Cenovus Energy (NYSE: CVE) booked a second-quarter net profit that was higher than year-ago levels on the back of increased oil and gas production and higher refining throughput at its U.S. refineries.
Cenovus reported on Thursday a net income of US$723 million (C$1 billion) for the second quarter of 2024, up from US$626 million (C$866 million) for the same period last year.
Cash from operating activities and free funds flow also rose in the quarter of April to June 2024 compared to the second quarter of 2023.
Cenovus attributed the higher net income to "solid production from its upstream assets and improved crude throughput at the company's U.S. refineries, which operated at an overall utilization rate of 93%."
In the second quarter, both upstream and downstream revenues for Cenovus rose compared to the first quarter. The sequential increase in revenues was driven primarily by "improved benchmark oil prices, including a narrower light-heavy crude oil differential, combined with strong operating results," the company said.
Total upstream production was 800,800 barrels of oil equivalent per day (boe/d) in the second quarter, flat compared to the first quarter, but higher than the 729,300 boe/d production in the second quarter of 2023.
Refining throughput in Canadian operations was down in the second quarter compared to Q1 2024, due to planned maintenance. But refining volumes at Cenovus's U.S. refineries increased thanks to improved operating performance and availability across the company's operated and non-operated refining assets and lower levels of planned maintenance when compared with the prior quarter.
The Canadian company reached in July its target to reduce debt to US$3 billion (C$4 billion), and as a result, Cenovus will begin returning 100% of excess free funds flow (EFFF) to shareholders, beginning in the third quarter.
Commenting on the hitting of the debt target, Cenovus president and CEO Jon McKenzie said, "With the achievement of this significant financial milestone, we are now in a position to substantially increase our shareholder returns."
By Charles Kennedy for Oilprice.com
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