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Shares in oil producer Cenovus Energy Inc. jumped almost 10 per cent Thursday after it reported quarterly profits that beat market expectations, upped its shareholder payout and sought to reassure investors it can withstand oil prices much weaker than they are today.
The stock was trading at $17.90 on the Toronto Stock Exchange in the early afternoon, an increase of 9.9 per cent.
The spike came after Cenovus reported on Thursday its earnings for the first three months of 2025 were $859 million, or 47 cents per share, down from $1.18 billion a year ago, or 62 cents a year earlier.
The mean analyst estimate had been for earnings of 37 cents per share, according to data compiled by LSEG.
Revenue for the quarter amounted to $13.30 billion, up from $13.06 billion a year earlier.
Total production for the three months ended March 31 was 818,900 barrels of oil equivalent per day, up from 800,900 boe/d in the same quarter last year.
Cenovus raised its quarterly dividend two cents to 20 cents per share. During the first quarter, the company returned $333 million to shareholders through dividends. It also bought back $62 million of its own stock during the period, and another $178 million between quarter-end and May 5.
“With the value we see in our shares today and with the capital investment decreasing as we complete our major projects, we see a significant opportunity to increase our returns to shareholders through buybacks going forward and continuing to ensure our balance sheet remains strong,” chief financial officer Kam Sandhar told analysts on a conference call.
Chief executive Jon McKenzie said Cenovus is not putting its balance sheet at risk as it plans share buybacks for the remainder of the year.
“There’s a fine line between discipline and dogma, and when you have opportunities like we have with the share price being where it is, I think it’s incumbent on us to take a look at that, understanding that we have one of the best balance sheets in the business,” he said.
Cenovus said it can continue paying its dividend and sustaining its business with West Texas Intermediate prices at US$45 per barrel. In recent weeks, the key U.S. light oil benchmark has been hovering around US$60, about US$10 lower than where it was just six months ago.
“We continue to progress our growth plans with minimal impact to the business,” McKenzie said.
“This financial discipline coupled with our focus on reducing costs makes Cenovus resilient and durable for the long term and well positioned in any reasonable commodity price scenario.”
Cenovus also said the bulk of this year’s maintenance work at its oilsands plants and U.S. refineries is on track to wrap up by mid-year and that it should be back to more normal production levels for the remainder of 2025.
“With major maintenance activities behind us and production beginning to ramp up, we’re positioned for a very clear runway of strong operating performance in the second half of the year and into 2026,” McKenzie said.
This report by The Canadian Press was first published May 8, 2025.
Companies in this story: (TSX: CVE)
Lauren Krugel, The Canadian Press
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