CENOVUS ENERGY INC. | |||||||||||||||||
(Registrant) |
By: | /s/ Christine D. Lee | |||||||||||||||||||||||||
Name: | Christine D. Lee | |||||||||||||||||||||||||
Title: | Assistant Corporate Secretary |
Exhibit No. | ||||||||
News Release dated February 15, 2024 | ||||||||
Interim Consolidated Financial Statements (unaudited) for the period ended December 31, 2023 | ||||||||
Exhibit 99.1 | ||||||||
News release | ![]() |
Financial, production & throughput summary | |||||||||||||||||
For the period ended December 31 |
2023 Q4 | 2023 Q3 | 2022 Q4 | 2023 FY | 2022 FY | ||||||||||||
Financial ($ millions, except per share amounts) | |||||||||||||||||
Cash from (used in) operating activities | 2,946 | 2,738 | 2,970 | 7,388 | 11,403 | ||||||||||||
Adjusted funds flow2 |
2,062 | 3,447 | 2,346 | 8,803 | 10,978 | ||||||||||||
Per share (diluted)2 |
1.09 | 1.81 | 1.19 | 4.57 | 5.47 | ||||||||||||
Capital investment | 1,170 | 1,025 | 1,274 | 4,298 | 3,708 | ||||||||||||
Free funds flow2 |
892 | 2,422 | 1,072 | 4,505 | 7,270 | ||||||||||||
Excess free funds flow2 |
471 | 1,989 | 786 | ||||||||||||||
Net earnings (loss) | 743 | 1,864 | 784 | 4,109 | 6,450 | ||||||||||||
Per share (diluted) | 0.39 | 0.97 | 0.39 | 2.12 | 3.20 | ||||||||||||
Long-term debt, including current portion | 7,108 | 7,224 | 8,691 | 7,108 | 8,691 | ||||||||||||
Net debt | 5,060 | 5,976 | 4,282 | 5,060 | 4,282 | ||||||||||||
Production and throughput (before royalties, net to Cenovus) | |||||||||||||||||
Oil and NGLs (bbls/d)1 |
662,600 | 652,400 | 664,900 | 640,000 | 641,900 | ||||||||||||
Conventional natural gas (MMcf/d) | 876.3 | 867.4 | 852.0 | 832.6 | 866.1 | ||||||||||||
Total upstream production (BOE/d)1 |
808,600 | 797,000 | 806,900 | 778,700 | 786,200 | ||||||||||||
Total downstream throughput (bbls/d) |
579,100 | 664,300 | 473,300 | 560,400 | 493,700 |
Preferred shares dividend summary | ||||||||
Share series | Rate (%) | Amount ($/share) | ||||||
Series 1 | 2.577 | 0.16106 | ||||||
Series 2 | 6.772 | 0.42094 | ||||||
Series 3 | 4.689 | 0.29306 | ||||||
Series 5 | 4.591 | 0.28694 | ||||||
Series 7 | 3.935 | 0.24594 |
2024 planned maintenance | |||||||||||||||||
Potential quarterly production/throughput impact (Mbbls/d) | |||||||||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Annualized impact |
|||||||||||||
Upstream |
|||||||||||||||||
Oil Sands |
— | 2-3 | 50 - 60 |
— | 13 - 16 |
||||||||||||
Atlantic |
8-10 | 8-10 | 8-10 | — | 5-7 | ||||||||||||
Conventional |
— | 3-5 | 4-6 | — | 2-4 | ||||||||||||
Downstream | |||||||||||||||||
Canadian Refining |
— | 42 - 46 |
— | — | 10-12 | ||||||||||||
U.S Refining |
20 - 24 |
12-16 | 30 - 34 |
56 - 60 |
30 - 35 |
Conference call today
9 a.m. Mountain Time (11 a.m. Eastern Time)
Cenovus will host a conference call today, February 15, 2024, starting at 9 a.m. MT (11 a.m. ET).
To join the conference call without operator assistance, please register here approximately 5 minutes in advance to receive an automated call-back when the session begins.
Alternatively, you can dial 888-664-6383 (toll-free in North America) or 416-764-8650 to reach a live operator who will join you into the call. A live audio webcast will also be available and will be archived for approximately 90 days.
|
Product type by operating segment | ||||||||
Three months ended December 31, 2023 |
Full year ended December 31, 2023 |
|||||||
Oil Sands | ||||||||
Bitumen (Mbbls/d) | 595.1 | 576.7 | ||||||
Heavy crude oil (Mbbls/d) | 17.5 | 16.7 | ||||||
Conventional natural gas (MMcf/d) | 12.3 | 11.9 | ||||||
Total Oil Sands segment production (MBOE/d) | 614.6 | 595.4 | ||||||
Conventional | ||||||||
Light crude oil (Mbbls/d) | 6.1 | 5.9 | ||||||
Natural gas liquids (Mbbls/d) | 22.8 | 21.7 | ||||||
Conventional natural gas (MMcf/d) | 569.6 | 554.1 | ||||||
Total Conventional segment production (MBOE/d) | 123.8 | 119.9 | ||||||
Offshore | ||||||||
Light crude oil (Mbbls/d) | 9.7 | 8.2 | ||||||
Natural gas liquids (Mbbls/d) | 11.4 | 10.8 | ||||||
Conventional natural gas (MMcf/d) | 294.4 | 266.6 | ||||||
Total Offshore segment production (MBOE/d) | 70.2 | 63.4 | ||||||
Total upstream production (MBOE/d) | 808.6 | 778.7 |
Upstream (1) |
Downstream (1) |
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
($ millions) | Q4 2023 | Q3 2023 | Q4 2022 | Q4 2023 | Q3 2023 | Q4 2022 | Q4 2023 | Q3 2023 | Q4 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Sales | 7,797 | 8,783 | 8,251 | 8,404 | 9,658 | 8,302 | 16,201 | 18,441 | 16,553 | ||||||||||||||||||||||||||||||||||||||||||||
Less: Royalties | 902 | 1,135 | 875 | — | — | — | 902 | 1,135 | 875 | ||||||||||||||||||||||||||||||||||||||||||||
6,895 | 7,648 | 7,376 | 8,404 | 9,658 | 8,302 | 15,299 | 17,306 | 15,678 | |||||||||||||||||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchased Product | 663 | 900 | 1,079 | 7,888 | 7,947 | 6,993 | 8,551 | 8,847 | 8,072 | ||||||||||||||||||||||||||||||||||||||||||||
Transportation and Blending | 2,894 | 2,397 | 2,984 | — | — | — | 2,894 | 2,397 | 2,984 | ||||||||||||||||||||||||||||||||||||||||||||
Operating | 864 | 914 | 955 | 826 | 778 | 759 | 1,690 | 1,692 | 1,714 | ||||||||||||||||||||||||||||||||||||||||||||
Realized (Gain) Loss on Risk Management | 19 | (10) | 134 | (6) | 11 | (8) | 13 | 1 | 126 | ||||||||||||||||||||||||||||||||||||||||||||
Operating Margin | 2,455 | 3,447 | 2,224 | (304) | 922 | 558 | 2,151 | 4,369 | 2,782 |
Upstream (1) |
Downstream (1) |
Total | |||||||||||||||||||||||||||||||||
($ millions) | 2023 | 2022 | 2023 | 0 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||
Gross Sales | 31,082 | 41,142 | 32,626 | 38,010 | 63,708 | 79,152 | |||||||||||||||||||||||||||||
Less: Royalties | 3,270 | 4,868 | — | — | 3,270 | 4,868 | |||||||||||||||||||||||||||||
27,812 | 36,274 | 32,626 | 38,010 | 60,438 | 74,284 | ||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||
Purchased Product | 3,152 | 6,741 | 28,273 | 32,409 | 31,425 | 39,150 | |||||||||||||||||||||||||||||
Transportation and Blending | 11,088 | 12,301 | — | — | 11,088 | 12,301 | |||||||||||||||||||||||||||||
Operating | 3,690 | 3,789 | 3,201 | 3,050 | 6,891 | 6,839 | |||||||||||||||||||||||||||||
Realized (Gain) Loss on Risk Management | 12 | 1,619 | — | 112 | 12 | 1,731 | |||||||||||||||||||||||||||||
Operating Margin | 9,870 | 11,824 | 1,152 | 2,439 | 11,022 | 14,263 |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
($ millions) | Dec. 31, 2023 | Sept. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |||||||||||||||
Cash From (Used in) Operating Activities (1) |
2,946 | 2,738 | 2,970 | 7,388 | 11,403 | |||||||||||||||
(Add) Deduct: | ||||||||||||||||||||
Settlement of Decommissioning Liabilities | (65) | (68) | (49) | (222) | (150) | |||||||||||||||
Net Change in Non-Cash Working Capital | 949 | (641) | 673 | (1,193) | 575 | |||||||||||||||
Adjusted Funds Flow | 2,062 | 3,447 | 2,346 | 8,803 | 10,978 | |||||||||||||||
Capital Investment | 1,170 | 1,025 | 1,274 | 4,298 | 3,708 | |||||||||||||||
Free Funds Flow | 892 | 2,422 | 1,072 | 4,505 | 7,270 | |||||||||||||||
Add (Deduct): | ||||||||||||||||||||
Base Dividends Paid on Common Shares | (261) | (264) | (201) |
Dividends Paid on Preferred Shares | (9) | — | — | |||||||||||||||||
Settlement of Decommissioning Liabilities | (65) | (68) | (49) | |||||||||||||||||
Principal Repayment of Leases | (72) | (70) | (74) | |||||||||||||||||
Acquisitions, Net of Cash Acquired | (14) | (32) | (7) | |||||||||||||||||
Proceeds From Divestitures | — | 1 | 45 | |||||||||||||||||
Excess Free Funds Flow | 471 | 1,989 | 786 |
Investors | Media | ||||
Investor Relations general line 403-766-7711
|
Media Relations general line 403-766-7751
|
For the periods ended December 31, 2023 |
TABLE OF CONTENTS |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
2 |
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (unaudited) |
Three Months Ended | Twelve Months Ended |
||||||||||||||||||||||||||||
Notes | 2023 | 2022 |
2023 | 2022 |
|||||||||||||||||||||||||
Revenues | 1 | ||||||||||||||||||||||||||||
Gross Sales | 14,036 | 14,938 | 55,474 | 71,765 | |||||||||||||||||||||||||
Less: Royalties | 902 | 875 | 3,270 | 4,868 | |||||||||||||||||||||||||
13,134 | 14,063 | 52,204 | 66,897 | ||||||||||||||||||||||||||
Expenses | 1 | ||||||||||||||||||||||||||||
Purchased Product (1) |
6,558 | 6,920 | 24,715 | 33,958 | |||||||||||||||||||||||||
Transportation and Blending (1) |
2,662 | 2,720 | 10,141 | 11,126 | |||||||||||||||||||||||||
