Oilsands operator and refiner Cenovus Energy Inc. reports its net profits more than doubled to $510 million from $295 million as output rose and the company booked a big hedging gain.
The Calgary company said early Thursday its earnings per share jumped to 67 cents in the third quarter ended Sept. 30. That was up from 39 cents last year, beating analyst expectations.
Three month revenues after royalties rose to $3.86 billion from $2.96 billion.
Meanwhile, cash flow rose 56 per cent to $793 million from $509 million as the company benefited from higher oil prices and improved refining results.
Meanwhile, output at its Foster Creek and Christina Lake oilsands projects was more than 66,000 barrels a day for the company.
The company also booked a hedging gain of $283 million in the quarter, compared with a hedging gain of $45 million in the same year-earlier period.
“We delivered strong operating performance from our oil properties in the third quarter and continued to meet the milestones the company has set out to build long-term value for our shareholders,” said Brian Ferguson, president and CEO, said in a release before stock markets opened.
“The company generated another quarter of excellent financial performance as higher crude oil prices and stronger refining results contributed to a significant increase in cash flow.”
Analysts polled by Thomson Reuters were on average expecting earnings of 52 cents per share,
Cenovus (TSX:CVE) is a relatively new name in the oilpatch, having split off from natural gas producer Encana Corp. (TSX:ECA) in late 2009.
Last week, the company announced it sold a marine terminal near Kitimat, B.C., to Shell Canada Ltd., which has been looking to export liquefied natural gas off of the province’s northern coast. Financial terms were not disclosed.
The Calgary-based company has said it aims to produce about 500,000 barrels of oil per day by the end of the decade. The steep increase will be largely driven by a six-fold jump in oilsands production by the end of 2021.
Cenovus is on the lookout for joint-ventures, farm-outs, swaps or other transactions to further speed up development of its holdings. It has hired RBC Capital Markets and Barclays Capital to help it lure a partner.
Cenovus is no stranger to such arrangements; its Foster Creek, Christina Lake and Narrows Lake oilsands projects are part of a 50-50 joint venture with Houston-based energy giant ConocoPhillips, which ties Cenovus production to two of the U.S. firm’s refineries.
All Cenovus oilsands developments use steam to liquefy the sticky bitumen deep underground so it can be more easily drawn to the surface.