Cenovus Energy Inc. · TSX:CVE
Cenovus Energy — Bank of America Merrill Lynch Global Energy Conference 2012
26 slides from Cenovus Energy's conference presentation, Nov 13, 2012
Slide 1: Bank of America Merrill Lynch Global Energy Conference
Bank of America Merrill Lynch Global Energy Conference Brian Ferguson, President & Chief Executive Officer November 13, 2012 | Miami, FLorida
Slide 2: A different kind of oil sands
A different kind of oil sands Focus on total shareholder return & building net asset value • Top-tier oil sands portfolio generates predictable, reliable growth • Strong project execution & innovation drives performance • Strategic integration & market access enhances cash flow • Solid & conservativ
Slide 3: Delivering on our growth plans
Delivering on our growth plans Measuring our performance since inception • 33% growth in total liquids production • 76% growth in SAGD production • 1% growth in conventional liquids production (including Pelican Lake) • 34% total shareholder return • $1.9 billion in dividends paid • 32% increase in
Slide 4: Executing on our commitments
Executing on our commitments 2012 milestones Grow reserves & contingent resources Q1 Drill 400 to 500 stratigraphic test wells and assess results Connect Bakken central facilities to pipeline to support tight oil production growth in the area (previously Q1) Q2 Demonstrate stable & reliable CORE ope
Slide 5: Identifying our keys to success
Identifying our keys to success • Top quality reservoirs • Manufacturing approach & project execution • Operational excellence • Experienced team • Technological innovations • Stakeholder relationships & environmental track record Cost advantage driven by reservoir quality Steam-to-oil ratio Low SOR
Slide 6: Maintaining leading capital efficiencies
Maintaining leading capital efficiencies Foster Creek Christina Lake $/bbl/d 30,000 20,000 10,000 0 A B C D&E FG&H* A&B CD&E FG&H 20Mbbls/d 10Mbbls/d 30Mbbls/d 60Mbbls/d 125Mbbls/d 18 MMbls/d 120MMbls/d 150MMbls/d Actual costs Projected costs Actual costs Projected costs Capital efficiency is calcul
Slide 7: Consistent & reliable operating performance
Consistent & reliable operating performance Mbbls/d Foster Creek daily production Capacity Turnaround Production is shown on a gross basis. Improving start-up accelerates cash flow Mbbls/d Christina Lake phases A-C & startup of D Capacity Production is shown on a gross basis. 6
Slide 8: Focus on innovation
Focus on innovation Commercializing one technology per year Solvent processes ESP (phase 1) Wedge WellTM t echnology Accelerat ed st art -up Chemical Looping Combust ion Blowdown boiler Conf ident ial project Conf ident ial project Warm Lime Sof t ening Conf ident ial project Conf ident ial project
Slide 9: Our dividend commitment
Refining assets enhance financial performance • Wood River • 306 Mbbls/d crude capacity • 200 - 220 Mbbls/d heavy crude • 85% clean product yield • Borger New coker and associated facilities • 146 Mbbls/d crude capacity • 35 Mbbls/d heavy crude • 89% clean product yield • 2012F operating cash flow*
Slide 10: Cenovus's value pledge
Cenovus’s value pledge Focused on increasing total shareholder return • Deliver on commitments • Build on our strong track record • Double net asset value between 2010 and 2015 • Sustain decades of growth with manufacturing model Christina Lake SAGD project 9
Slide 11: Supplemental information
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Slide 12: Delivering on our commitments
Delivering on our commitments 2011 milestones Added significant reserves & contingent resources Q1 Executed strat well program: 440 wells Sanctioned Foster Creek F, G & H Received results from 2011 strat well & seismic programs Q2 Updated 10-year strategic plan Received regulatory approval for Chris
Slide 13: Advancing oil sands projects
Advancing oil sands projects Expected production capacity Project phase Regulatory status First production target (bbls/d) gross Foster Creek1 A – E 120,000 F Approved2 2014F 45,000 G Approved 2015F 40,000 H Approved 2016F 40,000 J Submit 2013F 2019F 50,000 Future optimization 15,000 Total capacity
Slide 14: Telephone Lake – world class resource
