Cenovus Energy Q3 2026 Earnings Call Transcript

Cenovus Energy (NYSE:CVE) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Cenovus Energy reported a significant increase in production, surpassing the 1 million boe per day milestone, with oil sands operations being the key driver.

The Christina Lake and Foster Creek projects achieved record production levels, with Christina Lake reaching an all-time high of 381,000 barrels per day.

The company completed four major turnarounds without any recordable injuries, showcasing strong safety performance and operational excellence.

Cenovus Energy’s proactive management led to a shortened turnaround timeline, reducing production impact by approximately 180,000 barrels.

The company is ahead of schedule with the Christina Lake North facility expansion, expecting a 2026 exit rate of 125,000 barrels per day.

Full Transcript

OPERATOR (Moderator)

Good morning everyone. Thank you for standing by and welcome to Cenovus Energy’s third quarter 2026 results conference call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your touchtone telephone. As a reminder, this call is being recorded. I would now like to turn the meeting over to Mr. Patrick Reed, Vice President, Investor Relations and Internal Audit.

Please go ahead, Mr. Reed.

Patrick Reed (Vice President, Investor Relations and Internal Audit)

Thank you, operator. Good morning everyone and welcome to Cenovus 2026 Third Quarter Results Conference Call. On the call this morning, our CEO John McKenzie and CFO Cam Sandhar will take you through our results. Then we’ll open the line for John, Cam and other members of the Cenovus management team to take your questions. Before getting started, I’ll refer you to our advisories located at the end of today’s news release. These describe the forward-looking information, non-GAAP measures and oil and gas terms referred to today.

They also outline the risk factors and assumptions relevant to this discussion. Additional information is available in Cenovus Annual MD&A and our most recent AIF and Form 40-F. And as a reminder, all figures we reference on the call today will be in Canadian dollars unless otherwise noted. For the question and answer portion of the call, please keep to one question with a maximum of one follow-up. You’re welcome to rejoin the queue for any other follow-up questions you may have and for detailed modeling questions.

Please follow up directly with our investor relations team after the. I will now turn the call over to John. John, please go ahead.

John McKenzie (Chief Executive Officer)

Great. And thank you, Patrick, and good morning everybody. I’d like to begin by recognizing our safety performance and the people across Cenovus who work diligently to keep their colleagues, communities and our assets safe. Their commitment has been particularly evident during the execution of our turnarounds. Over the past 18 months, our teams have successfully executed four major turnarounds, all without a recordable injury. That track record speaks to the preparation, discipline and safety culture our people bring to these complex events.

For the most recent Christina Lake turnaround, we drew on experience from across our oil sands operations to help us manage significant and competing critical path work within a compressed window. The result was a turnaround delivered safely, ahead of schedule and under budget. So now turning to our third quarter results. In our upstream business, production increased by more than 50,000 barrels a day from the prior quarter to average nearly 1,025,000 boe per day, surpassing the 1 million boe per day milestone. Oil sands was the primary driver of the increase, producing more than 830,000 barrels per day and setting a third consecutive quarterly production record. At Christina Lake, we reached another all-time high of 381,000 barrels per day with continued strength at Narrows Lake and from across the redevelopment well program, Christina Lake North.

This more than offset the impacts of our planned turnaround which was completed in September ahead of schedule and with less production impact than expected. In fact, the turnaround outperformed our updated plan which we had already improved through the revised guidance we set out in second quarter results. Through a combination of strong planning and proactive management of the water-oil ratio, we were able to shorten the timeline by four days which allowed us to produce more oil through the plant, reducing the production impact of the turnaround by approximately 180,000 barrels.

Reservoir performance also continues to exceed expectations with Narrows Lake production reaching as high as 82,000 barrels per day during the quarter. The fifth Narrows Lake well pad is now being steamed and is expected to be online near the end of the year, which will help sustain these higher rates into 2027. At Christina Lake North, the facility expansion project remains ahead of plan while the redevelopment well program continues to support higher production. By the end of September, we had 22 redevelopment wells online, contributing to production of more than 115,000 barrels a day during the quarter. The fifth steam generator was brought on in early October alongside our second new well pad since acquiring Christina Lake North. Together, these additions support an expected 2026 exit rate around 125,000 barrels per day, which represents an increase of about 15 to 20,000 barrels a day since we acquired this asset last year.

At Foster Creek, production increased to an all-time high of 248,000 barrels per day, up more than 30,000 barrels a day from the second quarter. We brought on six new well pads so far this year following the completion of the Foster Creek optimization project. The initial reservoir performance has been exceptional. In fact, both Foster Creek and Christina Lake—very strong well performance has resulted in our new projects producing well above expectations.

At the same time, we’ve optimized our facilities in real time to handle more production than we previously thought possible, enabling us to produce above capacity and accelerate recovery of the resource. Moving to Sunrise, production averaged 70,000 barrels a day in the quarter, marking the early achievement of a production target we’d originally set for 2027. That compares to production of around 45,000 barrels a day when we acquired full ownership of the asset in 2022, an increase of around 25,000 barrels per day. That performance reflects the work our people have done to implement their operating model and to.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.