Cenovus posts profit as $13.3-billion Conoco deal starts paying off

Oil producer Cenovus Energy Inc on Thursday reported a profit in the second quarter compared to a year-ago loss, helped by its purchase of ConocoPhillips’ Canadian oilsands assets.

Cenovus, which paid $13.3 billion in March to buy the assets, said the purchase boosted total production by 65 per cent to 436,929 barrels of oil equivalent per day in the quarter. The deal closed on May 17.

ConocoPhillips sold its 50 per cent interest in the Foster Creek Christina Lake oil sands partnership as well as the majority of its western Canada Deep Basin conventional gas assets.

“With 45 days of contribution from the acquired assets, the company increased adjusted funds flow by 80 per cent, free funds flow by 128 per cent,” Cenovus said in a statement.

Cenovus’s revenue climbed to $4.04 billion in the second quarter ended June 30, from $2.75 billion a year earlier.

The Calgary-based oil producer, which is searching for a new CEO to replace Brian Ferguson, reported a net profit of $2.64 billion, or $2.37 per share in the quarter, compared to a loss of $267 million or 5 cents per share, a year earlier.

Cenovus’s shares have lost more than 40 per cent of their value after investors rejected Ferguson’s rationale to buy the Conoco assets, at a time when global crude prices remain weak and international energy firms are exiting the region.

© Thomson Reuters 2017

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