CVE.TO - Earnings call transcript Q3 2022

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Operator

Good day, ladies and gentlemen and thank you for standing by. Welcome to Cenovus Energy’s Third Quarter Results.

As a reminder, today’s call is being recorded. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. advised rebroadcast conference of without be be may Cenovus Please or recorded the Instructions] that call this not Energy. [Operator express consent to now would like turn conference I to over the Ms. Vice Wendt, President, Relations. Sherry Investor Ms. ahead, go Please Wendt.

Sherry Wendt

today. quarter terms Thank you, operator, end also advisories assumptions call. non-GAAP welcome They forward everyone of the and referred today’s refer to and at These measures, results describe discussion. looking risk XXXX you the the to Please located factors conference to Cenovus’ relevant and to third gas the news oil outline release. information, and this

you Additional annual take figures brief President And question on these Executive Officer recent are we hold maximum most and follow-up. available stated. please off before information your All Canadian on directly with and AIF of Chief then in with team otherwise those is our and the dollars ask with Relations We in detailed follow-up MD&A to and -- one comments, will one questions. also Pourbaix, Investor provide keep presented XX-F. after questions. Please that will a modeling royalties any please our Cenovus’ and Form unless call. our Alex

other questions. can the for please queue You go ahead. rejoin Alex, any

Alex Pourbaix

good Thanks, everyone. morning, Sherry and

there It two As who Toledo. home September, to the reminder out about our fundamental be that to as This in top our was and a day. morning's I'm and in devastated is refinery heartbreaking a priority, safe our start colleagues. of I workers an do fire responsibility joint absolutely safety. go all going were our hearts industry families venture late must every get their our ensure there tragic this shift every workers our business. call to to which and safety fatalities is with quarter, to start In is non-operated We health learn at

focus twofold. on remains Our refinery the Toledo

from everyone and the forward. our to a every the that partner drone area cause partner into early the joint access safe damage state to continue refinery. will are assess the at the we is the a but site provide the further to as assess way well fire refinery in down and also updates and suggests to continue path ongoing, remain footage can. aerial with localized when staff will operator's venture fully damage to support closely our we'll the the We'll of the Investigations gain we indications site of the has but We as in work of understanding limited better damage, small to shut ability Restricted and a can.

up Turning turnaround and back We Creek now safely financial deferred to its Foster the Lake prices. with the The QX increased oil continue XXXX. way XXX,XXX in turnaround a led and with operating our to quarter, solid Christina third producing over deliver volatility commodity even segment we at results sands QX barrels to from day.

producing day we SAGD see a XXX,XXX a to Lloyd Recall assets nameplate expertise when were that around hit day. barrels barrels XX,XXX by and but Thermals, some daily adding North There Lake produced Thermals, there Spruce issue production closer the lowered early Cenovus' production in September as Lloydminster Bruce well was impacted XX,XXX per combined its took at an Lloyd apply in rates and necessary planned water in thermals run has now well the those August level. with August, tank that up still above barrels In the as maintenance rates is to was day. quarter. in production Lake However, first normal the back we North of continuing that to since over the that oil continues also

in where that we closed deal also Sunrise working the quarter, interest SAGD the the facility. XX% in We acquired remaining

XXX% reporting Sunrise onwards. volumes of August from are We XX

out Conventional October. to We wells the we without Sunrise at conventional between team that cost. recently coming base the brought our rigs well Elm fields production date been and in have production development incident of Worth drilled at just major a site very redevelopment also MDA-MBH a and at has In from our running plant day two per the partners successfully longest performance executed our at breakup. of the program laterals. and to segment, offshore, In coming turnaround seen BOE redrill with was strong the some online X,XXX XXX,XXX Indonesia. to low XXX,XXX meter The reactivating restarted

quarter. the them fourth to up expect ramp We over

to its XX%. XX% fields QX most had volumes turnarounds The doubling Synovus XXXX, at us. coming up we new rate. XX,XXX year BOE to in turnaround was downstream, well In after major Refinery QX throughput with of the Lima run compared a to net per QX will of bring rate behind total US the with utilization operated previous run in in to in XX% utilization as closer Additional continues follow the last day the

non-operated there were and activity the Wood of However, outages River at in turnaround with the quarter Toledo. refineries