Operating (1) |
1,563 | 1,456 | 6,352 | 5,816 | |||||||||||||||||||||||||
(Gain) Loss on Risk Management | 22 | (28) | 96 | 61 | 1,636 | ||||||||||||||||||||||||
Depreciation, Depletion and Amortization | 6,10,11,13 |
1,270 | 1,470 | 4,644 | 4,679 | ||||||||||||||||||||||||
Exploration Expense | 9 | 32 | 2 | 42 | 101 | ||||||||||||||||||||||||
(Income) Loss From Equity-Accounted Affiliates | 12 | (28) | (4) | (51) | (15) | ||||||||||||||||||||||||
General and Administrative | 71 | 320 | 688 | 865 | |||||||||||||||||||||||||
Finance Costs | 4 | 178 | 189 | 671 | 820 | ||||||||||||||||||||||||
Interest Income | (33) | (37) | (133) | (81) | |||||||||||||||||||||||||
Integration, Transaction and Other Costs | 36 | 27 | 85 | 106 | |||||||||||||||||||||||||
Foreign Exchange (Gain) Loss, Net | 5 | (74) | (63) | (67) | 343 | ||||||||||||||||||||||||
Revaluation (Gain) Loss | 3 | 1 | — | 34 | (549) | ||||||||||||||||||||||||
Re-measurement of Contingent Payments | 15 | (24) | 20 | 59 | 162 | ||||||||||||||||||||||||
(Gain) Loss on Divestiture of Assets | (3) | (25) | (14) | (269) | |||||||||||||||||||||||||
Other (Income) Loss, Net | (21) | (65) | (63) | (532) | |||||||||||||||||||||||||
Earnings (Loss) Before Income Tax | 974 | 1,037 | 5,040 | 8,731 | |||||||||||||||||||||||||
Income Tax Expense (Recovery) | 7 | 231 | 253 | 931 | 2,281 | ||||||||||||||||||||||||
Net Earnings (Loss) | 743 | 784 | 4,109 | 6,450 | |||||||||||||||||||||||||
Net Earnings (Loss) Per Common Share ($) |
8 | ||||||||||||||||||||||||||||
Basic | 0.39 | 0.40 | 2.15 | 3.29 | |||||||||||||||||||||||||
Diluted | 0.39 | 0.39 | 2.12 | 3.20 | |||||||||||||||||||||||||
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
3 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
Notes | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Net Earnings (Loss) | 743 | 784 | 4,109 | 6,450 | |||||||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax | 19 | ||||||||||||||||||||||||||||
Items That Will not be Reclassified to Profit or Loss: | |||||||||||||||||||||||||||||
Actuarial Gain (Loss) Relating to Pension and Other Post-
Employment Benefits
|
(59) | 13 | (44) | 71 | |||||||||||||||||||||||||
Change in the Fair Value of Equity Instruments at FVOCI (1) |
22 | 56 | — | 56 | 2 | ||||||||||||||||||||||||
Items That may be Reclassified to Profit or Loss: | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | (243) | (183) | (274) | 713 | |||||||||||||||||||||||||
Total Other Comprehensive Income (Loss), Net of Tax | (246) | (170) | (262) | 786 | |||||||||||||||||||||||||
Comprehensive Income (Loss) | 497 | 614 | 3,847 | 7,236 | |||||||||||||||||||||||||
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
4 |
CONSOLIDATED BALANCE SHEETS (unaudited) |
Notes | 2023 | 2022 | |||||||||||||||
Assets | |||||||||||||||||
Current Assets | |||||||||||||||||
Cash and Cash Equivalents | 2,227 | 4,524 | |||||||||||||||
Accounts Receivable and Accrued Revenues | 3,035 | 3,473 | |||||||||||||||
Income Tax Receivable | 416 | 121 | |||||||||||||||
Inventories | 4,030 | 4,312 | |||||||||||||||
Total Current Assets | 9,708 | 12,430 | |||||||||||||||
Restricted Cash | 16 | 211 | 209 | ||||||||||||||
Exploration and Evaluation Assets, Net | 1,9 |
738 | 685 | ||||||||||||||
Property, Plant and Equipment, Net | 1,10 |
37,250 | 36,499 | ||||||||||||||
Right-of-Use Assets, Net | 1,11 |
1,680 | 1,845 | ||||||||||||||
Income Tax Receivable | 25 | 25 | |||||||||||||||
Investments in Equity-Accounted Affiliates | 12 | 366 | 365 | ||||||||||||||
Other Assets | 13 | 318 | 342 | ||||||||||||||
Deferred Income Taxes | 696 | 546 | |||||||||||||||
Goodwill | 1 |
2,923 | 2,923 | ||||||||||||||
Total Assets | 53,915 | 55,869 | |||||||||||||||
Liabilities and Equity | |||||||||||||||||
Current Liabilities | |||||||||||||||||
Accounts Payable and Accrued Liabilities | 5,480 | 6,124 | |||||||||||||||
Income Tax Payable | 88 | 1,211 | |||||||||||||||
Short-Term Borrowings | 14 | 179 | 115 | ||||||||||||||
Lease Liabilities | 11 | 299 | 308 | ||||||||||||||
Contingent Payments | 15 | 164 | 263 | ||||||||||||||
Total Current Liabilities | 6,210 | 8,021 | |||||||||||||||
Long-Term Debt | 14 | 7,108 | 8,691 | ||||||||||||||
Lease Liabilities | 11 | 2,359 | 2,528 | ||||||||||||||
Contingent Payments | 15 | — | 156 | ||||||||||||||
Decommissioning Liabilities | 16 | 4,155 | 3,559 | ||||||||||||||
Other Liabilities | 17 | 1,183 | 1,042 | ||||||||||||||
Deferred Income Taxes | 4,188 | 4,283 | |||||||||||||||
Total Liabilities | 25,203 | 28,280 | |||||||||||||||
Shareholders’ Equity | 28,698 | 27,576 | |||||||||||||||
Non-Controlling Interest | 14 | 13 | |||||||||||||||
Total Liabilities and Equity | 53,915 | 55,869 | |||||||||||||||
Commitments and Contingencies | 25 | ||||||||||||||||
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
5 |
CONSOLIDATED STATEMENTS OF EQUITY (unaudited) |
Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Common Shares | Preferred Shares | Warrants |
Paid in
Surplus
|
Retained
Earnings
|
AOCI (1) |
Total | Non-Controlling Interest | ||||||||||||||||||||||||||||||||||||||||
(Note 18) |
(Note 18) |
(Note 18) |
(Note 19) |
||||||||||||||||||||||||||||||||||||||||||||
As at December 31, 2021 |
17,016 | 519 | 215 | 4,284 | 878 | 684 | 23,596 | 12 | |||||||||||||||||||||||||||||||||||||||
Net Earnings (Loss) | — | — | — | — | 6,450 | — | 6,450 | — | |||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax
|
— | — | — | — | — | 786 | 786 | — | |||||||||||||||||||||||||||||||||||||||
Total Comprehensive Income (Loss) | — | — | — | — | 6,450 | 786 | 7,236 | — | |||||||||||||||||||||||||||||||||||||||
Common Shares Issued Under Stock Option Plans
|
170 | — | — | (32) | — | — | 138 | — | |||||||||||||||||||||||||||||||||||||||
Purchase of Common Shares Under
NCIB (2)
|
(959) | — | — | (1,571) | — | — | (2,530) | — | |||||||||||||||||||||||||||||||||||||||
Warrants Exercised | 93 | — | (31) | — | — | — | 62 | — | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense
|
— | — | — | 10 | — | — | 10 | — | |||||||||||||||||||||||||||||||||||||||
Base Dividends on Common Shares | — | — | — | — | (682) | — | (682) | — | |||||||||||||||||||||||||||||||||||||||
Variable Dividends on Common Shares
|
— | — | — | — | (219) | — | (219) | — | |||||||||||||||||||||||||||||||||||||||
Dividends on Preferred Shares | — | — | — | — | (35) | — | (35) | — | |||||||||||||||||||||||||||||||||||||||
Non-Controlling Interest | — | — | — | — | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||||
As at December 31, 2022 |
16,320 | 519 | 184 | 2,691 | 6,392 | 1,470 | 27,576 | 13 | |||||||||||||||||||||||||||||||||||||||
Net Earnings (Loss) | — | — | — | — | 4,109 | — | 4,109 | — | |||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax
|
— | — | — | — | — | (262) | (262) | — | |||||||||||||||||||||||||||||||||||||||
Total Comprehensive Income (Loss) | — | — | — | — | 4,109 | (262) | 3,847 | — | |||||||||||||||||||||||||||||||||||||||
Common Shares Issued Under Stock Option Plans
|
58 | — | — | (12) | — | — | 46 | — | |||||||||||||||||||||||||||||||||||||||
Purchase of Common Shares Under
NCIB (2)
|
(373) | — | — | (688) | — | — | (1,061) | — | |||||||||||||||||||||||||||||||||||||||
Warrants Exercised | 26 | — | (8) | — | — | — | 18 | — | |||||||||||||||||||||||||||||||||||||||
Warrants Purchased and Cancelled | — | — | (151) | — | (562) | — | (713) | — | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense
|
— | — | — | 11 | — | — | 11 | — | |||||||||||||||||||||||||||||||||||||||
Base Dividends on Common Shares | — | — | — | — | (990) | — | (990) | — | |||||||||||||||||||||||||||||||||||||||
Dividends on Preferred Shares | — | — | — | — | (36) | — | (36) | — | |||||||||||||||||||||||||||||||||||||||
Non-Controlling Interest | — | — | — | — | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||||
As at December 31, 2023 |
16,031 | 519 | 25 | 2,002 | 8,913 | 1,208 | 28,698 | 14 | |||||||||||||||||||||||||||||||||||||||
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
6 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
Three Months Ended | Twelve Months Ended |
|||||||||||||||||||||||||
Notes | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Operating Activities | ||||||||||||||||||||||||||
Net Earnings (Loss) | 743 | 784 | 4,109 | 6,450 | ||||||||||||||||||||||
Depreciation, Depletion and Amortization | 6,10,11,13 |
1,270 | 1,470 | 4,644 | 4,679 | |||||||||||||||||||||
