Cenovus Energy exceeds job-cut target, shares rise
(Reuters) - Cenovus Energy Inc (CVE.TO: Quote) has achieved 700 job cuts for the second half of 2015, double the number it forecast in July, the Canadian oil producer said on Thursday.
Its shares jumped after the announcement.
Cenovus said it expected to end the year with about 4,000 employees, including contractors, down about a quarter from a year earlier. The company estimated that these reductions would generate savings of at least C$100 million ($76 million) annually from next year.
Cenovus shares were up 2.4 percent at C$19.70 in afternoon trading in Toronto. The company also raised its 2015 cost-savings target to C$400 million from the C$280 million it forecast in July.
Job cuts will result in additional severance costs of about C$32 million in the current quarter, the company said. Cenovus, which previously announced additional staff reductions in 2016, said it would achieve additional savings by changing some compensation, benefits and time-off practices.
Chief Executive Officer Brian Ferguson said Cenvous wants its major projects to adopt a "manufacturing mindset" as it anticipates adding 35 per cent to its oil sands productive capacity in 2016.
"They're very large operations, lending themselves to economies of scale," he said in an inteview.
Cenovus, which has cut capital spending in recent months, reported a third-quarter operating loss of C$28 million, or 3 Canadian cents per share.
Analysts on average had expected a loss of 4 Canadian cents per share, according to Thomson Reuters I/B/E/S. Continued...