level on was our refining offline operations I Toledo. operating Superior the as is shown operations continue capability Lima our XX, improvement addition, and have operatorship we of US back September earlier. taken take significant to and on Toledo the of goal through restart mentioned In incident across to demonstrate refinery following year, the this

one US safe business company's the the greatest of is in term. reliable is Our This opportunities and for establishing a solid near priority of record performance. the refining track

manifested about Sunrise in sands funds pricing closing this in acquisition, included results. The the blended on higher-priced assets, was here, which ways: sale. lag in $XXX network Excess financial nearly the closing realized the by prices volumes $X QX flow funds sale payment $X.X condensate proceeds million our to and net was offset was Turning billion, fully in in flow pricing flow two purchased cash of funds about the months included oil in on and through margin. was a quarter's earlier adjusted billion, fuels retail quarter. free operating sands where on billion. was while about primary $X.X first, recorded The in volatility oil free was commodity And the condensate seen in

crude almost higher an in Second, prices at manufacturing in quarter operating decreased to had $XXX later of down the QX. impact margin, processing million. Throughput and manufactured in cost oil purchased pricing in relative prior US when came periods increase unit

downstream. However, much of margins a in prices the the operating volatility had impact commodity larger on US

losses Refinery, incurring We this gains and segment drag which last. compared in Manufacturing of the QX, US the increased without FIFO the outages with throughput. quarter the also FIFO began performed along with add combined operating inventory Superior to for QX, Toledo the better Taking out expenses startup to expense in the

We price base a our our feedstock a our to our also in above headwind to we've returns the environment, cost and earlier funds a allocated from experienced but in tailwinds half included in of serve shareholder framework, or free and in falling serve as cash In excess rising of quarter, higher-priced like as accordance the QX environment, in price flow volumes is with This in dividend. experienced we've over dynamics shareholder words, on QX. sales periods products condensate just FIFO results other returns. These flow headwinds related impacts. and

shareholders to in through This We quarter. through and NCIB share approach disciplined the also of resulted return continued the our a million about buybacks opportunistic program. to $XXX

early or $X.XX in component, approved current variable common this with our free the program a In will of November. roughly dividend funds $XXX Directors XX% of NCIB about has per Board expire commitment to share of fulfilling flow The going addition, for back excess million, variable shareholders.

As provide we announced earlier, XXX has this Board It approved million to will capacity repurchase approximately year. morning, for shares additional the application common the program. our over NCIB another next

our bringing of billion. of notes exercise company year repurchase a We $X.X interest transaction save total to This completed expense repurchasing about tender about million and refinancing our the will mitigated also until forward. for XXXX. weighted average in going quarter, $X.X rate, also $XXX in It coupon annual risk this the billion reduced debt,

Our year sits And billion with debt. $X.X working capital in now by at net $X.X things perspective, and put this in we quarter release, a net was reduction this started about debt billion. to accelerated

So dividend, deleveraging. to At also that including shareholders returned to framework through delivered and we buybacks down how year QX, and billion as and nearly another shareholder financial example debt of providing the quarters. our at time, QX our of just was billion $X.X base have the $X.X returns is up our our share to net same paying and returns three a will variable this same time, reduction dividend, great in the of while debt shareholders.

more the and Canadian about also governments making oil and arts much sectors shows expected government. for in well, year funding and and to at to the contributions Canada $XX health money GHG are economic country. the our hospitals year. more are XXXX. and businesses, anticipated are investments in for environmental year shows jobs That's and all our royalties significant the billion into back & this of our care, providing $XX culture perspective, for does analysis That's benefits Peters We reduction When in more last on well. of about and does economy this capital investing pays gas that alone, and are a analysis for much contribute in across of put equivalent bolstering To money Company operating Company & and to education, provincial government under Recent two-third further that oil peers than suppliers our this when taxes include sector and billion province. the by you Peters companies in strain revenues Canada's time and contributions gas These our investments add same federal to costs. supporting That sector manufacturers of COVID spend every demand our making Cenovus initiatives. annual and heavy it's this of

