Cenovus triples dividend as robust crude prices boost profit beat

U.S-listed shares of the oil and gas producer , which have gained nearly 34% so far this year, were up as much as 5.65% in premarket trading.

Russia’s invasion of Ukraine exacerbated concerns about an already-tight energy market and pushed crude prices to their highest levels in more than a decade. Brent crude , the global benchmark was trading at $105.25 a barrel on Wednesday.

Cenovus raised its capital expenditures forecast for the year by C$300 million to a range of C$2.9 billion to C$3.3 billion, to reflect the increase in capital spend to complete the rebuild of its Superior Refinery in Wisconsin.

The rebuild is now expected to cost about $1.2 billion, up from about $950 million, due to factors including higher labour costs, pandemic-related expenses, inflation and supply chain constraints, the company said.

The company, which agreed to buy rival Husky Energy last year to create Canada’s No. 3 oil and gas producer, said upstream production rose to 798,600 barrels of oil equivalent per day (boepd) in the quarter, from 769,254 boepd a year earlier.

The company said the base dividend will increase from $0.14 per share to $0.42 per share annually, beginning with the second quarter of this year.

Excluding one-time items, Cenovus earned 79 Canadian cents per share, beating analysts’ estimates of 71 Canadian cents per share, according to IBES data from Refinitiv..

The Calgary Alberta-based company’s net earnings rose to C$1.63 billion ($1.27 billion), or 81 Canadian cents per share, for the first-quarter ended March 31, from C$220 million, or 10 Canadian cents per share, a year earlier.