Cenovus to slow down spending in 2014, grow production 10 per cent

CALGARY – Cenovus Energy Inc. (TSX:CVE) will focus in 2014 on developing the oilsands properties it already has in the hopper rather than seeking regulatory approvals to add new ones to its portfolio.

“Our strategy has not changed in any way,” CEO Brian Ferguson said during a conference call to discuss the company’s plans and outlook for next year.

“It’s simply we have now hit the point in the evolution of that strategy where, rather than focusing on building the portfolio, what we’re now focusing on is developing the portfolio over the next four- to five-year period.”

Since splitting off from Encana Corp. (TSX:ECA) four years ago, Cenovus has been concentrating on winning regulatory approvals for a host of oilsands projects. It now believes it has enough on the go to keep itself busy over the next four or five years.

“We are putting less emphasis on delineation and approvals and more on the execution of projects that are expected to deliver increased cash flow and earnings in the near to medium term,” said Ferguson.

Cenovus is on track to hit 525,000 barrels per day of net oil production within the next decade.

Oil production for 2014 is expected to average between 190,000 and 208,000 barrels a day, a 10 per cent increase from its 2013 forecast.

Cenovus plans to spend between $2.8 billion and $3.1 billion in 2014, a 13 per cent decrease compared with this year.

“This is to maintain capital discipline and also to live more within our current cash flow expectations for the year,” said Ferguson.

Executives on the call also said they haven’t been happy with operating costs at Cenovus oilsands projects and will be making changes in 2014 that they expect will lead to sustained reductions.

Cenovus shares fell 33 cents to $29.87 on Thursday on the Toronto Stock Exchange.