Deferred Income Tax Expense (Recovery) | 7 | 166 | 17 | (250) | 642 | |||||||||||||||||||||
Unrealized (Gain) Loss on Risk Management | 22 | (36) | (38) | 52 | (126) | |||||||||||||||||||||
Unrealized Foreign Exchange (Gain) Loss | 5 | (111) | (54) | (210) | 365 | |||||||||||||||||||||
Realized Foreign Exchange (Gain) Loss on Non-Operating Items |
— | — | 98 | 146 | ||||||||||||||||||||||
Revaluation (Gain) Loss | 3 | 1 | — | 34 | (549) | |||||||||||||||||||||
Re-measurement of Contingent Payments | (24) | 20 | 59 | (469) | ||||||||||||||||||||||
(Gain) Loss on Divestiture of Assets | (3) | (25) | (14) | (269) | ||||||||||||||||||||||
Unwinding of Discount on Decommissioning Liabilities | 16 | 55 | 44 | 220 | 176 | |||||||||||||||||||||
(Income) Loss From Equity-Accounted Affiliates | 12 | (28) | (4) | (51) | (15) | |||||||||||||||||||||
Distributions Received From Equity-Accounted Affiliates | 12 | 32 | 11 | 149 | 65 | |||||||||||||||||||||
Other | (3) | 121 | (37) | (117) | ||||||||||||||||||||||
Settlement of Decommissioning Liabilities | 16 | (65) | (49) | (222) | (150) | |||||||||||||||||||||
Net Change in Non-Cash Working Capital | 24 | 949 | 673 | (1,193) | 575 | |||||||||||||||||||||
Cash From (Used in) Operating Activities | 2,946 | 2,970 | 7,388 | 11,403 | ||||||||||||||||||||||
Investing Activities | ||||||||||||||||||||||||||
Acquisitions, Net of Cash Acquired | 3 | (14) | (7) | (515) | (397) | |||||||||||||||||||||
Capital Investment | 1 | (1,170) | (1,274) | (4,298) | (3,708) | |||||||||||||||||||||
Proceeds From Divestitures | — | 45 | 12 | 1,514 | ||||||||||||||||||||||
Payment on Divestiture of Assets | — | — | — | (50) | ||||||||||||||||||||||
Net Change in Investments and Other | (24) | (26) | (125) | (211) | ||||||||||||||||||||||
Net Change in Non-Cash Working Capital | 24 | (72) | 92 | (369) | 538 | |||||||||||||||||||||
Cash From (Used in) Investing Activities | (1,280) | (1,170) | (5,295) | (2,314) | ||||||||||||||||||||||
Net Cash Provided (Used) Before Financing Activities | 1,666 | 1,800 | 2,093 | 9,089 | ||||||||||||||||||||||
Financing Activities | 24 | |||||||||||||||||||||||||
Net Issuance (Repayment) of Short-Term Borrowings | 159 | 115 | 58 | 34 | ||||||||||||||||||||||
Repayment of Long-Term Debt |
14 |
— | — | (1,346) | (4,149) | |||||||||||||||||||||
Principal Repayment of Leases | 11 | (72) | (74) | (288) | (302) | |||||||||||||||||||||
Common Shares Issued Under Stock Option Plans | 3 | 5 | 46 | 138 | ||||||||||||||||||||||
Purchase of Common Shares Under NCIB | 18 | (350) | (387) | (1,061) | (2,530) | |||||||||||||||||||||
Payment for Purchase of Warrants | 18 | (111) | — | (711) | — | |||||||||||||||||||||
Proceeds From Exercise of Warrants | 2 | 11 | 18 | 62 | ||||||||||||||||||||||
Base Dividends Paid on Common Shares | 8 | (261) | (201) | (990) | (682) | |||||||||||||||||||||
Variable Dividends Paid on Common Shares | 8 | — | (219) | — | (219) | |||||||||||||||||||||
Dividends Paid on Preferred Shares | 8 | (9) | — | (36) | (26) | |||||||||||||||||||||
Other | — | — | (3) | (2) | ||||||||||||||||||||||
Cash From (Used in) Financing Activities | (639) | (750) | (4,313) | (7,676) | ||||||||||||||||||||||
Effect of Foreign Exchange on Cash and Cash Equivalents |
(62) | (20) | (77) | 238 | ||||||||||||||||||||||
Increase (Decrease) in Cash and Cash Equivalents | 965 | 1,030 | (2,297) | 1,651 | ||||||||||||||||||||||
Cash and Cash Equivalents, Beginning of Period | 1,262 | 3,494 | 4,524 | 2,873 | ||||||||||||||||||||||
Cash and Cash Equivalents, End of Period | 2,227 | 4,524 | 2,227 | 4,524 | ||||||||||||||||||||||
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
7 |
1. DESCRIPTION OF BUSINESS AND SEGMENTED DISCLOSURES |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
8 |
Upstream | |||||||||||||||||||||||||||||||||||||||||||||||
For the three months ended | Oil Sands |
Conventional |
Offshore | Total | |||||||||||||||||||||||||||||||||||||||||||
December 31, | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
Gross Sales (1) |
6,477 | 6,653 | 806 | 1,153 | 514 | 445 | 7,797 | 8,251 | |||||||||||||||||||||||||||||||||||||||
Less: Royalties |
841 | 784 | 27 | 70 | 34 | 21 | 902 | 875 | |||||||||||||||||||||||||||||||||||||||
5,636 | 5,869 | 779 | 1,083 | 480 | 424 | 6,895 | 7,376 | ||||||||||||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Purchased Product (1) |
226 | 516 | 437 | 563 | — | — | 663 | 1,079 | |||||||||||||||||||||||||||||||||||||||
Transportation and Blending (1) |
2,809 | 2,922 | 78 | 59 | 7 | 3 | 2,894 | 2,984 | |||||||||||||||||||||||||||||||||||||||
Operating |
615 | 733 | 146 | 138 | 103 | 84 | 864 | 955 | |||||||||||||||||||||||||||||||||||||||
Realized (Gain) Loss on Risk Management |
24 | 59 | (5) | 75 | — | — | 19 | 134 | |||||||||||||||||||||||||||||||||||||||
Operating Margin | 1,962 | 1,639 | 123 | 248 | 370 | 337 | 2,455 | 2,224 | |||||||||||||||||||||||||||||||||||||||
Unrealized (Gain) Loss on Risk
Management
|
(29) | (9) | (5) | 6 | — | — | (34) | (3) | |||||||||||||||||||||||||||||||||||||||
Depreciation, Depletion and Amortization |
763 | 786 | 100 | 88 | 138 | 144 | 1,001 | 1,018 | |||||||||||||||||||||||||||||||||||||||
Exploration Expense | 15 | 2 | 6 | — | 11 | — | 32 | 2 | |||||||||||||||||||||||||||||||||||||||
(Income) Loss From Equity- Accounted Affiliates |
— | — | — | — | (28) | (4) | (28) | (4) | |||||||||||||||||||||||||||||||||||||||
Segment Income (Loss) | 1,213 | 860 | 22 | 154 | 249 | 197 | 1,484 | 1,211 |
Downstream | |||||||||||||||||||||||||||||||||||
Canadian Refining |
U.S. Refining |
Total | |||||||||||||||||||||||||||||||||
For the three months ended December 31, |
2023 | 2022 |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||
Gross Sales (1) |
1,557 | 1,772 | 6,847 | 6,530 | 8,404 | 8,302 | |||||||||||||||||||||||||||||
Less: Royalties |
— | — | — | — | — | — | |||||||||||||||||||||||||||||
1,557 | 1,772 | 6,847 | 6,530 | 8,404 | 8,302 | ||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||
Purchased Product (1) |
1,263 | 1,324 | 6,625 | 5,669 | 7,888 | 6,993 | |||||||||||||||||||||||||||||
Transportation and Blending |
— | — | — | — | — | — | |||||||||||||||||||||||||||||
Operating |
168 | 170 | 658 | 589 | 826 | 759 | |||||||||||||||||||||||||||||
Realized (Gain) Loss on Risk Management | — | — | (6) | (8) | (6) | (8) | |||||||||||||||||||||||||||||
Operating Margin | 126 | 278 | (430) | 280 | (304) | 558 | |||||||||||||||||||||||||||||
Unrealized (Gain) Loss on Risk Management |
— | — | (4) | 40 | (4) | 40 | |||||||||||||||||||||||||||||
Depreciation, Depletion and Amortization | 49 | 44 | 172 | 381 | 221 | 425 | |||||||||||||||||||||||||||||
Exploration Expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||
(Income) Loss From Equity-Accounted Affiliates | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Segment Income (Loss) | 77 | 234 | (598) | (141) | (521) | 93 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
9 |
Corporate and Eliminations | Consolidated | ||||||||||||||||||||||
For the three months ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
Gross Sales (1) |
(2,165) | (1,615) | 14,036 | 14,938 | |||||||||||||||||||
Less: Royalties |
— | — | 902 | 875 | |||||||||||||||||||
(2,165) | (1,615) | 13,134 | 14,063 | ||||||||||||||||||||
Expenses | |||||||||||||||||||||||
Purchased Product (1) |
(1,993) | (1,152) | 6,558 | 6,920 | |||||||||||||||||||
Transportation and Blending (1) |
(232) | (264) | 2,662 | 2,720 | |||||||||||||||||||
Operating (1) |
(127) | (258) | 1,563 | 1,456 | |||||||||||||||||||
Realized (Gain) Loss on Risk Management | (5) | 8 | 8 | 134 | |||||||||||||||||||
Unrealized (Gain) Loss on Risk Management |
2 | (75) | (36) | (38) | |||||||||||||||||||
Depreciation, Depletion and Amortization | 48 | 27 | 1,270 | 1,470 | |||||||||||||||||||
Exploration Expense | — | — | 32 | 2 | |||||||||||||||||||
(Income) Loss From Equity-Accounted Affiliates | — | — | (28) | (4) | |||||||||||||||||||
Segment Income (Loss) | 142 | 99 | 1,105 | 1,403 | |||||||||||||||||||
General and Administrative | 71 | 320 | 71 | 320 | |||||||||||||||||||
Finance Costs | 178 | 189 | 178 | 189 | |||||||||||||||||||
Interest Income | (33) | (37) | (33) | (37) | |||||||||||||||||||
Integration, Transaction and Other Costs | 36 | 27 | 36 | 27 | |||||||||||||||||||
Foreign Exchange (Gain) Loss, Net | (74) | (63) | (74) | (63) | |||||||||||||||||||
Revaluation (Gain) Loss | 1 | — | 1 | — | |||||||||||||||||||
