CALGARY – Cenovus Energy Inc. will continue to keep a tight rein on capital spending even as crude prices surge to eight-year highs, the CEO of the Calgary-based oil producer said Tuesday.
In a conference call with analysts, chief executive Alex Pourbaix said the company has been pleased to see oil’s recent rally to heights not seen in years, as low global supply and increased economic activity due to the easing of pandemic health restrictions drives demand.
Last week, the benchmark West Texas Intermediate price soared above US$90 per barrel, and some analysts have predicted it will break the US$100 per barrel threshold later this year.
But Pourbaix said the sky-high prices won’t prompt a significant spending spree by Cenovus.
“I’m kind of old enough and bear enough scars that I guess when it comes to pricing, I’m always very cautious,” Pourbaix said.
“We anchor all of this company’s development plans at the bottom of the cycle for oil and gas. We won’t invest in a project that doesn’t deliver an acceptable return at the bottom of the cycle . . . which we would describe as kind of $45 WTI.”
Cenovus, like other major Canadian oil producers, spent several years cutting spending during a period of depressed commodity prices. Since oil prices rebounded last year, the company has been focused on increasing dividends to shareholders, share buybacks, and debt reduction.
According to the Canadian Association of Petroleum Producers, capital spending across the entire industry this year will remain well below boom-time levels, in spite of surging prices. CAPP projects capital spending in the oilpatch will grow by $6.0 billion this year to $32.8 billion, but that’s still far below the 2014 record high of $81 billion.
But while major new capital projects may not be in the cards, sustained current commodity prices will mean significantly more day-to-day activity for Cenovus in 2022.
Already in the fourth quarter of 2021, the company’s upstream production rose to 825,300 barrels of oil equivalent per day, compared with 467,200 boepd in the fourth quarter of 2020.
Total downstream throughput for the quarter was 469,900 barrels per day, up from 169,000 a year earlier.
“We’re going to be employing a lot of service – a lot of drilling and service rigs, a lot of contractors, just with our basic sustaining capital program,” Pourbaix said on the call.
High oil prices also mean Cenovus has been rapidly paying off debt, and is quickly approaching its $8-billion net debt target. That will mean more free cash flow available to allocate in 2022, Pourbaix said, increasing shareholder returns will be top of mind.
“I assure you we will continue the capital discipline you’ve come to expect from us,” he said.
Cenovus’ stock price sank Tuesday as the company reported a fourth-quarter loss of $408 million for the quarter ended Dec. 31, as it took a $1.9-billion one-time non-cash impairment charge related to its U.S. refinery business. The company, which completed its takeover of Husky Energy at the start of last year, says the loss amounted to 21 cents per share, compared with a loss of $153 million or 12 cents per share a year earlier.
Cenovus shares closed at $18.34 Tuesday, down 6.24 per cent from the previous day’s closing.
ATB Capital Markets analyst Patrick O’Rourke said in a note that while the company’s strong fourth quarter production volumes exceeded expectations, cash flow was lower than analysts had predicted due to weaker U.S. refining results.
“Overall, we view the event as neutral,” O’Rourke said of Cenovus’ fourth quarter earnings report.
Revenue for the quarter totalled $13.7 billion, up from $3.5 billion a year earlier and $12.7 billion in the third quarter.
Adjusted funds flow amounted to $1.9 billion or 97 cents per share compared with $333 million or 27 cents per share a year earlier.
Cenovus also reached agreements during the quarter for asset sales with total proceeds of about $1.5 billion. The company agreed to sell its Husky retail fuels network for approximately $420 million as well as its Wembley assets in its conventional business for about $238 million. The Wembley transaction is expected to close in the current quarter and the retail deal in mid-2022.
The company also announced the sale of its Tucker thermal oilsands project in northeast Alberta, a deal that closed Jan. 31 for about $800 million.
Cenovus said Tuesday it does not anticipate further significant divestitures in the near future.
Most job search advice is cookie-cutter. The advice you’re following is almost certainly the same advice other job seekers follow, making you just another candidate following the same script.
In today’s hyper-competitive job market, standing out is critical, a challenge most job seekers struggle with. Instead of relying on generic questions recommended by self-proclaimed career coaches, which often lead to a forgettable interview, ask unique, thought-provoking questions that’ll spark engaging conversations and leave a lasting impression.
Your level of interest in the company and the role.
