June 16, 2010 / 10:22 PM / 8 years ago

UPDATE 1-Cenovus plans five-fold boost in oil sands output

* Says to produce 300,000 bpd by 2019

* Estimates 137 bln barrels of bitumen in place

* Raises total output estimate for two projects (Adds details)

CALGARY, Alberta, June 16 (Reuters) - Cenovus Energy Inc (CVE.TO), the oil sands company spun off by EnCana Corp (ECA.TO) late last year, said on Wednesday its northern Alberta properties contain more than enough oil to support plans for a five-fold rise in production over the next decade.

The company, which has an oil sands production and refining joint venture with ConocoPhillips (COP.N), said it expects to boost its share of production from its oil sands operations to 300,000 barrels per day by the end of 2019, up from an average 58,546 bpd in the first quarter of this year.

Cenovus said an assessment of its oil sands properties by an outside evaluator showed they contained up to 137 billion barrels of tar-like bitumen, though only a fraction of that amount is recoverable.

Still, the company said the estimate gives it confidence it can meet its growth targets.

“This independent evaluation of the amount of bitumen on Cenovus lands confirms the enormous opportunity our company has before it,” Brian Ferguson, the company’s chief executive, said in a statement. “We believe we have ample resource to achieve significant growth for decades.”

The oil sands contain the largest reserves outside the Middle East but they are more difficult and expensive to extract. Cenovus uses thermal methods on its holdings, pumping steam into the ground to liquefy the bitumen so it can flow to the surface.

The company said it will continue to expand its Foster Creek and Christina Lake projects, co-owned by ConocoPhillips.

Two planned expansions at both sites are expected to be completed a year ahead of schedule, with Foster Creek output up to 150,000 bpd in 2014 and Christina Lake’s capacity raised to 138,000 bpd in 2016.

Cenovus also raised its estimate for maximum gross output for both projects to 493,000 bpd, 15 percent higher than previously forecast.

It expects the planned Narrows Lake project, also part of the Conoco joint-venture, to produce 130,000 bpd in 2106 while other wholly owned projects still in the planning stages could eventually add another 230,000 bpd.

Cenovus shares rose 4 Canadian cents to C$29.99 on Wednesday on the Toronto Stock Exchange.

$1=$1.02 Canadian Reporting by Scott Haggett; editing by Rob Wilson

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