October 25, 2012 / 7:18 PM / 6 years ago

Cenovus operating profit rises on higher production

CALGARY, Alberta (Reuters) - Cenovus Energy Inc (CVE.TO), Canada’s No. 2 independent oil producer, said on Thursday its oil production rose to a record in the third quarter as it continues to expand two northern Alberta oil sands projects, and profit for the quarter jumped 43 percent.

Output at the Foster Creek and Christina Lake steam-driven oil sands projects that Cenovus co-owns with ConocoPhillips (COP.N) reached 190,000 barrels per day in the period, as the partners continue an expansion that could see the projects eventually produce a combined 600,000 barrels per day.

Cenovus’ share of the project’s production rose by 45 percent from the third-quarter of 2011, to 95,625 barrels per day.

“We are executing well in all aspects of our oil sands operation, and we intend to sustain that momentum,” John Brannan, chief operating officer, said on a conference call.

Net income fell to C$289 million, or 38 Canadian cents per share, including a non-cash charge on a tax-management loss, down from C$510 million, or 67 Canadian cents per share, a year earlier.

Operating earnings, which exclude most one-time and unusual items, rose to C$432 million ($435.6 million), or 57 Canadian cents per share, from C$303 million, or 40 Canadian cents, a year earlier. The result topped the average analyst forecast for 54 Canadian cents per share, according to Thomson Reuters I/B/E/S.

Cash flow, a glimpse into the company’s ability to pay for new projects, rose 41 percent to C$1.12 billion, or C$1.47 per share.

Cenovus said total cash flow for the year is now expected to be 22 percent higher than last year. Cash flow in 2011 was C$3.28 billion.

Company-wide output of oil and natural gas rose 28 percent to 171,350 barrels of oil equivalent per day.

Cenovus said it is on track to add about 400,000 barrels per day of additional gross oil sands production over the next five years.

Shares of Cenovus were up 18 Canadian cents to C$34.18 by late afternoon on the Toronto Stock Exchange.

($1 = $0.99 Canadian)

Reporting by Scott Haggett in Calgary and Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila and Leslie Adler

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