Cenovus Energy Inc. Q3 FY2024 earnings call

• Safety: Third quarter was heavy maintenance period, safely completed three major plan turnarounds with excellent safety record. - Upstream: Christina Lake turnaround completed 8 days ahead, production exceeded forecast by 15,000-20,000 bbls/day. Narrows Lake pipeline 93% constructed. Offshore Asia-Pacific production exceeded forecast. West White Rose project 85% complete. - Downstream: Lloyd-Minster upgrader and refinery combined utilization 92% post-turnaround. U.S. refining Lima refinery turnaround completed on schedule. - Corporate/Financial: Generated $2.4 billion operating margin, ~$2 billion adjusted funds flow, ~$600 million free funds flow. Capital investment $1.3 billion in Q3, annual guidance $4.5B-$5B unchanged. Net debt ~$4.2 billion at end of Q3. Returned ~$1.1 billion to shareholders in the quarter.

Upstream business delivered strong results with production of approximately 771,000 BOE per day and operating margin of $2.7 billion. Oil sands segment had 586,000 bbls/day oil production in Q3 with an operating margin of $2.5 billion. Conventional gas production was about 118,000 BOE per day. Offshore production was ~66,000 BOE per day with operating margin of $242 million. Canadian refining: Lloyd-Minster upgrader and refinery combined utilization 92% for the quarter. U.S. refining: Crude utilization 89% in the quarter, crude throughput 544,000 bbls/day.

• Annual capital spending guidance of $4.5 billion to $5 billion remains unchanged. - Expect increased upstream production and downstream reliability in the fourth quarter. - 2025 capital expected to be around $4.5 billion to $5 billion as outlined in Investor Day, with growth projects coming on production leading to capital ramp down later.

• Downstream reliability issues still present in some secondary units despite turnarounds. - TMX overrun negotiations ongoing with no definite resolution timeline yet. - Weather could impact startup of Narrows Lake steam system in winter months.

Q: What's the status of total negotiations for the uncapped portion of the TMX overrun and resolution timeline?

A: Geoff Murray said following regulatory process, no definite update, looking for resolution into the spring.