$XX as our and require energy efficiency, sector The more will of recently by oil Cenovus net-zero five of than sands projects pipeline services with hubs, to projects. is spender XXXX well cogeneration emissions storage as XXXX, largest to by Alliance's our in and our fact, alone. the jointly Canada. on foundational and decarbonization includes billion Pathways get announced environmental founded capture This carbon investments peers electrification In Alliance,

mechanisms with so on We place. of goal peers decarbonization are to emissions investment to Cenovus that forward and significant in work we projects ready are our policy details, assurance provide continue about all move necessary reductions. these more shared support achieve to the and the decisions officials the government can continue governments advanced once with

two business, decarbonization returns projects are gas in These sector to this strong what to investors. strong and in and will committed investing providing We including oil both things a combined are our us economy and quarter this time where significant way Canadian Recapping country enable to continue for come. headed. at in we're to the to a Cenovus achieved long what and contributing a support we've

delivering and on above build upstream operations to XXX,XXX barrels on a and value continue and towards meaningful returns Our momentum day investment.

year. strip, delivering And when downstream with we to periods strong another Overall, And focus end quarter we're shown Our deleveraging flow has do reach fully of debt at and it excess expect of we're not that, $X this shareholders we've what can going yet Question-and-Answer operational Session solid funds our be our highlighted around the level happy to posted questions. by management's your in that free At to performance level. for floor. net forward will XXXX. environment. and XXX% towards look billion current to this results to substantial take further that We QX that

Operator

[Operator Pardy with RBC Capital Markets. to Instructions] go Greg We'll

Greg Pardy

Alex Good Yeah. Thanks for rundown. the morning. Thanks.

one the downstream a If upstream happening? operational first couple the a about that continue on. questions minute, where talked occurring? favorable maybe to is if focused then so, you that you change rate talk you just guys. of do see Just for a about is of guess And improvements we for you're I

Alex Pourbaix

I bit I'm and But No, the pass Greg, and to talk since of to perspective, Sure. see think, operating continue Keith to grow we've look SORs of the get drive my we run and it, at happy a Husky been on we I some finding able we've would But And costs to production, our deal that drive call brownfield done, opportunity the how I'll to our from at think Jon picked low-hanging had probably opportunities of Norrie really I upstream about it fruit. a good point. down. down, lot what continuing. a I

But on Jon going some significant pass thoughts. going I'll he think Sunrise, give and forward. I Sunrise things you're to it see can to from maybe

Jon McKenzie

Alex. Thanks,

or for goes Alex And money Husky assets for Greg, the six industry this and Cenovus, that also over through into money hanging the harvesting the really acquisition. some commodity put this five a any the mentioned. the hasn't company but So growing lot it or of production one through things of goes of put downturn is little last the fruit done acquired that and that years cycle has we

we your we and but see So with our portfolio, of cost of recalibrate opportunity goes growth look for at incremental cost just re-rate starts production, when base base to that lots not to it. the that kind starts

had So we And potential Alex example, great and mentioned business, that this and a half the happening thing same capital there of lots acquired the Sunrise, similar conventional marginal new for other of well see hasn't we since that's XXXX. a see pad in we our quarter, there. growth

does with So kind to think capital of just we've of we're what North rate with modest time is add of and did kind growth X% us Lake Nova from time. Spruce to you we but what Indonesia I and can production incremental that through that expect requirements, at comes done about what Terra through what relatively is provide similar do in

Greg Pardy

And gears. switch Thanks Okay. that. Terrific. for I'll

a dividends should how we the wherewithal think growth? special dividend clearly, now. go base versus maybe you've to financial raise small so the dividend got special base Because about dividend, And and

Alex Pourbaix

a And companies base to like question. I long-term, top pace can Jon, both the would I think and view And your Jon, you line think add primary value their line. heard Greg, you that that reasonable at say need to continue from our a described do to be do good by that, to of you we there'll grow grow to those one grow kind pretty Cenovus we Yes. as over to bottom ultimately, knitting by opportunity just we also. management's your both I for dividend base the is over ways And would continue that keeping growing But variable dividend. sort dividend. afford time opportunities and be opportunities. I see brownfield certainly base it -- bottom grow perspective, to to commodity can with cycle, the of of my we the think extent it But the see And organic the dividend. we would goal obviously, of the to at it's

Jon McKenzie

that, mean, to on kind add synergistic. the of just Greg. I'll things Maybe I are two

capacity returns in $XX, generate time. the invest just You you and gives dividend grow through which to your at business more

that terms that of to make growth talked incremental Alex which the base the returning you So kind the cash investment core the this through supports that company at dividend about in time, business just in of is of shareholders. of

Greg Pardy

much. very Thanks Understood.