Re-measurement of Contingent Payments | (24) | 20 | (24) | 20 | |||||||||||||||||||
(Gain) Loss on Divestiture of Assets | (3) | (25) | (3) | (25) | |||||||||||||||||||
Other (Income) Loss, Net | (21) | (65) | (21) | (65) | |||||||||||||||||||
131 | 366 | 131 | 366 | ||||||||||||||||||||
Earnings (Loss) Before Income Tax | 974 | 1,037 | |||||||||||||||||||||
Income Tax Expense (Recovery) | 231 | 253 | |||||||||||||||||||||
Net Earnings (Loss) | 743 | 784 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
10 |
Upstream | |||||||||||||||||||||||||||||||||||||||||||||||
For the twelve months ended |
Oil Sands | Conventional | Offshore | Total | |||||||||||||||||||||||||||||||||||||||||||
December 31, |
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
Gross Sales (1) |
26,192 | 34,683 | 3,273 | 4,439 | 1,617 | 2,020 | 31,082 | 41,142 | |||||||||||||||||||||||||||||||||||||||
Less: Royalties |
3,059 | 4,493 | 112 | 298 | 99 | 77 | 3,270 | 4,868 | |||||||||||||||||||||||||||||||||||||||
23,133 | 30,190 | 3,161 | 4,141 | 1,518 | 1,943 | 27,812 | 36,274 | ||||||||||||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Purchased Product (1) |
1,457 | 4,718 | 1,695 | 2,023 | — | — | 3,152 | 6,741 | |||||||||||||||||||||||||||||||||||||||
Transportation and Blending (1) |
10,774 | 12,036 | 298 | 250 | 16 | 15 | 11,088 | 12,301 | |||||||||||||||||||||||||||||||||||||||
Operating |
2,716 | 2,930 | 590 | 541 | 384 | 318 | 3,690 | 3,789 | |||||||||||||||||||||||||||||||||||||||
Realized (Gain) Loss on Risk Management |
17 | 1,527 | (5) | 92 | — | — | 12 | 1,619 | |||||||||||||||||||||||||||||||||||||||
Operating Margin | 8,169 | 8,979 | 583 | 1,235 | 1,118 | 1,610 | 9,870 | 11,824 | |||||||||||||||||||||||||||||||||||||||
Unrealized (Gain) Loss on Risk
Management
|
15 | (68) | (19) | 13 | — | — | (4) | (55) | |||||||||||||||||||||||||||||||||||||||
Depreciation, Depletion and Amortization |
2,993 | 2,763 | 386 | 370 | 487 | 585 | 3,866 | 3,718 | |||||||||||||||||||||||||||||||||||||||
Exploration Expense | 19 | 9 | 6 | 1 | 17 | 91 | 42 | 101 | |||||||||||||||||||||||||||||||||||||||
(Income) Loss From Equity- Accounted Affiliates |
6 | 8 | — | — | (57) | (23) | (51) | (15) | |||||||||||||||||||||||||||||||||||||||
Segment Income (Loss) | 5,136 | 6,267 | 210 | 851 | 671 | 957 | 6,017 | 8,075 |
Downstream | |||||||||||||||||||||||||||||||||||
Canadian Refining |
U.S. Refining |
Total | |||||||||||||||||||||||||||||||||
For the twelve months ended December 31, |
2023 | 2022 |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||
Gross Sales (1) |
6,233 | 7,792 | 26,393 | 30,218 | 32,626 | 38,010 | |||||||||||||||||||||||||||||
Less: Royalties |
— | — | — | — | — | — | |||||||||||||||||||||||||||||
6,233 | 7,792 | 26,393 | 30,218 | 32,626 | 38,010 | ||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||
Purchased Product (1) |
4,919 | 6,389 | 23,354 | 26,020 | 28,273 | 32,409 | |||||||||||||||||||||||||||||
Transportation and Blending |
— | — | — | — | — | — | |||||||||||||||||||||||||||||
Operating |
639 | 704 | 2,562 | 2,346 | 3,201 | 3,050 | |||||||||||||||||||||||||||||
Realized (Gain) Loss on Risk Management | — | — | — | 112 | — | 112 | |||||||||||||||||||||||||||||
Operating Margin | 675 | 699 | 477 | 1,740 | 1,152 | 2,439 | |||||||||||||||||||||||||||||
Unrealized (Gain) Loss on Risk Management |
— | — | (17) | 18 | (17) | 18 | |||||||||||||||||||||||||||||
Depreciation, Depletion and Amortization | 185 | 208 | 486 | 640 | 671 | 848 | |||||||||||||||||||||||||||||
Exploration Expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||
(Income) Loss From Equity-Accounted Affiliates | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Segment Income (Loss) | 490 | 491 | 8 | 1,082 | 498 | 1,573 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
11 |
Corporate and Eliminations | Consolidated | ||||||||||||||||||||||
For the twelve months ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
Gross Sales (1) |
(8,234) | (7,387) | 55,474 | 71,765 | |||||||||||||||||||
Less: Royalties |
— | — | 3,270 | 4,868 | |||||||||||||||||||
(8,234) | (7,387) | 52,204 | 66,897 | ||||||||||||||||||||
Expenses | |||||||||||||||||||||||
Purchased Product (1) |
(6,710) | (5,192) | 24,715 | 33,958 | |||||||||||||||||||
Transportation and Blending (1) |
(947) | (1,175) | 10,141 | 11,126 | |||||||||||||||||||
Operating (1) |
(539) | (1,023) | 6,352 | 5,816 | |||||||||||||||||||
Realized (Gain) Loss on Risk Management | (3) | 31 | 9 | 1,762 | |||||||||||||||||||
Unrealized (Gain) Loss on Risk Management |
73 | (89) | 52 | (126) | |||||||||||||||||||
Depreciation, Depletion and Amortization | 107 | 113 | 4,644 | 4,679 | |||||||||||||||||||
Exploration Expense | — | — | 42 | 101 | |||||||||||||||||||
(Income) Loss From Equity-Accounted Affiliates | — | — | (51) | (15) | |||||||||||||||||||
Segment Income (Loss) | (215) | (52) | 6,300 | 9,596 | |||||||||||||||||||
General and Administrative | 688 | 865 | 688 | 865 | |||||||||||||||||||
Finance Costs | 671 | 820 | 671 | 820 | |||||||||||||||||||
Interest Income | (133) | (81) | (133) | (81) | |||||||||||||||||||
Integration, Transaction and Other Costs | 85 | 106 | 85 | 106 | |||||||||||||||||||
Foreign Exchange (Gain) Loss, Net | (67) | 343 | (67) | 343 | |||||||||||||||||||
Revaluation (Gain) Loss | 34 | (549) | 34 | (549) | |||||||||||||||||||
Re-measurement of Contingent Payments | 59 | 162 | 59 | 162 | |||||||||||||||||||
(Gain) Loss on Divestiture of Assets | (14) | (269) | (14) | (269) | |||||||||||||||||||
Other (Income) Loss, Net | (63) | (532) | (63) | (532) | |||||||||||||||||||
1,260 | 865 | 1,260 | 865 | ||||||||||||||||||||
Earnings (Loss) Before Income Tax | 5,040 | 8,731 | |||||||||||||||||||||
Income Tax Expense (Recovery) | 931 | 2,281 | |||||||||||||||||||||
Net Earnings (Loss) | 4,109 | 6,450 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
12 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Upstream | |||||||||||||||||||||||
Oil Sands | |||||||||||||||||||||||
Crude Oil (1) |
5,510 | 5,622 | 22,550 | 28,921 | |||||||||||||||||||
NGLs (2) |
55 | 169 | 352 | 877 | |||||||||||||||||||
Natural Gas and Other |
71 | 78 | 231 | 392 | |||||||||||||||||||
Conventional | |||||||||||||||||||||||
Crude Oil | 179 | 81 | 589 | 429 | |||||||||||||||||||
NGLs (2) |
208 | 220 | 799 | 926 | |||||||||||||||||||
Natural Gas and Other (1) |
392 | 782 | 1,773 | 2,786 | |||||||||||||||||||
Offshore | |||||||||||||||||||||||
Crude Oil | 164 | 85 | 385 | 581 | |||||||||||||||||||
NGLs | 80 | 84 | 280 | 354 | |||||||||||||||||||
Natural Gas | 236 | 255 | 853 | 1,008 | |||||||||||||||||||
Total Upstream | 6,895 | 7,376 | 27,812 | 36,274 | |||||||||||||||||||
Downstream | |||||||||||||||||||||||
Canadian Refining |
|||||||||||||||||||||||
Synthetic Crude Oil | 517 | 574 | 2,124 | 2,360 | |||||||||||||||||||
Diesel | 466 | 620 | 1,752 | 2,164 | |||||||||||||||||||
Asphalt | 140 | 138 | 571 | 620 | |||||||||||||||||||
Gasoline | 112 | 111 | 522 | 948 | |||||||||||||||||||
Other Products and Services | 322 | 329 | 1,264 | 1,700 | |||||||||||||||||||
U.S. Refining |
|||||||||||||||||||||||
Gasoline | 3,039 | 2,936 | 12,375 | 14,116 | |||||||||||||||||||
Distillates | 2,443 | 2,918 | 9,612 | 11,453 | |||||||||||||||||||
Asphalt |
254 | 131 | 864 | 533 | |||||||||||||||||||
Other Products (1) |
1,111 | 545 | 3,542 | 4,116 | |||||||||||||||||||
Total Downstream | 8,404 | 8,302 | 32,626 | 38,010 | |||||||||||||||||||
Corporate and Eliminations (1) |
(2,165) | (1,615) | (8,234) | (7,387) | |||||||||||||||||||
Consolidated | 13,134 | 14,063 | 52,204 | 66,897 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
13 |
Revenues (1) |
|||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Canada (2) |
6,300 | 6,843 | 25,128 | 33,314 | |||||||||||||||||||
United States (2) |
6,518 | 6,881 | 25,943 | 32,221 | |||||||||||||||||||
China | 316 | 339 | 1,133 | 1,362 | |||||||||||||||||||
Consolidated | 13,134 | 14,063 | 52,204 | 66,897 |
Non-Current Assets (1) |
|||||||||||
As at December 31, |
2023 | 2022 |
|||||||||
Canada | 35,876 | 35,194 | |||||||||
United States | 5,230 | 4,824 | |||||||||
China | 1,608 | 2,064 | |||||||||
Indonesia | 344 | 365 | |||||||||
Consolidated | 43,058 | 42,447 |
E&E Assets | PP&E | ROU Assets | |||||||||||||||||||||||||||||||||
As at December 31, |
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||
Oil Sands | 729 | 674 | 24,443 | 24,657 | 849 | 638 | |||||||||||||||||||||||||||||
