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Cenovus reports massive jump in quarterly profits

By Reuters   

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Canada’s Cenovus Energy Inc reported an over seven-fold jump in quarterly profit that surpassed Wall Street estimates and nearly tripled its dividend, as supply concerns boosted crude prices to multi-year highs.

U.S-listed shares of the oil and gas producer , which have gained nearly 34 per cent so far this year, were up as much as 5.65 per cent in premarket trading.

Russia’s invasion of Ukraine exacerbated concerns about an already-tight energy market and pushed crude prices to their highest levels in more than a decade. Brent crude , the global benchmark was trading at $105.25 a barrel on Wednesday.

Cenovus raised its capital expenditures forecast for the year by $300 million to a range of $2.9 billion to $3.3 billion, to reflect the increase in capital spend to complete the rebuild of its Superior Refinery in Wisconsin.

The rebuild is now expected to cost about $1.2 billion, up from about $950 million, due to factors including higher labour costs, pandemic-related expenses, inflation and supply chain constraints, the company said.


The company, which agreed to buy rival Husky Energy last year to create Canada’s No. 3 oil and gas producer, said upstream production rose to 798,600 barrels of oil equivalent per day (boepd) in the quarter, from 769,254 boepd a year earlier.

The company said the base dividend will increase from $0.14 per share to $0.42 per share annually, beginning with the second quarter of this year.

Excluding one-time items, Cenovus earned 79 Canadian cents per share, beating analysts’ estimates of 71 Canadian cents per share, according to IBES data from Refinitiv.

The Calgary Alta.-based company’s net earnings rose to $1.63 billion, or 81 cents per share, for the first-quarter ended March 31, from $220 million, or 10 cents per share, a year earlier.



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