Alex Pourbaix

Thanks, worries. No Yes. Greg.

Operator

Neil Sachs. Thank you. We'll Mehta Goldman take our next question with from

Unidentified Analyst

for this Mehta. Neil for Nicole Thanks is the Hey, [ph] time. on taking Wesser

the on any just kind about So allocation the of variable? capital the a follow-up around then on implications net insight the the side. provide reaching carryforward Can be of announced sort at after debt should X And any billion thinking timing CAD target you curve?

Alex Pourbaix

the moving that there. equal, to billion, is still we thing call we're think billion, intention, around hit we my changes there's hitting I mean X strive it that payout, to XXX% are no being see one if end I notes, our but discipline, in its X -- the once we've that I committed we us all things demonstrate probably mentioned and right And of we the year.

Unidentified Analyst

And follow-up, just next year's you. of on about as if spend should also, about outlook. be you're how Thank any sort updated thinking Great. And back costs? then elevated of curious a maintenance capital the range we thinking

Alex Pourbaix

to that, Jon? want talk you Do about

Jon McKenzie

Yes.

of formal growth, be dollars will month. that some pretty guidance incremental. set, and clear I much it been is marginal we've exactly think world you we've strategy with But been think pretty be clear, a and later where in see on go but set a come we more and will towards pretty budget we'll may incremental that are I next the

different about budget year’s. than year's as being this much don't So next think

to will us we business, some and growth some after think the that of fruit rate monies X% I that maintain that get talked about low-hanging that there conventional. of allows upstream, be to across downstream sort right

So that out I so flesh more the month. we'll think in that next

I forgot question? sorry, your And second of part the

Unidentified Analyst

any capital sort maintenance there? the be update if should there's we range, on That’s thinking of

Jon McKenzie

Yes.

Okay.

you'll keep ex-plants out and that about we in provide number to range. of with required the on more next Sunrise, we Toledo, But sort number once we the On billion, some about stable acquisition our done of that capital, good year, flat then if being We'll even But the the of What that's half over move of thinking five be that's a a production color of We rate course we've of number run remember as moving assets condition. acquired when and kind allowance expect our you Husky, kind CAD keep and forward. the we came X.X to get number maintenance think X.X a acquired, the for anticipated think for that's inflation. have that this safe other you X.X to budget. the in should number years. that, that the of up through I a

Unidentified Analyst

Hey, there. great. clarification Thanks for the

Operator

our TD take We'll Menno Hulshof you. Thank Securities. question next with from

Menno Hulshof

Thanks, morning. everybody and good

Just I'll from pathways. about the on CCS Norway the intense the Canada pressure Netherlands. start release, maybe US, talked facing you In with and

you to the could we And like just the But looks resolution, discussions how on stacks But maybe everybody in are the on of that Europe? ongoing. Or you do that is a track stand of mentioned XXXX the a something us we So think year. up. terms is Canada US. then the see also government before refresh realistic? relative to it end just more that currently And good possible for call of sense I what where has give

Alex Pourbaix

involvement of investment the getting government was in was we that time, industrial and the right forward discussions of many think of investment and credit capital operating out kind are added significant that months. strong now ongoing tax support something perspective, every with CCUS. government And Canada for is that we've it provincial to was Rhona from and with lift. the a gas huge good of for in government federal for US, support the And the jump But And mean, on they're that my carbon the for now, on year government. for oil is I carbon levels world proceeding Inflation a that a pretty this one with Act, the that storage giving government is were major getting many, to that ourselves, – outcomes now the initial And goal including just equivalent and where in through the Reduction viewed It spend I Industry the heavy industrial government. every Earlier both CCUS. to billions costs. massive the doing with in they which look, de-carbonization think – in is we that support fortified jurisdiction color it. question, this US our as going that significant you producers federal it's the de-carbonizing Q No, may but put has but on Yes. many Since not industry, US a I dollars reasonably in give are had of that capture really capture. thoughts really federal that is multiple the industry commitment task. Menno. of and more some I'll much US come

