- Cenovus Energy (CVE) has generated a net loss of C$235 million during its second quarter, compared to a net earnings of around $1.8 billion in 2019’s same quarter
- The company attributed the loss to the impact of the COVID-19 pandemic, as well as the OPEC+ trade war, which played havoc with global oil prices earlier this year
- To help weather the operating loss, the company’s net debt rose by $800 million to $8.2 billion during the quarter
- To bolster is liquidity, Cenuovus currently has $5.6 billion in committed credit facilities and a further $1.6 billion of uncommitted demand facilities
- Cenovus Energy (CVE) is down 1.35 per cent and is trading at $6.59 per share
Cenovus Energy (CVE) has generated a net loss of C$235 million during its second quarter.
For comparison, the company posted net earnings of $1.8 billion in 2019’s same quarter.
The steep losses follow an horrific quarter for the oil and gas industry, as an OPEC+ trade war and the impact of the COVID-19 pandemic continued to play havoc with global oil price benchmarks.
The resulting oil price drop caused Cenovus to generate significantly lower operating earnings, which was made worse by a $120 million deduction from unrealised risk management losses.
As a result, the company’s net debt rose by $800 million to $8.2 billion in just once quarter.
To help weather the coming quarters Cenuovus currently has $5.6 billion in committed credit facilities and a further $1.6 billion of uncommitted demand facilities.
Alex Pourbaix, Cenovus President and CEO, said April was the low point of the downturn and the first signs of recovery began to take hold in May and June.
“That said, we expect the commodity price environment to remain volatile for some time.
“We believe the flexibility of our assets and our low cost structure position us to withstand a continued period of low prices if necessary. And we’re ready to play a significant role in helping to lead Canada’s economic recovery,” he added.
Turning to the company’s strategy during the downturn, Alex went on to say Cenovus was able manage the timing, storage and sales approach for its oil production.
This resulted in a 11 per cent decrease in production during April. However, with the oil price rising rapidly since June, production has since ramped back up.
Despite the recovering oil price, the company’s crude-by-rail program remains suspended.
“We are maximizing value for our shareholders even in this challenging economic environment,” Alex said.
Cenovus Energy (CVE) is down 1.35 per cent and is trading at $6.59 per share at 11:39am EDT.