Cenovus logo seen at the company's headquarters in Calgary, Alta., November 15, 2017. THE CANADIAN PRESS/Jeff McIntosh

Cenovus Energy reports $220M first-quarter profit compared with a loss a year ago

Cenovus Energy reports $220M first-quarter profit compared with a loss a year ago

CALGARY — The CEO of Cenovus Energy Inc. says more than half of the job cuts from its takeover of rival Husky Energy Inc. have been completed and it’s is well on the way to integrating and optimizing the two companies’ oilsands, refining and other operations.

On Friday, Cenovus reported a first-quarter profit of $220 million compared with a loss of $1.8 billion a year ago, despite accounting for $245 million in one-time integration costs in the quarter related to the $3.8-billion all-stock acquisition that closed in January.

“In the first quarter, we completed about two-thirds of our planned workforce reductions with the balance to occur later this year and into 2022,” said Cenovus CEO Alex Pourbaix on a conference call.

“Combined with our 2021 capital budget, which set us to deliver $600 million in capital synergies, we are on track to achieve the combined $1.2-billion annual run rate synergies by the end of this year and we’re already seeing synergies in the operations that were not included in the initial annual run rate.”

Cenovus targeted reductions of between 1,720 and 2,150 workers from the combined workforce of 8,600 following its takeover of Husky. Workforce optimization is expected to deliver about $400 million of $600 million per year in operating savings.

It said total integration costs for the year are expected to be within the anticipated $500 million to $550 million range.

Earlier this week, U.S. oil producer ConocoPhillips announced plans to sell its roughly 10 per cent stake in Cenovus, about 208 million shares, that it received in 2017 from the sale of oilsands and natural gas assets. The stock sales are to take place in the open market and be completed by later this year.

Pourbaix said he was surprised by the manner in which the sale was announced, but Cenovus knew ConocoPhillips didn’t intend to be a long-term shareholder. He said the two companies have been in touch since then.

Higher oil prices will allow Cenovus to reach its debt reduction target of $10 billion by year-end, removing the need to sell assets, but Pourbaix reiterated that the company is continuing to sort its operations into core and non-core buckets.

Cenovus reported revenue totalled $9.15 billion in the first three months of 2021, up from $3.96 billion in the same quarter last year, thanks to higher commodity prices and volumes.

Upstream production was 769,254 barrels of oil equivalent per day, up from 482,594 boe/d a year ago, while downstream refinery throughput was 469,100 barrels per day, up from 221,100 bpd in the same quarter last year.

Analysts said in reports that Cenovus largely met or slightly exceeded earnings and production expectations.

This report by The Canadian Press was first published May 7, 2021.

Companies in this story: (TSX:CVE)

Dan Healing, The Canadian Press

Just Posted

The City of Red Deer sits at 249 active cases of the virus, after hitting a peak of 565 active cases on Feb. 22. (Black Press file image)
Red Deer down to 119 active COVID-19 cases

Province identifies 179 new cases Saturday

Red Deer Emergency Services responded to an explosion at a duplex on Rupert Crescent Saturday morning. (Photo by Sean McIntosh/Advocate staff)
Firefighters respond to explosion in Red Deer early Saturday morning

There was an explosion at a Red Deer duplex early Saturday morning.… Continue reading

Terry Betts, of Kananaskis, looks at the vehicle he was hoping to sell during the Quick Times Red Deer Swap Meet in the Westerner Park parking lot Saturday. (Photo by Sean McIntosh/Advocate staff)
Quick Times Red Deer Swap Meet held outdoors

A big automotive swap meet was held outdoors this year in Red… Continue reading

The Alberta Sports Hall of Fame and Museum is set to re-open on July 2. (File Photo)
Alberta Sports Hall of Fame and Museum to reopen Monday

The Alberta Sports Hall of Fame and Museum will reopen for visitors… Continue reading

Huzaifa (left), Saif (middle) and Zoya (right) were among the 60 or so Red Deerians who participated in a vigil for the victims of a recent terrorist attack that killed four people in London Ont. (Photo by BYRON HACKETT/Advocate Staff)
Red Deer vigil honours victims of London, Ont. terrorist attack

About 60 people gathered at the corner of 49 Ave. and 50… Continue reading

A man wears a face mask as he walks by a sign for a COVID-19 vaccination site in Montreal, Sunday, May 16, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Canada paid a premium to get doses from Pfizer earlier than planned

OTTAWA — Canada paid a premium to get more than 250,000 doses… Continue reading

The Kamloops Indian Residential School in Kamloops, B.C., is shown in this 1930 handout photo. HO — Deschatelets-NDC Archives
Calls grow for Ottawa to review settlement decisions for residential school survivors

Lawyer Teri Lynn Bougie still cries when she talks about the final… Continue reading

Syringes are readied at a COVID-19 mobile vaccination clinic for members of First Nations and their partners, Friday, April 30, 2021 in Montreal. Most of the federal contracts for COVID-19 vaccines allow for Canada to donate some of its doses to other countries or international aid organizations and in at least three cases, for the doses to be resold.THE CANADIAN PRESS/Ryan Remiorz
Canada’s vaccine contracts allow for doses to be donated, in some cases resold

OTTAWA — Most of the federal contracts for COVID-19 vaccines allow for… Continue reading

Grand Chief Stewart Phillip, President of the Union of British Columbia Indian Chiefs, responds to the report on the National Inquiry into Missing and Murdered Indigenous Women and Girls, in Vancouver, on Monday June 3, 2019. As stories of the horrors of residential schools circulate after the Tk'emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
Two sides of the same coin: Ex-foster kids identify with residential school survivors

VANCOUVER — As stories of the horrors of residential schools circulate after… Continue reading

A woman sits and weeps at the scene of Sunday's hate-motivated vehicle attack in London, Ont. on Tuesday, June 8, 2021. Four members of a family in London, Ont., are set to be buried today. The public has been invited to help celebrate the lives of Talat Afzaal, 74, her son Salman Afzaal, 46, his wife Madiha Salman, 44, and their 15-year-old daughter Yumna Salman.THE CANADIAN PRESS/ Geoff Robins
Funeral to be held today for London family killed in attack

LONDON, Ont. — Four members of a Muslim family killed in what… Continue reading

Canadian Prime Minister Justin Trudeau and United States President Joe Biden listen to United Kingdom Prime Minister Boris Johnson deliver opening remarks at a plenary session at the G7 Summit in Carbis Bay, United Kingdom Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau to discuss foreign policy with G7 leaders at second day of summit meeting

CARBIS BAY, CORNWALL, ENGLAND — Foreign policy is on the agenda for… Continue reading

Multivitamins are shown on the packaging line at the Pfizer plant in Montreal, Thursday, July 12, 2012. THE CANADIAN PRESS/Graham Hughes
Canadian drug companies want new pricing regs delayed again until after pandemic

OTTAWA — Almost three dozen Canadian pharmaceutical companies made a direct appeal… Continue reading

In this file photo, a lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018. (By THE CANADIAN PRESS)
No winning ticket for Friday’s $70 million Lotto Max jackpot

TORONTO — The massive $70 million dollar Lotto Max jackpot remained unclaimed… Continue reading

Most Read