Conventional | — | 6 | 2,209 | 2,020 | 1 | 2 | |||||||||||||||||||||||||||||
Offshore | 9 | 5 | 2,798 | 2,549 | 102 | 152 | |||||||||||||||||||||||||||||
Canadian Refining | — | — | 2,469 | 2,466 | 28 | 252 | |||||||||||||||||||||||||||||
U.S. Refining | — | — | 5,014 | 4,482 | 268 | 329 | |||||||||||||||||||||||||||||
Corporate and Eliminations | — | — | 317 | 325 | 432 | 472 | |||||||||||||||||||||||||||||
Consolidated | 738 | 685 | 37,250 | 36,499 | 1,680 | 1,845 |
Goodwill | Total Assets | ||||||||||||||||||||||
As at December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Oil Sands | 2,923 | 2,923 | 31,673 | 32,248 | |||||||||||||||||||
Conventional | — | — | 2,429 | 2,410 | |||||||||||||||||||
Offshore | — | — | 3,511 | 3,339 | |||||||||||||||||||
Canadian Refining | — | — | 2,960 | 3,172 | |||||||||||||||||||
U.S. Refining | — | — | 8,660 | 8,324 | |||||||||||||||||||
Corporate and Eliminations |
— | — | 4,682 | 6,376 | |||||||||||||||||||
Consolidated | 2,923 | 2,923 | 53,915 | 55,869 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
14 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Capital Investment | |||||||||||||||||||||||
Oil Sands | 618 | 681 | 2,382 | 1,792 | |||||||||||||||||||
Conventional | 129 | 156 | 452 | 344 | |||||||||||||||||||
Offshore | |||||||||||||||||||||||
Asia Pacific | 3 | 3 | 7 | 8 | |||||||||||||||||||
Atlantic | 161 | 82 | 635 | 302 | |||||||||||||||||||
Total Upstream | 911 | 922 | 3,476 | 2,446 | |||||||||||||||||||
Canadian Refining |
46 | 40 | 145 | 117 | |||||||||||||||||||
U.S. Refining |
167 | 285 | 602 | 1,059 | |||||||||||||||||||
Total Downstream | 213 | 325 | 747 | 1,176 | |||||||||||||||||||
Corporate and Eliminations | 46 | 27 | 75 | 86 | |||||||||||||||||||
1,170 | 1,274 | 4,298 | 3,708 | ||||||||||||||||||||
Acquisitions (Note 3) |
|||||||||||||||||||||||
Oil Sands |
2 | — | 37 | 1,609 | |||||||||||||||||||
Conventional | — | 6 | 5 | 12 | |||||||||||||||||||
U.S. Refining (2) |
— | — | 385 | — | |||||||||||||||||||
2 | 6 | 427 | 1,621 | ||||||||||||||||||||
Total Capital Expenditures | 1,172 | 1,280 | 4,725 | 5,329 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
15 |
2. BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE |
3. ACQUISITIONS |
As at | February 28, 2023 | |||||||
100 Percent of the Identifiable Assets Acquired and Liabilities Assumed | ||||||||
Cash | 69 | |||||||
Accounts Receivable and Accrued Revenues | 3 | |||||||
Inventories | 387 | |||||||
Property, Plant and Equipment | 770 | |||||||
Right-of-Use Assets | 33 | |||||||
Other Assets | 10 | |||||||
Accounts Payable and Accrued Liabilities | (139) | |||||||
Lease Liabilities | (33) | |||||||
Decommissioning Liabilities | (5) | |||||||
Other Liabilities | (73) | |||||||
Total Identifiable Net Assets | 1,022 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
16 |
As at | February 28, 2023 | |||||||
Total Purchase Consideration | 514 | |||||||
Fair Value of Pre-Existing 50 Percent Ownership Interest in Toledo |
508 | |||||||
Fair Value of Identifiable Net Assets | (1,022) | |||||||
Goodwill | — |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
17 |
4. FINANCE COSTS |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Interest Expense – Short-Term Borrowings and Long-Term Debt | 77 | 97 | 362 | 478 | |||||||||||||||||||||||||||||||||||||
Net Premium (Discount) on Redemption of Long-Term Debt (1) |
— | — | (84) | (29) | |||||||||||||||||||||||||||||||||||||
Interest Expense – Lease Liabilities (Note 11) |
40 | 40 | 161 | 163 | |||||||||||||||||||||||||||||||||||||
Unwinding of Discount on Decommissioning Liabilities (Note 16) |
55 | 44 | 220 | 176 | |||||||||||||||||||||||||||||||||||||
Other | 14 | 10 | 32 | 37 | |||||||||||||||||||||||||||||||||||||
186 | 191 | 691 | 825 | ||||||||||||||||||||||||||||||||||||||
Capitalized Interest | (8) | (2) | (20) | (5) | |||||||||||||||||||||||||||||||||||||
178 | 189 | 671 | 820 |
5. FOREIGN EXCHANGE (GAIN) LOSS, NET |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Unrealized Foreign Exchange (Gain) Loss on Translation of: | |||||||||||||||||||||||||||||||||||||||||
U.S. Dollar Debt Issued From Canada | (112) | (79) | (231) | 365 | |||||||||||||||||||||||||||||||||||||
Other | 1 | 25 | 21 | — | |||||||||||||||||||||||||||||||||||||
Unrealized Foreign Exchange (Gain) Loss | (111) | (54) | (210) | 365 | |||||||||||||||||||||||||||||||||||||
Realized Foreign Exchange (Gain) Loss | 37 | (9) | 143 | (22) | |||||||||||||||||||||||||||||||||||||
(74) | (63) | (67) | 343 |
6. IMPAIRMENT CHARGES AND REVERSALS |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
18 |
2024 | 2025 | 2026 | 2027 | 2028 | Average Annual Increase Thereafter | ||||||||||||||||||||||||||||||
West Texas Intermediate (“WTI”) (US$/bbl) (1) |
73.67 | 74.98 | 76.14 | 77.66 | 79.22 | 2.00 | % | ||||||||||||||||||||||||||||
Western Canadian Select at Hardisty (2) (C$/bbl) |
76.74 | 79.77 | 81.12 | 82.88 | 85.04 | 2.00 | % | ||||||||||||||||||||||||||||
Condensate at Edmonton (C$/bbl) |
96.79 | 98.75 | 100.71 | 102.72 | 104.78 | 2.00 | % | ||||||||||||||||||||||||||||
Alberta Energy Company Natural Gas (C$/Mcf) (3) |
2.20 | 3.37 | 4.05 | 4.13 | 4.21 | 2.00 | % |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
19 |
(US$/barrel) | 2023 | 2024 | 2025 | 2026 | 2027 | ||||||||||||||||||||||||
WTI | 80.33 | 78.50 | 76.95 | 77.61 | 79.16 | ||||||||||||||||||||||||
Differential WTI – WTS (1) |
(0.56) | (0.56) | (0.56) | (0.56) | (0.56) | ||||||||||||||||||||||||
Differential WTI – WCS | (23.32) | (19.09) | (17.42) | (15.87) | (15.74) | ||||||||||||||||||||||||
Chicago 3-2-1 Crack Spread | 29.37 | 24.10 | 22.12 | 21.70 | 21.67 | ||||||||||||||||||||||||
7. INCOME TAXES |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Current Tax | |||||||||||||||||||||||
Canada | 100 | 128 | 1,041 | 1,252 | |||||||||||||||||||
United States | (113) | 8 | (109) | 104 | |||||||||||||||||||
Asia Pacific | 72 | 89 | 224 | 262 | |||||||||||||||||||
Other International | 6 | 11 | 25 | 21 | |||||||||||||||||||
Total Current Tax Expense (Recovery) | 65 | 236 | 1,181 | 1,639 | |||||||||||||||||||
Deferred Tax Expense (Recovery) | 166 | 17 | (250) | 642 | |||||||||||||||||||
231 | 253 | 931 | 2,281 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
20 |
8. PER SHARE AMOUNTS |
Three Months Ended | Twelve Months Ended |
||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net Earnings (Loss) | 743 | 784 | 4,109 | 6,450 | |||||||||||||||||||
Effect of Cumulative Dividends on Preferred Shares | (9) | (9) | (36) | (35) | |||||||||||||||||||
Net Earnings (Loss) – Basic and Diluted | 734 | 775 | 4,073 | 6,415 | |||||||||||||||||||
Basic – Weighted Average Number of Shares (thousands) |
1,879,270 | 1,916,985 | 1,895,487 | 1,951,262 | |||||||||||||||||||
Dilutive Effect of Warrants | 5,837 | 42,778 | 22,223 | 44,845 | |||||||||||||||||||
Dilutive Effect of Net Settlement Rights | 5,340 | 7,359 | 7,150 | 10,045 | |||||||||||||||||||
Dilutive Effect of Cenovus Replacement Stock Options | 583 | — | 580 | — | |||||||||||||||||||
Diluted – Weighted Average Number of Shares (thousands) |
1,891,030 | 1,967,122 | 1,925,440 | 2,006,152 | |||||||||||||||||||
Net Earnings (Loss) Per Common Share – Basic ($) |
0.39 | 0.40 | 2.15 | 3.29 | |||||||||||||||||||
Net Earnings (Loss) Per Common Share – Diluted (1) (2) ($) |
0.39 | 0.39 | 2.12 | 3.20 |
2023 | 2022 | ||||||||||||||||||||||
For the twelve months ended December 31, |
Per Share | Amount | Per Share | Amount | |||||||||||||||||||
Base Dividends | 0.525 | 990 | 0.350 | 682 | |||||||||||||||||||
Variable Dividends | — | — | 0.114 | 219 | |||||||||||||||||||
Total Common Share Dividends Declared and Paid | 0.525 | 990 | 0.464 | 901 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Series 1 First Preferred Shares | 2 | 2 | 7 | 7 | |||||||||||||||||||
Series 2 First Preferred Shares | — | — | 2 | 1 | |||||||||||||||||||
Series 3 First Preferred Shares | 3 | 3 | 12 | 12 | |||||||||||||||||||
Series 5 First Preferred Shares | 2 | 2 | 9 | 9 | |||||||||||||||||||
Series 7 First Preferred Shares | 2 | 2 | 6 | 6 | |||||||||||||||||||
Total Preferred Share Dividends Declared | 9 | 9 | 36 | 35 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
21 |
9. EXPLORATION AND EVALUATION ASSETS, NET |
Total | |||||
As at December 31, 2022 |
685 | ||||
Acquisition | 31 | ||||
Additions | 84 | ||||
Transfer to PP&E (Note 10) |
(60) | ||||
Write-downs (1) |
