(Corrects name of project to Foster Creek from Foster Lake in
By Nia Williams
CALGARY, Alberta Feb 16 Canadian oil and gas
producer Cenovus Energy Inc said on Thursday it is
doing engineering and design work at two of its deferred oil
sands projects in northern Alberta and it could potentially
reactivate them in 2018 and 2019, respectively.
The two projects, Foster Creek phase H and Narrows Lake
phase A, would add up to 75,000 barrels per day of production.
That would be in addition to Cenovus' 50,000 bpd Christina Lake
phase G project, which the company said in December it was
Chief Executive Brian Ferguson said Cenovus has not made a
sanctioning decision yet but will provide more information on
capital costs and timing of a decision in June.
"We've got a very clear, full portfolio of opportunities in
the oil sands where we literally have the next five years of
investment opportunity ahead of us," Ferguson told analysts on a
quarterly earnings call.
Calgary-based Cenovus has committed to capacity on
TransCanada Corp's proposed Keystone XL and Energy East
pipelines, Ferguson said, although he did not specify volumes.
Ferguson also told Reuters in an interview that given
Cenovus' oil sands growth outlook, the company is more likely to
sell than buy any production assets, and a couple of
conventional oil projects have been earmarked for sale when
markets are deemed appropriate.
The remarks came as Cenovus reported a surprise
fourth-quarter profit as production rose and costs fell.
The company said its oil sands operating costs fell 12
percent in 2016, while operating costs for its conventional oil
assets fell 10 percent.
Cenovus' total crude oil production rose about 10 percent to
219,551 barrels per day in the fourth quarter. Expansions at its
Christina Lake and Foster Creek projects in northern Alberta
increased total oil sands production capacity by 26 percent to
an average of 390,000 barrels per day in the quarter.
Operating earnings were C$321 million, or 39 cents a share,
compared with a loss of C$438 million, or 53 cents a share, in
the fourth quarter of 2015.
Analysts had expected the company to report a quarterly
loss. Cenovus shares were last up 0.4 percent on the Toronto
Stock Exchange at C$18.03.
Cenovus reported net earnings of C$91 million ($69.73
million), or 11 Canadian cents per share, in the three months
ended Dec. 31, compared with a loss of C$641 million, or 77
cents per share, in the year-prior quarter.
($1 = 1.3050 Canadian dollars)
(Additional reporting by Muvija M in Bengaluru; Editing by
Shounak Dasgupta and Leslie Adler)