You've Norway the heard talk similar is me about a position. in US,

we're on do anything with economy Canadian there's This our Canadians. don't as government. So have going important competitiveness. part, you But needed our I we know, levels discussions to be that. I for needs think to doing business to on incredibly Canada and focused more are both an if Rhona, part. of and I is the mean, said, I add And

Rhona DelFrari

balancing the on project. world support having they and to this the what these where oil Alex, Yeah. where thing CCS that's with But operating the when now, have and two-thirds has experienced look of right to anywhere companies first the because that That's with These the most do from it proven that's costs what construction not to said, sands Recovery. about, partner that the result These be recovery, you at of think we’re because significantly are talking CCS This that's And operating sense without for examples have projects, projects projects a to with seen to have government. But And the there's joint been our projects at that it's is a boom across be significant you There's want looking of getting with them. we're that full government. thousands capital Oil to capital that infrastructure the Enhanced focus that technology. everywhere, focus both oil in cost infrastructure are enhanced CCS is real we've the CCS to it's but is of partnered multi-decade from talked the the the tens that's in the projects And is up to to are jobs of so will the large anywhere And go goods. forward. in to close in next linked over around I governments gone importance is CCS life truly, that cost. Alberta. great. right we makes the because the world, part going Canadian about, the also then now, ahead you

levels benefit ahead. many going of are so to these projects there So

Alex Pourbaix

of needed. to Rhona. about we Year. My last to of kind responsive a be thanks, guess this Menno, question is discussion the complexity into it just – deliver ongoing and this – with the Just I right, New is, And just issue this government. that, and And to last on of would the suspect ultimately lot one just is sure, there's extend that given make is timing. done will need your what

Menno Hulshof

very what for Where the first you for do at targeting XXXX? see flip in utilization process, going the of the And over modeling rebuild to superior still if you're just you I'm restart. to both. to project Thanks the ramp-up all? half helpful. we Okay. That's should risk QX be

Keith Chiasson

the progress always actually QX commissioning. We've first the on Superior happy We're process through on Keith we're into brought and filled of the that up from inventory. forecasting Chiasson. of transitioning at track. it's the ramping and floated Hey, crude those been the in Yeah, with roofs our construction into we're have our XXXX, still set really up project. and We of tanks tanks Menno,

and imminently that we're unit to ready up. crude start So getting commission the

still ramp so up the to saying track we've QX, on And as past through XXXX, really been for quarters. several

Menno Hulshof

Thank you, Keith.

Operator

you. Thank John to JPMorgan. go We'll Instructions] [Operator Royall next with

John Royall

Hey, question. good guys. my morning, Thanks taking for

So you FIFO talk impacts. were on downstream, seeing I downtime and heard about I if on less the throughputs XQ mentioned XQ cost inventory the XQ? had that you're margin the in know right, than or drivers results better this improved into And the you think out I overall, anything when you and you there? better strip side but Can

Keith Chiasson

Yes. our strong really actually Lima at in Hi, Lima. as Keith the a at We Obviously, supportive throughput throughput record We a in it's quarter Chiasson. the cracks saw quarter Refinery. well. are set John, very the

really as right what at we're at because still the about looks we incurring operated the were that the of any of view with of at without excited we're like, think kind cost assets. know, And about venture down of for Superior. most Toledo, this forward now, you we As lot set throughput assets, joint tragic quarter fire a

at. US what can come structure even on assets more perform stream, those as about the So encouraged we're

Toledo Lima. As where you WRB our joint know, venture to well as refineries of, both kind they WCS Superior, are well consume are, as heavy, these at set with differentials, Canadian up

very heading crack. into kind the well as So, of constructive as this, constructive really

So assets pretty and the exciting come manufacturing, stream continue to those back on for time perform. US as

John Royall

just up Great. XQ, and it When higher of in looks rate flipping XQ Christina I'm price assuming Thank despite to Foster, would look versus to upstream. XQ driving my Anything three the those versus you doing helpful. XQ? rates you. in like that's Sunrise, right. And in at all That's point then, royalties down, went I calculation for going terms

Jeffrey Hart

there's nothing and It's structural. I'll payout. here. are No, the those just Creek post it's Lake Christina -- remind Foster Jeff -- framework. of you No,

XX% from a XX% to of So they'll on payout there. range

XX%, nothing pay, your And So They've post in. structural. and annual just cost, an op less running factored we're calculation. been basically, your revenue there's in around when a your less in It's CapEx. but it's

just pieces, you about always different there's true-ups So be should that's it. and but thinking how

John Royall

you. Thank Understood.