(29) | ||||
Change in Decommissioning Liabilities | 28 | ||||
Exchange Rate Movements and Other |
(1) | ||||
As at December 31, 2023 |
738 |
10. PROPERTY, PLANT AND EQUIPMENT, NET |
Crude Oil and Natural Gas Properties | Processing, Transportation and Storage Assets | Refining Assets |
Other Assets (1) |
Total | |||||||||||||||||||||||||
COST | |||||||||||||||||||||||||||||
As at December 31, 2022 |
43,528 | 254 | 12,132 | 1,825 | 57,739 | ||||||||||||||||||||||||
Acquisitions (Note 3) (2) |
11 | — | 770 | — | 781 | ||||||||||||||||||||||||
Additions | 3,392 | 14 | 719 | 89 | 4,214 | ||||||||||||||||||||||||
Transfer from E&E (Note 9) |
60 | — | — | — | 60 | ||||||||||||||||||||||||
Change in Decommissioning Liabilities | 542 | — | 21 | 18 | 581 | ||||||||||||||||||||||||
Divestitures (Note 3) (2) |
(17) | — | (633) | (17) | (667) | ||||||||||||||||||||||||
Exchange Rate Movements and Other | (91) | 4 | (239) | (7) | (333) | ||||||||||||||||||||||||
As at December 31, 2023 |
47,425 | 272 | 12,770 | 1,908 | 62,375 | ||||||||||||||||||||||||
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION | |||||||||||||||||||||||||||||
As at December 31, 2022 |
14,302 | 106 | 5,547 | 1,285 | 21,240 | ||||||||||||||||||||||||
Depreciation, Depletion and Amortization (3) |
3,692 | 19 | 554 | 86 | 4,351 | ||||||||||||||||||||||||
Divestitures (Note 3) (2) |
(8) | — | (299) | (12) | (319) | ||||||||||||||||||||||||
Exchange Rate Movements and Other | (11) | 4 | (135) | (5) | (147) | ||||||||||||||||||||||||
As at December 31, 2023 |
17,975 | 129 | 5,667 | 1,354 | 25,125 | ||||||||||||||||||||||||
CARRYING VALUE | |||||||||||||||||||||||||||||
As at December 31, 2022 |
29,226 | 148 | 6,585 | 540 | 36,499 | ||||||||||||||||||||||||
As at December 31, 2023 |
29,450 | 143 | 7,103 | 554 | 37,250 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
22 |
11. LEASES |
Real Estate | Transportation and Storage Assets (1) |
Refining Assets |
Other Assets (2)
|
Total | |||||||||||||||||||||||||
COST | |||||||||||||||||||||||||||||
As at December 31, 2022 |
599 | 1,840 | 174 | 74 | 2,687 | ||||||||||||||||||||||||
Acquisitions (Note 3) (3) |
1 | 24 | 8 | — | 33 | ||||||||||||||||||||||||
Additions | 1 | 56 | — | — | 57 | ||||||||||||||||||||||||
Divestitures (Note 3) (3) |
— | — | (19) | — | (19) | ||||||||||||||||||||||||
Exchange Rate Movements and Other | (13) | 44 | (2) | (4) | 25 | ||||||||||||||||||||||||
As at December 31, 2023 |
588 | 1,964 | 161 | 70 | 2,783 | ||||||||||||||||||||||||
ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||
As at December 31, 2022 |
127 | 645 | 58 | 12 | 842 | ||||||||||||||||||||||||
Depreciation | 36 | 223 | 22 | 12 | 293 | ||||||||||||||||||||||||
Divestitures (Note 3) (3) |
— | — | (12) | — | (12) | ||||||||||||||||||||||||
Exchange Rate Movements and Other | (7) | (5) | (3) | (5) | (20) | ||||||||||||||||||||||||
As at December 31, 2023 |
156 | 863 | 65 | 19 | 1,103 | ||||||||||||||||||||||||
CARRYING VALUE | |||||||||||||||||||||||||||||
As at December 31, 2022 |
472 | 1,195 | 116 | 62 | 1,845 | ||||||||||||||||||||||||
As at December 31, 2023 |
432 | 1,101 | 96 | 51 | 1,680 |
Total | |||||
As at December 31, 2022 |
2,836 | ||||
Acquisitions (Note 3) (1) |
33 | ||||
Additions | 57 | ||||
Interest Expense (Note 4) |
161 | ||||
Lease Payments | (449) | ||||
Divestitures (Note 3) (1) |
(11) | ||||
Exchange Rate Movements and Other | 31 | ||||
As at December 31, 2023 |
2,658 | ||||
Less: Current Portion | 299 | ||||
Long-Term Portion | 2,359 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
23 |
12. JOINT ARRANGEMENTS |
Twelve Months Ended | |||||||||||
For the periods ended December 31, |
2023 | 2022 | |||||||||
Revenue | 615 | 383 | |||||||||
Expenses | 545 | 350 | |||||||||
Net Earnings (Loss) | 70 | 33 |
As at December 31, |
2023 | 2022 | |||||||||
Current Assets (1) |
334 | 247 | |||||||||
Non-Current Assets | 1,751 | 1,926 | |||||||||
Current Liabilities | 140 | 160 | |||||||||
Non-Current Liabilities |
1,188 | 1,293 | |||||||||
Net Assets | 757 | 720 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
24 |
For the years ended December 31, |
2023 | 2022 | |||||||||
HMLP Net Earnings (Loss) |
231 | 190 | |||||||||
Cenovus’s Share of HMLP Net Earnings (Loss) (1) |
(1) | (23) | |||||||||
Cenovus’s Share of HMLP Other Comprehensive Income (Loss) (1) |
(2) | 8 | |||||||||
Distributions Received | 56 | 23 | |||||||||
Contributions Paid | 62 | 31 |
13. OTHER ASSETS |
As at December 31, |
2023 | 2022 | |||||||||
Private Equity Investments (Note 22) |
131 | 55 | |||||||||
Precious Metals | 76 | 86 | |||||||||
Net Investment in Finance Leases | 61 | 62 | |||||||||
Long-Term Receivables and Prepaids |
50 | 120 | |||||||||
Intangible Assets (1) |
— | 19 | |||||||||
318 | 342 |
14. DEBT AND CAPITAL STRUCTURE |
As at December 31, | Notes | 2023 | 2022 | ||||||||||||||
Uncommitted Demand Facilities | i | — | — | ||||||||||||||
WRB Uncommitted Demand Facilities | ii | 179 | 115 | ||||||||||||||
Total Debt Principal | 179 | 115 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
25 |
As at December 31, |
Notes | 2023 | 2022 | ||||||||||||||
Committed Credit Facility (1) |
i | — | — | ||||||||||||||
U.S. Dollar Denominated Unsecured Notes | ii | 5,028 | 6,537 | ||||||||||||||
Canadian Dollar Unsecured Notes | ii | 2,000 | 2,000 | ||||||||||||||
Total Debt Principal | 7,028 | 8,537 | |||||||||||||||
Debt Premiums (Discounts), Net, and Transaction Costs | 80 | 154 | |||||||||||||||
Long-Term Debt | 7,108 | 8,691 | |||||||||||||||
2023 | 2022 |
||||||||||||||||||||||
As at December 31, | US$ Principal | C$ Principal and Equivalent |
US$ Principal | C$ Principal and Equivalent |
|||||||||||||||||||
U.S. Dollar Unsecured Notes | |||||||||||||||||||||||
5.38% due July 15, 2025 |
133 | 176 | 133 | 181 | |||||||||||||||||||
4.25% due April 15, 2027 |
373 | 493 | 373 | 505 | |||||||||||||||||||
4.40% due April 15, 2029 |
183 | 241 | 240 | 324 | |||||||||||||||||||
2.65% due January 15, 2032 |
500 | 661 | 500 | 677 | |||||||||||||||||||
5.25% due June 15, 2037 |
333 | 441 | 583 | 790 | |||||||||||||||||||
6.80% due September 15, 2037 |
191 | 253 | 387 | 524 | |||||||||||||||||||
6.75% due November 15, 2039 |
652 | 862 | 935 | 1,267 | |||||||||||||||||||
4.45% due September 15, 2042 |
91 | 121 | 97 | 131 | |||||||||||||||||||
5.20% due September 15, 2043 |
27 | 36 | 29 | 39 | |||||||||||||||||||
5.40% due June 15, 2047 |
569 | 752 | 800 | 1,083 | |||||||||||||||||||
3.75% due February 15, 2052 |
750 | 992 | 750 | 1,016 | |||||||||||||||||||
3,802 | 5,028 | 4,827 | 6,537 | ||||||||||||||||||||
Canadian Dollar Unsecured Notes | |||||||||||||||||||||||
3.60% due March 10, 2027 |
750 | 750 | |||||||||||||||||||||
3.50% due February 7, 2028 |
1,250 | 1,250 | |||||||||||||||||||||
2,000 | 2,000 | ||||||||||||||||||||||
Total Unsecured Notes | 7,028 | 8,537 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
26 |
As at December 31, |
2023 | 2022 | |||||||||
Short-Term Borrowings | 179 | 115 | |||||||||
Current Portion of Long-Term Debt | — | — | |||||||||
Long-Term Portion of Long-Term Debt | 7,108 | 8,691 | |||||||||
Total Debt | 7,287 | 8,806 | |||||||||
Less: Cash and Cash Equivalents | (2,227) | (4,524) | |||||||||
Net Debt | 5,060 | 4,282 | |||||||||
Net Earnings (Loss) | 4,109 | 6,450 | |||||||||
Add (Deduct): | |||||||||||
Finance Costs | 671 | 820 | |||||||||
Interest Income | (133) | (81) | |||||||||
Income Tax Expense (Recovery) | 931 | 2,281 | |||||||||
Depreciation, Depletion and Amortization | 4,644 | 4,679 | |||||||||
Exploration and Evaluation Asset Write-downs | 29 | 64 | |||||||||
(Income) Loss From Equity-Accounted Affiliates | (51) | (15) | |||||||||
Unrealized (Gain) Loss on Risk Management | 52 | (126) | |||||||||
Foreign Exchange (Gain) Loss, Net | (67) | 343 | |||||||||
Revaluation (Gain) Loss | 34 | (549) | |||||||||
Re-measurement of Contingent Payments | 59 | 162 | |||||||||
(Gain) Loss on Divestiture of Assets | (14) | (269) | |||||||||
Other (Income) Loss, Net | (63) | (532) | |||||||||
Adjusted EBITDA (1) |
10,201 | 13,227 | |||||||||
Net Debt to Adjusted EBITDA (times) |
0.5 | 0.3 |
As at December 31, |
2023 | 2022 | |||||||||
Net Debt | 5,060 | 4,282 | |||||||||
Cash From (Used in) Operating Activities | 7,388 | 11,403 | |||||||||
(Add) Deduct: | |||||||||||
Settlement of Decommissioning Liabilities | (222) | (150) | |||||||||
Net Change in Non-Cash Working Capital | (1,193) | 575 | |||||||||
