UPDATE 3-Cenovus says output to rise but warns on cash flow

Wed Dec 12, 2012 1:35pm EST
 
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* Forecasts 2013 net oil production of 180,000-196,000 bpd

* Expects 2013 capital budget of C$3.2 bln to C$3.6 bln

* Sees phase 4 of Christina Lake project at full capacity in Q2

* Warns that Q4 cash flow will be lower

* Shares down 1.7 pct

CALGARY, Alberta, Dec 12 (Reuters) - Cenovus Energy Inc , Canada's second-largest independent oil producer, said on Wednesday it will boost spending in 2013 and raise production by 14 percent as it ramps up output at its northern Alberta oil sands projects.

It warned, however, that fourth-quarter cash flow will fall short of targets.

The company forecast net production of 180,000 to 196,000 barrels per day (bpd) of oil in 2013, up from an expected 165,000 bpd this year. It also said it would spend between C$3.2 billion ($3.25 billion) and C$3.6 billion next year, up from about C$3.35 billion in 2012.

Cenovus warned, however, that recent low prices for heavy oil from the oil sands would cut into fourth-quarter cash flow, which it estimated at about C$700 million, or about C$400 million below its previous estimate. It said the lower cash flow estimate was also a result of higher taxes and longer than expected turnarounds at the two U.S. refineries it co-owns with Phillips 66.   Continued...