efficient and stable base business provides platform for future opportunities Disciplined Reducing absolute GHG emissions1 Mt CO2e/yr • Increased upstream production sustained 40 • ~14% growth in downstream throughput Efficient 20 • ~7% growth in operat
Slide 71: Closing Remarks
CLOSING REMARKS Alex Pourbaix - President & CEO
Slide 72: Cenovus Value Proposition
CENOVUS VALUE PROPOSITION Operational Financial ESG Sustainably growing strength discipline leadership shareholder returns Maintaining upstream Free funds flow Targeting GHG Expected shareholder production ~800 CAGR of 3% absolute emissions1 returns over MBOE/d over five years reduction of $2 billio
Slide 73: Appendix
APPENDIX EN ER GY
Slide 74: Snapshot of Feedstocks & Refined Products
SNAPSHOT OF FEEDSTOCKS & REFINED PRODUCTS Refineries provide diversified feedstock and product slate Refinery feedstock (% of throughput) Refined products (% of throughput) 7% 2% 3% 4% 5% 2% 3% 5% 11% 12% 8% 19% 14% 14% 10% 18% 17% 31% 4% 9% 43% 4% 39% 38% 31% 41% 26% 35% 32% 74% 51% 98% 7% 93% 69%
Slide 75: Commodity Price Assumptions: US$45 WTI
COMMODITY PRICE ASSUMPTIONS US$45/bbl WTI scenario US$/bbl unless otherwise stated 2022F 2023F 2024F 2025F 2026F Brent 47.00 47.00 47.00 47.00 47.00 WTI 45.00 45.00 45.00 45.00 45.00 WTI-WCS differential 12.50 12.50 12.50 12.50 12.50 WCS 32.50 32.50 32.50 32.50 32.50 Chicago 3-2-1 crack spread 16.00
Slide 76: Commodity Price Assumptions: US$60 WTI
COMMODITY PRICE ASSUMPTIONS US$60/bbl WTI scenario US$/bbl unless otherwise stated 2022F 2023F 2024F 2025F 2026F Brent 65.00 65.00 65.00 65.00 65.00 WTI 60.00 60.00 60.00 60.00 60.00 WTI-WCS differential 14.50 14.50 14.50 14.50 14.50 WCS 45.50 45.50 45.50 45.50 45.50 Chicago 3-2-1 crack spread 18.50
Slide 77: Commodity Price Assumptions: US$75 WTI
COMMODITY PRICE ASSUMPTIONS US$75/bbl WTI scenario US$/bbl unless otherwise stated 2022F 2023F 2024F 2025F 2026F Brent 81.00 81.00 81.00 81.00 81.00 WTI 75.00 75.00 75.00 75.00 75.00 WTI-WCS differential 18.00 18.00 18.00 18.00 18.00 WCS 57.00 57.00 57.00 57.00 57.00 Chicago 3-2-1 crack spread 22.00
Slide 78: Commodity Price Sensitivities
COMMODITY PRICE SENSITIVITIES Integrated portfolio enhances cash flow stability Price sensitivities on Adjusted Funds Flow ($ million) • Healthy exposure to WTI prices and Chicago 3-2-1 crack spreads Chicago 3-2-1 crack spread (190) 190 +/- US$1.00 change • Integrated model reduces sensitivity to Cr
Slide 79: Carbon Compliance Costs
CARBON COMPLIANCE COSTS Top performing assets mitigate rising carbon tax Illustrative Oil Sands GHG compliance costs ($/BOE) ($/Tonne) • Highest performing SAGD facilities Compliance cost Carbon price compete favourably on GHG intensity $2.00 $200 • Target GHG reductions will further $1.50 $150 redu
Slide 80: Cenovus Oil Sands Land Map
T100 R1W5 R20W4 R15W4 R10W4 R5W4 R1W4 T100 Wabiskaw/ McMurray ! ( SUNRISE T95 T95 Telephone Steepbank Lake ^ Fort McMurray BOREALIS REGION North T90 House Saskatchewan T90 Alberta McMullen CHRISTINA LAKE REGION T85 T85 Narrows Lake Conklin West Kirby ^ !( Christina Lake FOSTER CREEK REGION T80 T80 F
Slide 81: 2022 Corporate Guidance
2022 Corporate guidance ‐ C$, before royalties December 7, 2021 UPSTREAM OIL SANDS Production Capital expenditures Operating costs Effective royalty (Mbbls/d) ($ millions) ($/bbl) rates (%) Christina Lake 230 ‐ 250 Fuel 2.75 ‐ 3.50 23 ‐ 27 Non‐fuel 4.25 ‐ 5.00 Total 7.00 ‐ 8.50 Foster Creek 185 ‐ 20
Slide 82: Oil and Gas Information
Oil and Gas Information Cenovus and Husky employed different methodologies to estimate their reserves information for the year ended December 31, 2020. Cenovus retained two IQREs, McDaniel and GLJ, to evaluate and prepare reports on 100 percent of its proved and probable reserves. All of Husky’s oil
Slide 83: Operating Margin and Netback Definitions
“Operating Margin” is an additional subtotal found in Note 1 of the September 30, 2021 unaudited interim Consolidated Financial Statements and is used to provide a consistent measure of the cash generating performance of our assets for comparability of our underlying financial performance between pe
Slide 84: Forward-Looking Information
risks and uncertainties, some of which are specific to Cenovus and others that apply to the industry generally. The factors or assumptions on which our forward-looking information is based include the following: oil, fuel, natural gas, NGLs, condensate and refined products prices and light-heavy cru