Cen­ovus eeks out fourth-quar­ter profit

Medicine Hat News - - COMMUNITY-WEST -

New de­tails of a re­gional drilling plan by oil gi­ant Cen­ovus are be­ing re­leased as the com­pany an­nounced year-end re­sults Thurs­day that show it had cur­tailed losses and boosted pro­duc­tion in 2016.

The News was the first agency to re­port in early De­cem­ber that the com­pany planned to re­turn to drilling in the Pal­liser Block after a year-long sus­pen­sion.

That tar­geted con­ven­tional drilling pro­gram, val­ued at $160 mil­lion, has com­menced, the com­pany said Thurs­day.

There is a “a large in­ven­tory of at­trac­tive short­cy­cle tight oil op­por­tu­ni­ties. To date, Cen­ovus has iden­ti­fied ap­prox­i­mately 700 drilling lo­ca­tions.”

It plans to drill about 50 hor­i­zon­tal de­vel­op­ment wells and 60 strati­graphic wells at Pal­liser in 2017.

The Calgary-based com­pany — which is both an oil pro­ducer in Al­berta and an oil re­finer in the United States — ended 2016 with a $545 mil­lion loss for the full year but squeezed out a profit in the fourth quar­ter.

Net in­come for the fi­nal three months equalled $91 mil­lion, com­pared to a loss of $641 mil­lion in the last quar­ter of 2015.

Cen­ovus En­ergy CEO Brian Fer­gu­son says the com­pany has fo­cused on con­tain­ing costs and spend­ing less on cap­i­tal projects than orig­i­nally planned.

The com­pany says it plans to re­sume in­vest­ment at its Christina Lake oil­sands project, with first oil from Phase G ex­pected in the sec­ond half of 2019.

The com­pany says it will pro­vide de­tails on projects for the Fos­ter Creek and Nar­rows Lake oil­sands op­er­a­tions in June.

The com­pany stayed with its re­cent price fore­casts of WTI of US$47.25 per bar­rel of West Texas In­ter­me­di­ate crude, US$31.50 for West­ern Canada Se­lect and a nat­u­ral gas price of $2.60 per gi­ga­joule on the Al­berta spot mar­ket. It also pre­dicts the Cana­dian dol­lar to av­er­age US74-cents through 2017.

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