Alex Pourbaix

Thanks, John.

Operator

with Market. our question from Fong We'll take CIBC next Dennis World

Dennis Fong

and thanks my for Hi. Good morning taking questions.

in The first just mid-cycle the curious, one to Has recently maybe repurchase you focusing was update shares? from would really is just And previously, on how to macro most about we've general. program. at just like value around I given driven share seen pricing. discussed what and on "mid-cycle" for that is know, guys what me your repurchasing I intrinsic you revise think or view you

Alex Pourbaix

of Once it's again, of we of kind how been years. the is to go mid-cycle kind back mean, think disciplined about around where of or in not over to I We point, just think $XX conservative WTI. the world back remaining as last and go this things. XX And I concept about still I think this to at I'm not that convinced going

billion, when as until perspective, we I'd to think everybody we're commodity And kind value. really like prices. trending trading we we're buybacks, we share below it. below dividends And buybacks. how like dividends. and looking that after, conversely, think about we price is $XX. share expect hit $X the XX should variable all with our think that should being directionally is share over stick price, $XX, So I even of people expect price really think that if a of $X as intrinsic lot That's remind people mid-cycle representative They it And things going share variable hit of prefer like about if do billion equal about from

Dennis Fong

the progress maybe made both here pretty you've my existing assets, good Cenovus sailing just Greg's on And follow-up Great. Great. question I is Husky. of Thanks. some and optimization know your earlier. historical on of

not the Just can like from to the upstream down us to you Thanks. a stem say, could where potentially leg that of whether the optimization Exxon line further curious as of an projects update where next Lake, ride? Christina connecting in provide on or or like, bit at happens be

Norrie Ramsay

Christina at like down Norrie Yes. Christina Ramsay Lake are pipeline up the years, up Lake. Hi, over next Dennis, the -- to here. connect we'll Narrows connects that its we progressing three Yeah,

you production north of pads that a Sunrise, XXXX. So and expect haven't drilled since lot flexibility, that see earlier, John Similarly, kind area now there mentioned to should we're of there. come from in been there we owner, have a XXX%

the really lot up. there. on same good in pads we're at of kind I progress next of over months And readout we're a the three So XX expect time, regional well show to doing the of lots Sunrise. making those areas next in

years. for of a haven't number So it we done

that the side year, area in think, So I which if don't I we're from life an back have of have the Terra the at to know, I extension, a barrels it, another have Drew's mean, XX,XXX mean, Indonesia, of end you that want Nova asset we looking Drew, forward it. -- -- we we mention coming have And to other Atlantic to over I day. a

Andrew Dahlin

Yeah, sure. Yeah.

So unit coming flotation year. MAC Dennis, will into we've the next We've got same field on that just now. that's production come midyear project MDA-MBH got here the that

investments see So low Indonesia very double, was of those production capital as the FPU for going to you're types leased.

an fill assets so more as don't where into of surprised the of driving conventional we the of use growth to add you lot earlier next performance of or even if next that of keep efficient So to that kind utilize it capital be like little good, around where we've and probably know the here year we makes brownfield, growth, a flow cash free point that got And to John's just our us invested sense while, years. million improves small in capital your infrastructure not very see have basically ability for continued lots these five, netbacks business, CADXXX world, incremental your generate your opportunities just of OpEx but underlying really and good then future affordability last across the keep with underlying so aspect our has improve keep that that business. of got to to the six not is upstream. every we've efficiencies and No, in is of about really lots only it's just been unit those

Dennis Fong

back. I'll it Great. Great. turn Thanks.