Contributing to your employer’s success is essential.
You desire a cultural fit.
Here are the top four questions experts recommend candidates ask; hence, they’ve become cliché questions you should avoid asking:
“What are the key responsibilities of this position?”
Most likely, the job description answers this question. Therefore, asking this question indicates you didn’t read the job description. If you require clarification, ask, “How many outbound calls will I be required to make daily?” “What will be my monthly revenue target?”
“What does a typical day look like?”
Although it’s important to understand day-to-day expectations, this question tends to elicit vague responses and rarely leads to a deeper conversation. Don’t focus on what your day will look like; instead, focus on being clear on the results you need to deliver. Nobody I know has ever been fired for not following a “typical day.” However, I know several people who were fired for failing to meet expectations. Before accepting a job offer, ensure you’re capable of meeting the employer’s expectations.
“How would you describe the company culture?”
Asking this question screams, “I read somewhere to ask this question.” There are much better ways to research a company’s culture, such as speaking to current and former employees, reading online reviews and news articles. Furthermore, since your interviewer works for the company, they’re presumably comfortable with the culture. Do you expect your interviewer to give you the brutal truth? “Be careful of Craig; get on his bad side, and he’ll make your life miserable.” “Bob is close to retirement. I give him lots of slack, which the rest of the team needs to pick up.”
Truism: No matter how much due diligence you do, only when you start working for the employer will you experience and, therefore, know their culture firsthand.
“What opportunities are there for professional development?”
When asked this question, I immediately think the candidate cares more about gaining than contributing, a showstopper. Managing your career is your responsibility, not your employer’s.
Cliché questions don’t impress hiring managers, nor will they differentiate you from your competition. To transform your interaction with your interviewer from a Q&A session into a dynamic discussion, ask unique, insightful questions.
Here are my four go-to questions—I have many more—to accomplish this:
“Describe your management style. How will you manage me?”
This question gives your interviewer the opportunity to talk about themselves, which we all love doing. As well, being in sync with my boss is extremely important to me. The management style of who’ll be my boss is a determining factor in whether or not I’ll accept the job.
“What is the one thing I should never do that’ll piss you off and possibly damage our working relationship beyond repair?”
This question also allows me to determine whether I and my to-be boss would be in sync. Sometimes I ask, “What are your pet peeves?”
“When I join the team, what would be the most important contribution you’d want to see from me in the first six months?”
Setting myself up for failure is the last thing I want. As I mentioned, focus on the results you need to produce and timelines. How realistic are the expectations? It’s never about the question; it’s about what you want to know. It’s important to know whether you’ll be able to meet or even exceed your new boss’s expectations.
“If I wanted to sell you on an idea or suggestion, what do you need to know?”
Years ago, a candidate asked me this question. I was impressed he wasn’t looking just to put in time; he was looking for how he could be a contributing employee. Every time I ask this question, it leads to an in-depth discussion.
Other questions I’ve asked:
“What keeps you up at night?”
“If you were to leave this company, who would follow?”
“How do you handle an employee making a mistake?”
“If you were to give a Ted Talk, what topic would you talk about?”
“What are three highly valued skills at [company] that I should master to advance?”
“What are the informal expectations of the role?”
“What is one misconception people have about you [or the company]?”
Your questions reveal a great deal about your motivations, drive to make a meaningful impact on the business, and a chance to morph the questioning into a conversation. Cliché questions don’t lead to meaningful discussions, whereas unique, thought-provoking questions do and, in turn, make you memorable.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.
CALGARY – Canadian Natural Resources Ltd. reported a third-quarter profit of $2.27 billion, down from $2.34 billion in the same quarter last year.
The company says the profit amounted to $1.06 per diluted share for the quarter that ended Sept. 30 compared with $1.06 per diluted share a year earlier.
Product sales totalled $10.40 billion, down from $11.76 billion in the same quarter last year.
Daily production for the quarter averaged 1,363,086 barrels of oil equivalent per day, down from 1,393,614 a year ago.
On an adjusted basis, Canadian Natural says it earned 97 cents per diluted share for the quarter, down from an adjusted profit of $1.30 per diluted share in the same quarter last year.
The average analyst estimate had been for a profit of 90 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Oct. 31, 2024.
CALGARY – Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.
The company says it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.
Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.
Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.
Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.
On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.
This report by The Canadian Press was first published Oct. 31, 2024.
