Profile: Cenovus Energy Inc (CVE)
2 Jul 2015
Cenovus Energy Inc. (Cenovus), incorporated on January 1, 2011, is a 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 refining operations in the United States. The Company operates in four segments: Oil Sands, Conventional, Refining and Marketing, and Corporate and Eliminations. Cenovus is focused on development of its two producing steam assisted gravity drainage (SAGD) projects: Foster Creek and Christina Lake. Foster Creek and Christina Lake have a combined production capacity of 288,000 gross barrels per day.
The Company’s Oil Sands segment includes Cenovus’s bitumen assets at Foster Creek, Christina Lake and Narrows Lake, as well as projects in the early stages of development, such as Grand Rapids and Telephone Lake. The Company’s Athabasca natural gas assets also form part of this segment. Foster Creek, Christina Lake and Narrows Lake are jointly owned through FCCL Partnership (FCCL) with ConocoPhillips. Cenovus FCCL Ltd., Cenovus’s wholly owned subsidiary, is the operator and managing partner of FCCL, and holds 50% of FCCL. As of December 31, 2014, Cenovus held bitumen rights of approximately 1.5 million gross acres (1.1 million net acres) within the Athabasca and Cold Lake areas, as well as the exclusive rights to lease an additional 478,000 net acres on Cenovus’s behalf and its assignee’s behalf on Cold Lake Air Weapons Range.
Cenovus has a 50% working interest in Foster Creek, Cenovus’s commercial steam assisted gravity drainage (SAGD) operation. It is located on the Cold Lake Air Weapons Range. Foster Creek produces from the McMurray formation using SAGD technology. Cenovus operates an 80 megawatt natural gas-fired cogeneration facility in conjunction with the SAGD operation at Foster Creek.
Cenovus has a 50% working interest in Christina Lake, which is located approximately 120 kilometers south of Fort McMurray. Christina Lake uses SAGD technology and produces from the McMurray formation. The production from phases A through E at Christina Lake averaged 69,023 barrels per day in 2014. In 2014, Cenovus drilled 24 gross wells at Christina Lake using the Company’s Wedge WellTM technology and, as at December 31, 2014, there were 19 gross wells of this type producing.
Cenovus has a 50% working interest in Narrows Lake, which is located adjacent to Christina Lake. Cenovus’s 100%-owned Telephone Lake property is located in the Borealis Region in northeastern Alberta. Cenovus’s 100% owned Grand Rapids property is located in the Greater Pelican Region. The project is adjacent to the Company’s Pelican Lake heavy oil operations and existing facilities.
The Company’s Conventional segment operations include the development and production from conventional crude oil, NGLs and natural gas assets in Alberta and Saskatchewan, including the heavy oil assets at Pelican Lake. This segment also includes the CO2 oil recovery project at Weyburn, and emerging tight oil assets in Alberta. Cenovus owns the mineral rights on approximately 70% of the Company’s conventional lands (fee lands) of which 2.5 million acres are developed. In 2014, Cenovus had approximately 7,600 barrels of oil equivalent per day of royalty interest production from fee lands.
Cenovus’s conventional crude oil assets are located in Alberta and Saskatchewan. Cenovus holds interests in the Suffield, Grassland and Langevin areas in Alberta with a mix of medium and heavy crude oil production. Cenovus uses EOR techniques for the Company’s oil assets, including water flooding, CO2 miscible flooding and alkali surfactant polymer flooding. Cenovus operates the CO2 miscible flood project. Cenovus produces heavy crude oil from the Cretaceous Wabiskaw formation at its Pelican Lake property, within the Greater Pelican Region in northeastern Alberta. Cenovus holds a 38% non-operated interest in a 110 kilometers, 20-inch diameter crude oil pipeline, which connects the Pelican Lake area to major pipelines that transport crude oil from northern Alberta to crude oil markets. Suffield is the Company’s crude oil and natural gas production in Alberta. The Suffield area is made up of the Suffield Block. In 2014, Conventional gas production averaged 466 million cubic feet (MMcf) per day.
Refining and Marketing
The Company’s Refining and Marketing segment includes refining crude oil into petroleum and chemical products. Through WRB Refining LP (WRB), Cenovus has a 50% ownership interest in both the Wood River and Borger Refineries located in Roxana, Illinois and Borger, Texas respectively. The Wood River Refinery is a supplier of jet fuel to Lambert International Airport in St. Louis and O’Hare International Airport in Chicago. The Wood River Refinery processes light low-sulphur and heavy high-sulphur 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 Borger Refinery processes mainly medium and heavy high-sulphur 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 crude oil processing capacity for 2014 was 146,000 gross barrels per day, including 35,000 gross barrels per day of heavy crude oil. The Borger Refinery also has an NGL fractionation facility with a capacity of 45,000 gross barrels per day.
Cenovus’s Marketing group is focused on the netback price of the Company’s production. As part of these activities, the group carries out third-party purchases and sales of crude oil and natural gas to provide transportation commitments, delivery points and customer diversification. Cenovus’s Crude Oil marketing group manages the marketing of crude oil for the Company’s upstream operations. Cenovus also manages the marketing of its natural gas, which is primarily sold to industrials, other producers and energy marketing companies.
Cenovus Energy Inc
2600, 500 Centre Street SE
CALGARY AB T2G 1A6
Company Web Links
- Cenovus to sell royalty portfolio to Ontario Teachers' for $2.66 billion
- UPDATE 2-Cenovus to sell royalty portfolio to Ontario Teachers' for C$3.3 bln
- Cenovus to sell royalty business to Ontario Teachers'
- Cenovus confirms it is in talks to sell royalty lands
- EXCLUSIVE-Cenovus in exclusive talks with Teachers' fund on land assets -sources