Alex Pourbaix

Dennis. Thanks

Operator

with Varcoe take Calgary you. the the our conclude Herald Thank portion Instructions] from first question will That portion. Chris [Operator analyst We'll Q&A of

Chris Varcoe

from start Canadian his Alex, seen clean Federal Guilbeault, share money a Environment do of Minister are This for down Meanwhile production for of oil Hi. industry past energy the sector? tax question call United buybacks, kind instead and industry a potentially the is the don't hinting on out more in criticism the seen Biden words. out if week, President Alex. in they we've those so, do these spending to how the and comments the call more States, windfall of view we've the you

Alex Pourbaix

gas that already my comments Canadian talked about I where think, you've and Chris, is probably making. heard the I opening oil industry contribution the

levels As the going taxes remarks, government I in -- that initial all in Canadian Company said contribute in are & in Peters upstream billion we and Canada. of royalties those estimates CADXX to industry is

So, which up. bit system progressive I think contribution a -- in the have different in we is have industry the very Canada, as a quite the cash up, very government goes US, where a coffers we goes than the to flow

fundamentally -- just our government's decarbonization. a is is net XXXX. I country Canadian our the industry reductions So, contributing to emission think industry any make characterization that I not the effort serious being shown federal for inaccurate. zero said, we're the on support by to We That about very has path think that significant

Cenovus and realistic same Canada, getting to requires that But our in to at peers. a goal global reduction security. order practical have and in I Alliance investment Pathways really protect provide help jobs, think there energy approach with and We emissions

look you. just to -- would at have -- I I'll I it back So, I things. those think Yes turn just you

Chris Varcoe

Sure.

this on federal investment Just what credit you release tax are to their are as government their that relates or think, then. The What fiscal to it to -- Ottawa later hoping on you follow-up CCUS? expected fall see expecting from I to week. update, is

Alex Pourbaix

consultation Chris, has the that very still that Inflation their phase expecting at done anything the is US coming acknowledge that's that shattering tomorrow. with to out going in discussion the much here we with the and of earth statement with a that are in having have of Act US program fall government I'm not to government Reduction moves the Canada look program. that the is something -- federal terms But in competitive

Chris Varcoe

light government stalemate green ask front. right Is need federal and And a the provincial question see to, there to that are the now? the the government Group to we relates just changes I projects? -- for one Do at it last you to from give Pathways as to you those guess, it

Alex Pourbaix

don't stalemate No, at all. I a think at we're

and productive I I quite having think, as -- has think I you've this absolutely mean, it's We we're said, said, we as in with going I I US. some government of discussions. We've made are the are issue, understand, example, required, all talk industry. that the about, heard what And same that certainty or These need I ultimately reasonable, I so the But reduction projects that I and path be I everybody a decisions to -- there's of we I on a a say everybody productively. that for province. ultimately the path. of on certainty federal those going we're very the federal are the is need I to path are And shares permits me the of committed down important of on more are moving in industry equivalence time, decarbonization. down for just we the path works is are require at contribution a proceed the to I order absolute till the various it's I'll project for having think I a Pathways, In both that that, have give execute that government the have programs. mean think we our I but and referring see going that example CCUS We in the we think joint to have those the say when be this well. -- think coming goal an to you a out federal government, to been in resolution environmental on we be provincial provincial need actually think to not emissions we governments not to if and I'm understand far, would issues. going a path foundational for industry, would space. position pore have pore just space. discussions certainty of terms before for We're And

Chris Varcoe

you. Thank

Alex Pourbaix

Chris. Thanks,

Operator

We'll Rod with Nickel next Reuters. from take our question

Rod Nickel

Alex. Hi,

the on price view several why taking a at road? Can a that would keeping Just wondering least. for Street your the you as doesn't -- to if you're seem price, expect down price years futures that can like mid-cycle prices cautious indicate explain $XX of a you elaborate maybe more strip bit

Alex Pourbaix

to four ago, $XX. strip Rod, expecting years forward over price the wasn't

look is sure well I financial about discipline if So speculating beyond the recently, deliver at -- market what investment XX discipline, it discipline, is this is is has and company one delivering that But promised price s on for anything you if interesting barrel. a going. And years, but safety have price what company, that is you been where there's the and the focused I $XX if other to average past the I'm we than thing on over it me the to at it back, its look run numbers stakeholders. below haven't futures

So, can but $XX of best, right got for still reality. sort think we company do our to time hope a price. it at to is we I at about for mid-market think a plan point, for And this the a the thing this

Rod Nickel

sort budget the in that XX capital reason very cautious that modest you're next you increase, next go to year where of the would at prices your that's a assume I a just be approach if looking anything, might keeping similar to months? And

Alex Pourbaix

a we're price when of at a we're cost $XX on those return capital or of look bottom their price you And and more disciplined our a all investments call Well, major have little hurdle projects opportunity to news the I so are what deal with decisions. the if talk that's deck, investment a would probably, you And of would even blessed tell invest resiliency WTI. heard Norrie we decisions, Jon cycle more great we to grow to at resilient anything, investment about continued commodity this good that returns we of prices. production on call, those is, and we are high continuing is the have have been that that all and that and at a lowest that everything in, of meets

Rod Nickel

Thanks, Alex.

