Cenovus Energy 2021 budget to achieve nearly $1 billion of synergies in first year

Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) has delivered a disciplined 2021 capital budget focused on maintaining safe and reliable operations while positioning the company to drive enhanced shareholder value. The budget includes sustaining capital of approximately $2.1 billion to deliver upstream production of approximately 755,000 barrels of oil equivalent per day (BOE/d) and downstream throughput of approximately 525,000 barrels per day (bbls/d).

The budget anticipates Cenovus achieving nearly $1 billion of synergies in 2021 as a result of its recent transaction with Husky Energy, putting the company firmly on track to reach its planned $1.2 billion in annual run-rate synergies by the end of 2021. The budget also includes $520 million to $570 million for the Superior Refinery rebuild, with a substantial portion of the go-forward costs expected to be recovered through insurance proceeds.

“With this budget we’re delivering on the commitments we made when we announced the Husky transaction,” said Alex Pourbaix, Cenovus President & Chief Executive Officer. “In 2021 we’ll remain focused on disciplined capital allocation, investing selectively in the highest return opportunities available in our expanded asset portfolio, and we expect to make significant progress towards achieving our synergy targets.”

2021 budget highlights

• Total upstream production of 730,000 BOE/d to 780,000 BOE/d
• Total downstream throughput of 500,000 bbls/d to 550,000 bbls/d
• Total capital expenditures of $2.3 billion to $2.7 billion, including
  • Sustaining capital of approximately $2.1 billion, compared to the $2.4 billion annual average estimated at transaction announcement
  • Superior Refinery rebuild costs of $520 million to $570 million (excluding insurance proceeds)

This news cements Superior Refinery’s role as a major employer of choice and a partner to many community organizations, programs, and charities which benefit our city. Last year, Superior Refinery and Husky spent more than $300,000+ on such outreach and programs including $110,000 to Head of the Lakes United Way with most employees directing their contributions to programs in Superior and Douglas County, donations to local shelters, the Northwest Wisconsin COVID-19 relief fund and sponsorship of the 2021 Lake Superior Ice Festival.
 
In 2021, with the transition into Cenovus Energy, we look to continue citizenship programs in our respective communities, such as Superior, and will engage in more impactful, local spending.