Cenovus Energy outlines capex, production guidance for 2021

Cenovus Energy Inc. projected its total 2021 capital expenditures to be in the range of C$2.30 billion to C$2.70 billion. The Canadian producer also said it expects to achieve almost C$1 billion of synergies in 2021 as a result of its recently completed all-stock merger deal with Husky Energy Inc.

The 2021 capex includes a sustaining capital of roughly C$2.10 billion, according to a Jan. 28 news release. Total capex for the upstream segment is expected to be in the range of C$1.22 billion to C$1.41 billion, of which C$850 million to C$950 million will be allocated to the oil sands segment. Total capex for the downstream segment is forecast to be in the range of C$1.00 billion to C$1.20 billion, of which C$520 million to C$570 million will go to rebuild costs for the Superior refinery.

Taking into account the synergies from its merger with Husky, Cenovus said the capital budget will allow it to achieve the C$1.2 billion in annual run-rate synergies it has identified, of which C$1 billion is expected to be achieved this year. The company said it has made progress toward achieving the synergies, including consolidating its information technology systems, removing service overlaps and reducing its workforce by 20% to 25%, among others.

"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," Alex Pourbaix, Cenovus president and CEO, said in the release. The company said it is also targeting a longer-term net debt level at or below C$8 billion.

Total upstream production for 2021 is expected to be between 730,000 barrels of oil equivalent per day and 780,000 boe/d. Total downstream throughput for the year is anticipated to be in the range of 500,000 barrels per day to 550,000 b/d.