Cenovus Energy, the Canadian leader in the oil and natural gas markets, has unveiled its 2021’s capital budget, which is going to be focused on maintaining safe operations, and achieving the goals announced back in October 25, 2020, when it acquired Husky Energy.
Budget’s highlights includes sustained capital investment of $2,1 billion to increase upstream production to nearly 755,000 barrels of equivalent oil per day; and downstream throughput to 525,000 barrels per day.
The company also anticipates the creation of nearly $1 billion in synergies, thanks to the opportunities created when it acquired Husky Energy, back in October 25, 2020; “putting the company firmly on track to reach its planned $1.2 billion in annual run-rate synergies by the end of 2021,” company statement reads.
Other $570 million of Cenovus’ capital budget for this year will be directed to the Superior Refinery rebuild; “with a substantial portion of the go-forward costs expected to be recovered through insurance proceeds.”
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Cenovus and Husky to remian strong in 2021
In early January, the acquisition of Husky was closed; both companies agreed to combine themselves in an all-stock transaction. “Husky common shareholders received 0.7845 of a Cenovus common share; and 0.0651 of a Cenovus common share purchase warrant in exchange for each Husky common share,” as the company statement underlines.
As we reported previously, this transaction meant for the two companies to cut about 25% of its personnel, back in October 27, 2020. Cuts were circumscribed to Calgary where both companies have their headquarters.
About the 2021 budget, Alex Pourbaix, Cenovus President & CEO, said: “With this budget we’re delivering on the commitments we made when we announced the Husky transaction.”
“In 2021 we’ll remain focused on disciplined capital allocation; investing selectively in the highest return opportunities available in our expanded asset portfolio; we expect to make significant progress towards achieving our synergy targets,” he concluded.