Cenovus Energy’s operating loss grows despite cost-cutting progress

CALGARY – Cenovus Energy Inc. (TSX:CVE) reported a $251-million loss for the third quarter and said Thursday it’s looking for additional areas to cut costs.

The loss amounted to 30 cents per share of the Calgary-based company, which is active in Alberta’s oilsands, conventional oil production and oil refining.

A year earlier, Cenovus recorded a third-quarter profit of $1.8 billion or $2.16 per share, boosted by a $1.9-billion gain on asset sales that offset an operating loss.

It’s operating loss in this year’s third quarter was $236 million or 28 cents per share, which compared with last year’s third-quarter operating loss of $28 million or three cents per share.

Cenovus chief executive Brian Ferguson says the company has lowered its costs and added oilsands production capacity but remains committed to finding additional cost reductions.

During the third quarter, Cenovus achieved a target of cutting $500 million this year from its original 2016 budget. It didn’t specify where additional cost cutting will be achieved.

“With the significant improvements we’ve made in our cost structures, we forecast that we can cover all of our operating and capital costs as well as our dividend with a West Texas Intermediate price in the US$45 to $50 range,” Ferguson said in a statement.

“As prices move beyond that range, we expect to generate free cash flow, giving us more capacity to further invest in growth.”