(Reuters) - Canada’s Cenovus Energy Inc said on Tuesday it would cut its capital spending for 2019 by 4 percent amid a broader turnaround plan, but raised its oil sands production forecast.
The company said it plans to invest between C$1.2 billion ($901.1 million) and C$1.4 billion in 2019, with the majority of the budget going to its Foster Creek and Christina Lake oil sands operations.
Cenovus raised its 2019 oil sands production forecast by 3 percent to a range of 377,000 barrels per day (bpd) to 395,000 bpd as it expects increased activity at its Christina Lake operations in Alberta. The company said the production forecast does not include the impact of mandated production curtailments scheduled to take effect on Jan. 1.
“We suspect the Street will be encouraged by a preliminary 2019 budget that points to lower-than-expected spending, supporting better-than-expected free cash flow,” Raymond James said in a note.
The company also said it expects crude-by-rail volumes to ramp up to about 100,000 bpd by the end of 2019.
In September, the oil and gas producer had signed three-year deals with Canada’s two major railways Canadian National Railway Co and Canadian Pacific Railway Ltd as pipelines run at full capacity.
Reporting by Laharee Chatterjee and John Benny in Bengaluru; Editing by James Emmanuel