Alex Pourbaix

Rod. Thanks,

Operator

Robert our News. We'll Bloomberg question from take next Tuttle with

Robert Tuttle

I'm morning. do level? barrel mean, this And been been the spaces, of kind in more mean, time at more differentials, $XX the we good than differential normal would heavy of yet, it's near little Hi, the got a here very weak normal a summer. bring factors for or there's Canadian continuing? price through the oil, you you now. more price this down And to we are the down $XX what Do pipeline see very apportionment. a see long all I -- wondering to least I a pipelines

Alex Pourbaix

markets, heavy America. at I globally, I planned refineries maintenance final a of a North would point in the in and input And volumes were are X be of I'll a what to prices think out top both in those just actually differentials government thoughts pipeline creating out just to lot and of unplanned I and has being couple sours, more coming significant everybody of some would have heavy. light-heavy the wide those historical you of happy being petroleum give wide out I I now, that obviously kind -- is bringing -- guess constraints two-thirds I view of by aware and you Asia lot global kind this medium, in significantly some temporary those putting the our reserve. by of on from those crudes heavy globally, both But that's Yes. I that, coming been US first driven strategic is the million to of processing the those driven experience. so natural my of right market. on in on think, Alberta. previous processing petroleum spiking observation be really do that about are No, driven of day gas barrels strategic think that, And the of number kind the by relatively would limited Robert. a say thoughts you differentials due know would right issues, give in of heavy high Europe, to supply a is is tune gas SPR where that being the the than I'm of is refining, are which mean, thing But but different years these imbalance On then the grade now savor are capacity the cost that focus of a heavy in majority, And reserve. of more Alberta, a different pressure. And

persist -- this a is I it temporary to resolved? is gets as ultimately, ultimately would is something I XXXX. those that this think But issue resolved get that a it don't could I think resolved. I issues think referred into I So view as

Robert Tuttle

Okay. Great.

Just one more thing.

mean are projects. and planned, guys the that How to labor resources. all evolve all I major construction going these You time. they're stuff projects something at the very… same of that of looks like billion be to built these XX mean this going when everything manage time, all you or investment have CCUS going at in I happen, a same it how being have to is you with

Alex Pourbaix

mad advice also only reasons we have the issues the the – if everybody very give is think that gate it on to reduce the procurement in And cost and emissions you craft other too of frankly, significantly good one overheated question. projects, I a mean issues And government XX managing has trades see of sector. issues. was you, industry a environments. also Yes. on Yes. the you the labor move delays. construction may capital the that. over to could and of would And it's out if we one to one upstream that them projects project be one thing of learned think amount but Robert, of exacerbate and quick But vary both finite this other would much rush escalation, CCUS coming the lot you and There's past there other I constructing of I is a projects ambitions to a why years tell of understands

of mean, this historically. I aware very challenge are we think I acutely So

-- pathways project foundational gives that CCUS to a the and which about in in I forum, make think capture But key Lake we the the for is us that a is coming and reasonable together we actually the hopefully, work it gives decarbonize. partners coordination, that. have Cold ability timeline do some can things the great minimize area, us to example, we on the on one it of where together, sure

Robert Tuttle

Thank you.

Alex Pourbaix

Yes. No worries. Thanks, Robert.

Operator

closing As it End further of conference comments. like Mr. the over I'd back appears, Q&A questions. there turn are to Pourbaix no for to

Alex Pourbaix

-- today the to as our do, in talk interest investment listen about continued the I and to think plan. company their I community the time quarter us your I for shareholders Well, just and our and always thank would

So with we'll and I morning, good a everybody wish sign-off. that,

Operator

Once again, does for participation. conclude your that conference. today's you We thank

You may disconnect. now

Cenovus Energy (CVE) 2 Nov 222022 Q3 Earnings call transcript