CALGARY, Alberta - Cenovus Energy Inc . (TSX: NYSE:CVE) (NYSE: CVE) reported a substantial beat on both earnings per share (EPS) and revenue for the second quarter of 2024, sending its shares up 1.6%.
The energy company posted an adjusted EPS of $1.26, significantly surpassing the analyst estimate of $0.50. Revenue for the quarter also exceeded expectations, coming in at $14.9 billion against the consensus estimate of $10.68 billion.
The company's strong performance was attributed to solid production from its upstream assets and improved crude throughput at its U.S. refineries, which operated at a high utilization rate of 93%. Compared to the same quarter last year, total upstream production increased to 800,800 barrels of oil equivalent per day (BOE/d) from 729,900 BOE/d, reflecting the company's operational excellence and asset reliability.
Cenovus's President & CEO Jon McKenzie highlighted the achievement of a significant financial milestone with the company reaching its net debt target of $4.0 billion. This accomplishment allows Cenovus to shift its focus to enhancing shareholder returns, with plans to return 100% of excess free funds flow to shareholders starting in the third quarter.
Looking ahead, Cenovus has updated its 2024 guidance, reflecting a positive outlook for the remainder of the year. The company now expects total upstream production to range between 785,000 and 810,000 BOE/d, an increase of 7,500 BOE/d at the midpoint. Total downstream throughput is projected to be between 640,000 and 670,000 barrels per day (bbls/d), up by 5,000 bbls/d at the midpoint. Additionally, Cenovus has revised its operating cost guidance, with Oil Sands operating costs expected to decrease by 12% at the midpoint and Asia Pacific operating costs to drop by $2.00/BOE at the midpoint.
The revised guidance also includes updated Canadian Refining operating costs per barrel, ranging from $20.25 to $22.25 to account for the first-half cost increases associated with the Lloydminster Upgrader turnaround. General and administrative expenses are anticipated to reduce by $25 million at the midpoint.
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