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Profile: Cenovus Energy Inc (CVE)

CVE on New York Consolidated

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25 Jul 2016
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Cenovus Energy Inc. (Cenovus), incorporated on January 1, 2011, is an integrated oil company. The Company is engaged in the business of developing, producing and marketing crude oil, natural gas liquids (NGLs) and natural gas in Canada with marketing activities and refining operations in the United States. The Company's segments include Oil Sands, Conventional, Refining and Marketing, and Corporate and Eliminations. All of Cenovus's oil and natural gas reserves and production are located in Canada, within the provinces of Alberta and Saskatchewan. It has a land base of approximately 5.6 million net acres. The Company's operations include steam-assisted gravity drainage (SAGD) oil sands projects in northern Alberta, which include Foster Creek, Christina Lake and Narrows Lake.

Oil Sands

The Company's Oil Sands segment includes the development and production of bitumen and natural gas in northeast Alberta. Cenovus's bitumen assets include Foster Creek, Christina Lake and Narrows Lake, as well as projects in the early stages of development, such as Grand Rapids and Telephone Lake. Cenovus holds bitumen rights of approximately 1.8 million gross acres (over 1.5 million net acres) within the Athabasca and Cold Lake areas, as well as the exclusive rights to lease an additional approximately 478,000 net acres on Cenovus's behalf and/or its assignee's behalf on the Cold Lake Air Weapons Range.

The Foster Creek is located on the Cold Lake Air Weapons Range, an active military base, and has a reservoir depth of approximately 500 meters below the surface. Foster Creek produces from the McMurray formation using SAGD technology. Cenovus operates an approximately 80 megawatt natural gas-fired cogeneration facility in conjunction with the SAGD operation at Foster Creek. The steam and power generated by the facility is being used within the SAGD operation. Christina Lake is located approximately 120 kilometers south of Fort McMurray and has a reservoir depth of over 350 meters below the surface. Christina Lake produces from the McMurray formation using SAGD technology. Narrows Lake is located adjacent to Christina Lake and has a reservoir depth of approximately 370 meters below the surface.

Cenovus's Telephone Lake property is located in the Borealis Region in northeastern Alberta, approximately 90 kilometers northeast of Fort McMurray. The Grand Rapids property is located in the Greater Pelican Region, over 300 kilometers north of Edmonton, Alberta. The project is adjacent to the Company's Pelican Lake heavy oil operations and existing facilities. Cenovus produces natural gas from the Cold Lake Air Weapons Range and various surrounding landholdings located in northeastern Alberta. It holds surface access and natural gas rights for exploration, development and transportation from areas within the Cold Lake Air Weapons Range. The Company also has various other assets, including the Steepbank and East McMurray properties located in the Borealis Region in Alberta.

Conventional

The Company's Conventional segment includes the development and production of conventional crude oil, NGLs and natural gas in Alberta and Saskatchewan, including the heavy oil assets at Pelican Lake, the carbon dioxide (CO2) enhanced oil recovery (EOR) project at Weyburn and tight oil opportunities. Cenovus's conventional crude oil assets are located in Alberta and Saskatchewan. It holds interests in various zones in the Suffield, Grassland and Langevin areas in Alberta with a mix of medium and heavy crude oil production. Cenovus operates CO2 miscible flood projects. The Weyburn unit produces medium sour crude oil and covers approximately 50,000 acres of land in southeastern Saskatchewan.

Cenovus owns the mineral rights on approximately 70% of the Company's conventional lands (fee lands), of which approximately 2.5 million acres are developed. Cenovus has approximately 7,400 barrels of oil equivalent per day of royalty interest production from fee lands. The CO2 is delivered by pipeline directly to the Weyburn facility from a coal gasification project in North Dakota, and from the Boundary Dam Power Station in southeast Saskatchewan.

Using a patterned, horizontal well polymer flood and waterflood, Cenovus produces heavy crude oil from the Wabiskaw formation at its Pelican Lake property. The Pelican Lake property is located within the Greater Pelican Region in northeastern Alberta. Cenovus holds a non-operated interest in an approximately 110 kilometer, over 20 inch diameter crude oil pipeline, which connects the Pelican Lake area to pipelines that transport crude oil from northern Alberta to crude oil markets. Cenovus holds natural gas interests in various zones in the Suffield, Grassland and Langevin areas in Alberta. Development in these areas focuses on recompletions and optimization of existing wells. Its conventional natural gas production average is over 422 million cubic feet (MMcf) per day.

Refining and Marketing

The Company's Refining and Marketing segment includes transporting, selling and refining crude oil into petroleum and chemical products. Cenovus jointly owns approximately two refineries in the United States. In addition, Cenovus owns and operates a crude-by-rail terminal in Alberta. The Refining and Marketing segment coordinates Cenovus's marketing and transportation initiatives to manage product mix, delivery points, transportation commitments and customer diversification. The Company's refining operations allow it to capture the value from crude oil production through to refined products, such as diesel, gasoline and jet fuel, to partially mitigate volatility associated with regional North American crude oil differential fluctuations. Through WRB Refining LP (WRB), Cenovus has an ownership interest in both the Wood River and Borger refineries located in Roxana, Illinois and Borger, Texas respectively. The Company's refineries have a combined stated processing capacity of approximately 460,000 gross barrels per day of crude oil, including heavy crude oil processing capability of approximately 255,000 gross barrels per day. In addition, the Borger Refinery has an NGL fractionation facility with a capacity of over 45,000 gross barrels per day.

The Wood River Refinery is located in Roxana, Illinois, approximately 20 kilometers northeast of St. Louis, Missouri. The Wood River Refinery processes light low-sulfur and heavy high-sulfur crude oil that it receives from North American crude oil pipelines to produce gasoline, diesel and jet fuel, petrochemical feedstock, as well as coke and asphalt. The Wood River Refinery's stated crude oil processing capacity is over 314,000 gross barrels per day. The Borger Refinery is located in Borger, Texas, approximately 80 kilometers north of Amarillo, Texas. The Borger Refinery processes medium and heavy high-sulfur crude oil, and NGLs that it receives from North American pipeline systems to produce gasoline, diesel and jet fuel along with NGLs and solvents. The Borger Refinery's stated oil processing capacity is approximately 146,000 gross barrels per day, including over 35,000 gross barrels per day of heavy crude oil. The Borger Refinery also has an NGL fractionation facility with stated capacity of approximately 45,000 gross barrels per day.

Cenovus's marketing activities are focused on managing the netback price of the Company's production, including third-party purchases and sales of crude oil and natural gas. Its crude oil marketing activities are focused on sale of production and management of condensate supply, inventory and storage. Cenovus also manages the marketing of its natural gas, which is primarily sold to industrials, other producers and energy marketing companies.

Company Address

Cenovus Energy Inc

2600-500 Centre St SE
CALGARY   AB   T2G 1A6
P: +1403.7662000
F: +1403.7667600

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