Cenovus Energy profit misses on lower refining margins, output

FILE PHOTO: A worker holds a cup of heavy oil before it is shipped to the market at the Cenovus Energy Christina Lake Steam-Assisted Gravity Drainage (SAGD) project 120 km (74 miles) south of Fort McMurray, Alberta, August 15, 2013. REUTERS/Todd Korol

(Reuters) - Oil and gas producer Cenovus Energy on Thursday missed quarterly profit estimates as the production cuts ordered by Alberta’s provincial government in Canada hit output and higher Canadian crude prices hurt refining margins.

Total production fell 14.5% to 443,318 barrels of oil equivalent per day in the quarter, also due to a planned turnaround at its Christina Lake oil-sands project.

Refining and marketing operating margin fell 45% to C$198 million, mainly due to higher Canadian crude prices from the production cuts as well as higher operating costs and unplanned maintenance at its refineries.

Net earnings from continuing operations was C$1.78 billion ($1.36 billion), or C$1.45 per share, in the second quarter ended June 30, compared with a loss of C$410 million, or 33 Canadian cents per share, a year earlier. []

The company also benefited from a one-time tax gain of $658 million in the quarter.

Excluding items, it earned 22 Canadian cents per share, well below analysts’ estimates of 34 Canadian cents per share, according to Refinitiv IBES.

(Corrects to ‘Thursday’ in paragraph 1)

Reporting by Taru Jain and Shradha Singh in Bengaluru; Editing by Arun Koyyur