Adjusted Funds Flow (1) |
8,803 | 10,978 | |||||||||
Net Debt to Adjusted Funds Flow (times) |
0.6 | 0.4 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
27 |
As at December 31, |
2023 | 2022 | |||||||||
Net Debt | 5,060 | 4,282 | |||||||||
Shareholders’ Equity |
28,698 | 27,576 | |||||||||
Capitalization | 33,758 | 31,858 | |||||||||
Net Debt to Capitalization (percent) |
15 | 13 |
15. CONTINGENT PAYMENTS |
Total | |||||
As at December 31, 2022 |
419 | ||||
Liabilities Settled or Payable | (314) | ||||
Re-measurement |
59 | ||||
As at December 31, 2023 |
164 |
16. DECOMMISSIONING LIABILITIES |
Total | |||||
As at December 31, 2022 |
3,559 | ||||
Liabilities Incurred | 14 | ||||
Liabilities Acquired (Note 3) (1) |
5 | ||||
Liabilities Settled | (221) | ||||
Liabilities Disposed (Note 3) (1) |
(5) | ||||
Change in Estimated Future Cash Flows | 330 | ||||
Change in Discount Rate | 265 | ||||
Unwinding of Discount on Decommissioning Liabilities (Note 4) |
220 | ||||
Exchange Rate Movements | (12) | ||||
As at December 31, 2023 |
4,155 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
28 |
17. OTHER LIABILITIES |
As at December 31, | 2023 | 2022 | |||||||||
Renewable Volume Obligation, Net (1) |
397 | 101 | |||||||||
Pension and Other Post-Employment Benefit Plan | 276 | 201 | |||||||||
Provision for West White Rose Expansion Project |
156 | 204 | |||||||||
Provisions for Onerous and Unfavourable Contracts | 72 | 95 | |||||||||
Employee Long-Term Incentives | 100 | 245 | |||||||||
Drilling Provisions | 25 | 31 | |||||||||
Deferred Revenue | — | 45 | |||||||||
Other | 157 | 120 | |||||||||
1,183 | 1,042 |
18. SHARE CAPITAL AND WARRANTS |
2023 | 2022 | ||||||||||||||||||||||
Number of
Common
Shares
(thousands)
|
Amount |
Number of
Common
Shares
(thousands)
|
Amount | ||||||||||||||||||||
Outstanding, Beginning of Year | 1,909,190 | 16,320 | 2,001,211 | 17,016 | |||||||||||||||||||
Issued Upon Exercise of Warrants | 2,610 | 26 | 9,399 | 93 | |||||||||||||||||||
Issued Under Stock Option Plans | 3,679 | 58 | 11,069 | 170 | |||||||||||||||||||
Purchase of Common Shares Under NCIB | (43,611) | (373) | (112,489) | (959) | |||||||||||||||||||
Outstanding, End of Year | 1,871,868 | 16,031 | 1,909,190 | 16,320 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
29 |
As at December 31, 2023 |
Dividend Reset Date | Dividend Rate (percent) |
Number of Preferred Shares (thousands) |
||||||||||||||
Series 1 First Preferred Shares | March 31, 2026 | 2.58 | 10,740 | ||||||||||||||
Series 2 First Preferred Shares (1) |
Quarterly | 6.77 | 1,260 | ||||||||||||||
Series 3 First Preferred Shares | December 31, 2024 | 4.69 | 10,000 | ||||||||||||||
Series 5 First Preferred Shares | March 31, 2025 | 4.59 | 8,000 | ||||||||||||||
Series 7 First Preferred Shares | June 30, 2025 | 3.94 | 6,000 |
2023 | 2022 | ||||||||||||||||||||||
Number of
Warrants
(thousands)
|
Amount |
Number of
Warrants
(thousands)
|
Amount | ||||||||||||||||||||
Outstanding, Beginning of Year | 55,720 | 184 | 65,119 | 215 | |||||||||||||||||||
Exercised | (2,610) | (8) | (9,399) | (31) | |||||||||||||||||||
Purchased and Cancelled | (45,485) | (151) | — | — | |||||||||||||||||||
Outstanding, End of Year | 7,625 | 25 | 55,720 | 184 |
19. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
Pension and Other Post-Employment Benefits | Private Equity Instruments | Foreign Currency Translation Adjustment | Total | ||||||||||||||||||||
As at December 31, 2021 |
28 | 27 | 629 | 684 | |||||||||||||||||||
Other Comprehensive Income (Loss), Before Tax | 96 | 2 | 713 | 811 | |||||||||||||||||||
Income Tax (Expense) Recovery | (25) | — | — | (25) | |||||||||||||||||||
As at December 31, 2022 |
99 | 29 | 1,342 | 1,470 | |||||||||||||||||||
Other Comprehensive Income (Loss), Before Tax | (58) | 63 | (286) | (281) | |||||||||||||||||||
Reclassification on Divestiture (Note 3) |
— | — | 12 | 12 | |||||||||||||||||||
Income Tax (Expense) Recovery | 14 | (7) | — | 7 | |||||||||||||||||||
As at December 31, 2023 |
55 | 85 | 1,068 | 1,208 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
30 |
20. STOCK-BASED COMPENSATION PLANS |
Units
Outstanding
|
Units
Exercisable
|
||||||||||
As at December 31, 2023 |
(thousands) | (thousands) | |||||||||
Stock Options With Associated Net Settlement Rights | 11,895 | 6,658 | |||||||||
Cenovus Replacement Stock Options | 1,005 | 1,005 | |||||||||
Performance Share Units | 10,243 | — | |||||||||
Restricted Share Units | 7,234 | — | |||||||||
Deferred Share Units | 1,691 | 1,691 |
Units
Granted
|
Units
Vested and
Exercised/
Paid Out
|
||||||||||
For the twelve months ended December 31, 2023 |
(thousands) | (thousands) | |||||||||
Stock Options With Associated Net Settlement Rights | 1,571 | 3,839 | |||||||||
Cenovus Replacement Stock Options | — | 2,113 | |||||||||
Performance Share Units | 2,539 | 972 | |||||||||
Restricted Share Units | 2,961 | 2,300 | |||||||||
Deferred Share Units | 185 | 37 |
Weighted Average Exercise Price |
Units
Exercised
|
||||||||||
For the twelve months ended December 31, 2023 |
($/unit) | (thousands) | |||||||||
Stock Options With Associated Net Settlement Rights Exercised for Net Cash Payment | 12.85 | 3,621 | |||||||||
Stock Options With Associated Net Settlement Rights Exercised and Net Settled for Common Shares (1) |
17.02 | 218 | |||||||||
Cenovus Replacement Stock Options Exercised and Net Settled for Cash | 9.98 | 2,110 | |||||||||
Cenovus Replacement Stock Options Exercised and Net Settled for Common Shares (2) |
3.54 | 3 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Stock Options With Associated Net Settlement Rights | 2 | 3 | 11 | 15 | |||||||||||||||||||
Cenovus Replacement Stock Options | (4) | 17 | (5) | 53 | |||||||||||||||||||
Performance Share Units | (78) | 117 | 47 | 183 | |||||||||||||||||||
Restricted Share Units | (10) | 35 | 46 | 100 | |||||||||||||||||||
Deferred Share Units | (9) | 8 | (2) | 22 | |||||||||||||||||||
Stock-Based Compensation Expense (Recovery) | (99) | 180 | 97 | 373 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
31 |
21. RELATED PARTY TRANSACTIONS |
22. FINANCIAL INSTRUMENTS |
2023 | |||||
Fair Value, Beginning of Year | 55 | ||||
Acquisitions | 13 | ||||
Changes in Fair Value |
63 | ||||
Fair Value, End of Year | 131 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
32 |
2023 | 2022 | ||||||||||||||||||||||||||||||||||
Risk Management | Risk Management | ||||||||||||||||||||||||||||||||||
As at December 31, | Asset | Liability | Net | Asset | Liability | Net | |||||||||||||||||||||||||||||
Crude Oil, Natural Gas, Condensate and Refined Products | 11 | 19 | (8) | 2 | 40 | (38) | |||||||||||||||||||||||||||||
Power Swap Contracts | 2 | — | 2 | 1 | 7 | (6) | |||||||||||||||||||||||||||||
Renewable Power Contracts | 18 | — | 18 | 90 | — | 90 | |||||||||||||||||||||||||||||
31 | 19 | 12 | 93 | 47 | 46 |
As at December 31, | 2023 | 2022 | |||||||||
Level 2 – Prices Sourced From Observable Data or Market Corroboration | (6) | (44) | |||||||||
Level 3 – Prices Sourced From Partially Unobservable Data | 18 | 90 | |||||||||
12 | 46 |
2023 | |||||
Fair Value of Contracts, Beginning of Year | 46 | ||||
Change in Fair Value of Contracts Entered Into During the Year | (45) | ||||
Fair Value of Contracts Realized During the Year | 9 | ||||
Unrealized Foreign Exchange Gain (Loss) on U.S. Dollar Contracts | 2 | ||||
Fair Value of Contracts, End of Year | 12 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Realized (Gain) Loss | 8 | 134 | 9 | 1,762 | |||||||||||||||||||
Unrealized (Gain) Loss | (36) | (38) | 52 | (126) | |||||||||||||||||||
(Gain) Loss on Risk Management |
(28) | 96 | 61 | 1,636 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
33 |
Sensitivity Range | Increase | Decrease | ||||||||||||||||||
WCS Forward Prices | ± $10.00 per barrel |
(21) | 45 | |||||||||||||||||
23. RISK MANAGEMENT |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
34 |
As at December 31, 2023 |
Notional Volumes (1) (2) |
Terms (3) |
Weighted
Average
Price (1) (2)
|
Fair Value Asset (Liability) | |||||||||||||||||||
Futures Contracts Related to Blending (4) |
|||||||||||||||||||||||
WTI Fixed – Sell | 3.5 MMbbls |
January 2024 – December 2024 | US$75.22/bbl |
16 | |||||||||||||||||||
WTI Fixed – Buy | 1.5 MMbbls |
January 2024 – December 2024 | US$73.69/bbl |
(4) | |||||||||||||||||||
Power Swap Contracts | 2 | ||||||||||||||||||||||
Renewable Power Contracts | 18 | ||||||||||||||||||||||
