Canadian Manufacturing

Cenovus Energy planning further cost cutting, workforce reductions

Cenovus revised its capital budget lower, aiming for between $1.2 billion and $1.3 billion

CALGARY—Cenovus Energy Inc. says it’s planning to reduce its workforce further this year and take other moves to cut $400 million to $500 million from its costs while it rides out a rough period of low oil and gas prices.

Among other things, it’s aiming to cut operating and administrative costs by $200 million, through unspecified workforce cuts and lower cash compensation for its five highest-paid executives.

Its revised capital budget has also been lowered to between $1.2 billion and $1.3 billion, which is down $200 million to $300 million from the previous announcement. It’s also 27 per cent less than 2015 and 59 per cent lower than 2014 levels.

The Calgary-based oilsands producer and refiner is also reducing its first quarter dividend by 69 per cent to five cents per share.

Cenovus didn’t specify details about the workforce cuts in its announcement but said it’s evaluating all its costs.

Cenovus CEO Brian Ferguson said the company ended 2015 in a stronger competitive position.

“We must remain focused on maintaining our financial resilience through 2016 and beyond, ensuring that we don’t compromise the balance sheet strength we’ve worked so hard to achieve, so that we are well placed to maximize shareholder value when commodity prices improve,” Ferguson said in a statement with the company’s fourth-quarter results.

Cenovus had a $641 million net loss, or 77 cents per share, in the fourth quarter—dragging down the full-year profit to $618 million or 75 cents per share.

In the comparable period of 2014, the company’s fourth-quarter loss was $472 million or 62 cents per share and its full-year profit was $744 million or 98 cents per share.

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