Cenovus Sees 14% Free Funds Flow Growth Through 2021; CEO To Retire

(RTTNews) - Canadian integrated oil company Cenovus Energy Inc. (CVE.TO, CVE) on Tuesday said it expects to generate 14% annualized free funds flow growth through 2021 at a West Texas Intermediate price of $55 per barrel while increasing production at a 6% compound annual growth rate and reducing its debt. The company also said it is progressing its plan to divest non-core assets and is targeting between $4 billion and $5 billion in announced sales agreements by the end of the year.

Separately, Cenovus announced that its President & Chief Executive Officer Brian Ferguson will be retiring as an officer and director of the company on October 31. The Board will initiate a broad global search for a new President & Chief Executive Officer.

Following his retirement at the end of October, Ferguson will continue in a transition advisor role reporting to the Board Chair until March 31, 2018. He has been at the head of Cenovus since the company launched in December of 2009.

In its five-year plan, Cenovus said it would an additional $1 billion of cumulative capital, operating and general and administrative cost reductions over the next three years.

The planned sale of non-core assets is expected to more than satisfy the $3.6 billion asset sale bridge facility used to help fund the acquisition from ConocoPhillips. The company is now targeting to reach divestiture agreements by the end of 2017 for its entire legacy conventional portfolio.

Further, the company said its divestiture processes for the Pelican Lake and Suffield assets are already well underway, and the company is now in the process of preparing data rooms for its Palliser asset in southern Alberta and its Weyburn CO2 enhanced oil operation in southern Saskatchewan. Combined, all of these assets are expected to produce approximately 112,000 barrels of oil equivalent per day in 2017.

The company completed its acquisition of assets in Alberta and British Columbia from ConocoPhillips on May 17.