Cenovus eeks out fourth-quarter profit

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.