(Reuters) - Cenovus Energy Inc (CVE.TO) posted a smaller-than-expected quarterly loss, helped by its cost-reduction efforts, and said about two-thirds of the costs it had cut since 2014-end would be “sustainable” even when oil prices recover.
Cenovus has deferred projects, cut its quarterly dividend, 2016 capital budget and workforce in response to the fall in oil prices that began in mid-2014.
“I’m optimistic about the potential to resume construction on some of our deferred projects,” Chief Executive Brian Ferguson said in a statement, citing the company’s “sustainable” cost cuts and its financial position.
Cenovus has postponed its Narrows Lake oil sands project in northeastern Alberta. It has also deferred further expansions at Foster Creek and Christina Lake oil sands projects in Alberta, which are joint ventures with ConocoPhillips (COP.N).
“However, we still need additional clarity on federal fiscal and regulatory policies that could impact our operating environment,” Ferguson said.
Ferguson said in April that the company needs clarity on discussions around the pipeline review process by the National Energy Board and the working groups looking at climate policy and any potential changes around income tax rules.
Cenovus said operating costs at its oil sands operations fell by 24 percent per barrel in the second quarter ended June 30, while those at its conventional crude oil field dipped 9 percent.
Cenovus posted a net loss of C$267 million ($203 million), or 32 Canadian cents per share, in the quarter, compared with a profit of C$126 million, or 15 Canadian cents per share, a year earlier.
The company’s adjusted loss was 5 cents per share, much smaller than the average analyst estimate of 19 cents, according to Thomson Reuters I/B/E/S.
Reporting by Swetha Gopinath in Bengaluru; Editing by Maju Samuel