Telephone Lake – world class resource • Reservoir quality, thickness and ALBERTA homogeneity is comparable to Foster Creek and Christina Lake • 2.1 billion bbls of bitumen contingent resources (December 31, 2011) • 95 strat wells drilled Borealis Region (2008-2012) • EIA and joint application submit
Slide 15: Cenovus's Solvent Aided Process (SAP)
Wedge WellTM technology commercialized in 2010 Well producer • Technology details: • < 0.1 average SOR • first year production rate of 600 – 800 bbls/d at Foster Creek, Standard SAGD well pair and current average of 400 bbls/d; steam chambers 300 – 400 bbls/d at Christina Lake coalesce • acceleratio
Slide 16: Telephone Lake – dewatering pilot
Telephone Lake – dewatering pilot • Dewatering involves removing the top water from the reservoir Air injector well Water Water injector well • Dewatering expected to producer well improve project economics, but is not required for Approximate depth 65-110m development • Dewatering benefits 150-175m
Slide 17: Advancing tight oil opportunities
Advancing tight oil opportunities Lower Shaunavon – 42 wells • 54 net sections • 118 producing wells • ~4,550 bbls/d (Q3 2012 average) • ~5 - 10% recovery factor • 20 - 25° API medium oil Bakken – 4 wells • 140+ undeveloped sections (fee & crown land) • 27 producing wells • ~1,700 bbls/d (Q3 2012 av
Slide 18: CORE completion adds significant value
CORE completion adds significant value • Objectives • leverage Wood River’s strategic location • become a major processor of bitumen-blended heavy oil • Value drivers • reduces input costs • increases clean product yield • reduces asphalt production • increases crude throughput • Platform for future
Slide 19: Managing risk through a balanced approach
Managing risk through a balanced approach Heavy oil production integrated with refining capacity Operational Scalable conventional oil programs provide flexibility Portfolio approach to transportation requirements Financial strength to support growth plans Natural gas is a financial asset & provides
Slide 20: Capital investment focused on oil growth
Capital investment focused on oil growth 2012 capital budget: $3.3 - $3.4 B Foster Creek Christina Lake • 92% oil-directed* 21% 17% CVE wide New • ~65% contributes to 6% resource plays growth beyond 2012 Natural gas 11% 2% Refining • ~$2.0 billion or 60% Pelican Lake 4% Conventional 16% is committed
Slide 21: Key credit metrics & ratings
Key credit metrics & ratings Credit metrics Target Q3 2012 Q3 2011 Range Debt to capitalization* 31% 28% 30 – 40% Debt to adjusted EBITDA* 1.1x 1.1x 1.0 – 2.0x Total debt $4,626 $3,617 Credit ratings Long-term Short-term S&P BBB+ Stable A-1 (Low) Moody’s Baa2 Stable P-2 DBRS A (low) Stable R-1 (Low)
Slide 22: Forward-looking information
FORWARD-LOOKING INFORMATION This presentation contains certain forward-looking statements and other information (collectively “forward-looking information”) about our current expectations, estimates and projections, made in light of our experience and perception of historical trends. Forward-looking
Slide 23: 2012 guidance: oil sands and Pelican Lake
October 25, 2012 - C$, before royalties OIL SANDS Q4 2012 2012 Foster Creek Production (Mbbls/d) 60 58 Operating cash flow ($ millions) (1) 285 - 315 965 - 995 Capital expenditures ($ millions) 185 - 205 710 - 730 Operating costs ($/bbl) Fuel 2.55 2.05 Non-fuel 8.85 10.00 11.40 12.05 Effective royal
Slide 24: Consolidated cash flow sensitivities
October 25, 2012 - C$, before royalties CONSOLIDATED Q4 2012 2012 Total cash flow ($ billions) (1) 1.0 - 1.2 3.9 - 4.1 - per common share, diluted ($/share) 1.30 - 1.56 5.18 - 5.44 (1) Operating cash flow ($ billions) 1.2 - 1.4 4.7 - 4.9 (5) Total capital expenditures ($ billions) 0.9 - 1.0 3.3 - 3.
Slide 25: Cenovus land map
T100 R1W5 R20W4 R15W4 R10W4 R5W4 R1W4 T100 Wallace Creek T95 T95 Grosmont Wabiskaw/ McMurray Telephone Lake Axe Lake Steepbank Raven Ridge T90 T90 East McMurray Fort McMurray ^ GREATER PELICAN REGION BOREALIS REGION T85 Saskatchewan Wabiskaw T85 Alberta Grand Rapids Grosmont T80 CHRISTINA LAKE REGIO
Slide 26: Investor relations contacts
INVESTOR RELATIONS CONTACTS Susan Grey Director, Investor Relations susan.grey@cenovus.com 403.766.4751 Graham Ingram Senior Analyst, Investor Relations graham.ingram@cenovus.com 403.766.2849 Bill Stait Senior Analyst, Investor Relations bill.stait@cenovus.com 403.766.6348 76144 | November 2012 | ©
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