Other Financial Positions (5) |
(20) | ||||||||||||||||||||||
Total Fair Value | 12 |
As at December 31, 2023 |
Sensitivity Range | Increase | Decrease | |||||||||||
Power Commodity Price | ± C$20.00/MWh (1) Applied to Power Hedges |
92 | (92) | |||||||||||
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
35 |
As at December 31, 2023 |
1 Year | Years 2 and 3 | Years 4 and 5 | Thereafter | Total | ||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities (1) |
5,480 | — | — | — | 5,480 | ||||||||||||||||||||||||
Short-Term Borrowings |
179 | — | — | — | 179 | ||||||||||||||||||||||||
Contingent Payments | 168 | — | — | — | 168 | ||||||||||||||||||||||||
Lease Liabilities (2) |
438 | 712 | 569 | 2,635 | 4,354 | ||||||||||||||||||||||||
Long-Term Debt (2) |
313 | 792 | 3,007 | 7,145 | 11,257 | ||||||||||||||||||||||||
As at December 31, 2022 |
1 Year | Years 2 and 3 | Years 4 and 5 | Thereafter | Total | ||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities (1) |
6,124 | — | — | — | 6,124 | ||||||||||||||||||||||||
Short-Term Borrowings |
115 | — | — | — | 115 | ||||||||||||||||||||||||
Contingent Payments | 271 | 167 | — | — | 438 | ||||||||||||||||||||||||
Lease Liabilities (2) |
426 | 746 | 596 | 2,889 | 4,657 | ||||||||||||||||||||||||
Long-Term Debt (2) |
401 | 983 | 2,014 | 11,196 | 14,594 |
24. SUPPLEMENTARY CASH FLOW INFORMATION |
As at December 31, |
2023 | 2022 | |||||||||
Total Current Assets | 9,708 | 12,430 | |||||||||
Total Current Liabilities | 6,210 | 8,021 | |||||||||
Working Capital | 3,498 | 4,409 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
For the periods ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Accounts Receivable and Accrued Revenues | 1,411 | 719 | 314 | 838 | |||||||||||||||||||
Income Tax Receivable | (283) | 30 | (295) | (58) | |||||||||||||||||||
Inventories | 559 | 29 | 216 | (143) | |||||||||||||||||||
Accounts Payable and Accrued Liabilities | (754) | (136) | (685) | (524) | |||||||||||||||||||
Income Tax Payable | (56) | 123 | (1,112) | 1,000 | |||||||||||||||||||
Total Change in Non-Cash Working Capital | 877 | 765 | (1,562) | 1,113 | |||||||||||||||||||
Net Change in Non-Cash Working Capital – Operating Activities | 949 | 673 | (1,193) | 575 | |||||||||||||||||||
Net Change in Non-Cash Working Capital – Investing Activities | (72) | 92 | (369) | 538 | |||||||||||||||||||
Total Change in Non-Cash Working Capital | 877 | 765 | (1,562) | 1,113 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
36 |
Dividends Payable | Warrant Purchase Payable | Short-Term Borrowings | Long-Term Debt | Lease Liabilities | |||||||||||||||||||||||||
As at December 31, 2021 |
— | — | 79 | 12,385 | 2,957 | ||||||||||||||||||||||||
Changes From Financing Cash Flows: | |||||||||||||||||||||||||||||
Net Issuance (Repayment) of Short-Term Borrowings | — | — | 34 | — | — | ||||||||||||||||||||||||
Repayment of Long-Term Debt |
— | — | — | (4,149) | — | ||||||||||||||||||||||||
Principal Repayment of Leases | — | — | — | — | (302) | ||||||||||||||||||||||||
Base Dividends Paid on Common Shares | (682) | — | — | — | — | ||||||||||||||||||||||||
Variable Dividends Paid on Common Shares | (219) | — | — | — | — | ||||||||||||||||||||||||
Dividends Paid on Preferred Shares | (26) | — | — | — | — | ||||||||||||||||||||||||
Non-Cash Changes: | |||||||||||||||||||||||||||||
Net Premium (Discount) on Redemption of Long-Term Debt | — | — | — | (29) | — | ||||||||||||||||||||||||
Finance and Transaction Costs | — | — | — | (28) | — | ||||||||||||||||||||||||
Lease Additions | — | — | — | — | 25 | ||||||||||||||||||||||||
Base Dividends Declared on Common Shares | 682 | — | — | — | — | ||||||||||||||||||||||||
Variable Dividends Declared on Common Shares | 219 | — | — | — | — | ||||||||||||||||||||||||
Dividends Declared on Preferred Shares | 35 | — | — | — | — | ||||||||||||||||||||||||
Exchange Rate Movements and Other | — | — | 2 | 512 | 156 | ||||||||||||||||||||||||
As at December 31, 2022 |
9 | — | 115 | 8,691 | 2,836 | ||||||||||||||||||||||||
Changes From Financing Cash Flows: | |||||||||||||||||||||||||||||
Net Issuance (Repayment) of Short-Term Borrowings | — | — | 58 | — | — | ||||||||||||||||||||||||
Repayment of Long-Term Debt |
— | — | — | (1,346) | — | ||||||||||||||||||||||||
Principal Repayment of Leases | — | — | — | — | (288) | ||||||||||||||||||||||||
Base Dividends Paid on Common Shares | (990) | — | — | — | — | ||||||||||||||||||||||||
Dividends Paid on Preferred Shares | (36) | — | — | — | — | ||||||||||||||||||||||||
Payment for Purchase of Warrants | — | (711) | — | — | — | ||||||||||||||||||||||||
Finance and Transaction Costs | — | (2) | — | — | — | ||||||||||||||||||||||||
Non-Cash Changes: | |||||||||||||||||||||||||||||
Net Premium (Discount) on Redemption of Long-Term Debt | — | — | — | (84) | — | ||||||||||||||||||||||||
Finance and Transaction Costs | — | 2 | — | (19) | — | ||||||||||||||||||||||||
Lease Acquisitions | — | — | — | — | 33 | ||||||||||||||||||||||||
Lease Additions | — | — | — | — | 57 | ||||||||||||||||||||||||
Lease Divestitures | — | — | — | — | (11) | ||||||||||||||||||||||||
Base Dividends Declared on Common Shares | 990 | — | — | — | — | ||||||||||||||||||||||||
Dividends Declared on Preferred Shares | 36 | — | — | — | — | ||||||||||||||||||||||||
Warrants Purchased and Cancelled | — | 711 | — | — | — | ||||||||||||||||||||||||
Exchange Rate Movements and Other | — | — | 6 | (134) | 31 | ||||||||||||||||||||||||
As at December 31, 2023 |
9 | — | 179 | 7,108 | 2,658 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
37 |
25. COMMITMENTS AND CONTINGENCIES |
As at December 31, 2023 |
1 Year | 2 Years | 3 Years | 4 Years | 5 Years | Thereafter | Total | ||||||||||||||||||||||||||||||||||
Transportation and Storage (1) (2) |
2,018 | 1,927 | 1,680 | 1,663 | 1,641 | 15,738 | 24,667 | ||||||||||||||||||||||||||||||||||
Product Purchases |
617 | — | — | — | — | — | 617 | ||||||||||||||||||||||||||||||||||
Real Estate |
57 | 57 | 59 | 63 | 58 | 604 | 898 | ||||||||||||||||||||||||||||||||||
Obligation to Fund HCML |
94 | 94 | 94 | 89 | 52 | 90 | 513 | ||||||||||||||||||||||||||||||||||
Other Long-Term Commitments (3) |
417 | 194 | 184 | 175 | 166 | 965 | 2,101 | ||||||||||||||||||||||||||||||||||
Total Commitments |
3,203 | 2,272 | 2,017 | 1,990 | 1,917 | 17,397 | 28,796 |
26. PRIOR PERIOD REVISIONS |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
38 |
Three Months Ended December 31, 2022 | Twelve Months Ended December 31, 2022 | ||||||||||||||||||||||||||||||||||
Oil Sands Segment |
Previously Reported | Revisions | Revised Balance | Previously Reported | Revisions | Revised Balance | |||||||||||||||||||||||||||||
Gross Sales |
6,731 | (78) | 6,653 | 34,775 | (92) | 34,683 | |||||||||||||||||||||||||||||
Purchased Product | 594 | (78) | 516 | 4,810 | (92) | 4,718 | |||||||||||||||||||||||||||||
6,137 | — | 6,137 | 29,965 | — | 29,965 |
Conventional Segment | |||||||||||||||||||||||||||||||||||
Gross Sales | 1,131 | 22 | 1,153 | 4,332 | 107 | 4,439 | |||||||||||||||||||||||||||||
Transportation and Blending | 37 | 22 | 59 | 143 | 107 | 250 | |||||||||||||||||||||||||||||
1,094 | — | 1,094 | 4,189 | — | 4,189 |
U.S. Refining Segment
|
|||||||||||||||||||||||||||||||||||
Gross Sales |
6,608 | (78) | 6,530 | 30,310 | (92) | 30,218 | |||||||||||||||||||||||||||||
Purchased Product | 5,747 | (78) | 5,669 | 26,112 | (92) | 26,020 | |||||||||||||||||||||||||||||
861 | — | 861 | 4,198 | — | 4,198 |
Corporate and Eliminations Segment |
|||||||||||||||||||||||||||||||||||
Gross Sales | (1,749) | 134 | (1,615) | (7,464) | 77 | (7,387) | |||||||||||||||||||||||||||||
Purchased Product |
(1,320) | 168 | (1,152) | (5,533) | 341 | (5,192) | |||||||||||||||||||||||||||||
Transportation and Blending | (136) | (128) | (264) | (664) | (511) | (1,175) | |||||||||||||||||||||||||||||
Operating | (352) | 94 | (258) | (1,270) | 247 | (1,023) | |||||||||||||||||||||||||||||
59 | — | 59 | 3 | — | 3 |
Consolidated |
|||||||||||||||||||||||||||||||||||
Purchased Product | 6,908 | 12 | 6,920 | 33,801 | 157 | 33,958 | |||||||||||||||||||||||||||||
Transportation and Blending | 2,826 | (106) | 2,720 | 11,530 | (404) | 11,126 | |||||||||||||||||||||||||||||
Operating | 1,362 | 94 | 1,456 | 5,569 | 247 | 5,816 | |||||||||||||||||||||||||||||
11,096 | — | 11,096 | 50,900 | — | 50,900 |
Cenovus Energy Inc. – Q4 2023 Interim Consolidated Financial Statements |
39 |