Cenovus Energy Inc. (NYSE:CVE) Q2 2016 Earnings Conference Call - Preliminary Transcript

Jul 28, 2016 • 08:00 am ET

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Cenovus Energy Inc. (NYSE:CVE) Q2 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen and thank you for standing by. Welcome to Cenovus Energy's Second Quarter 2016 Financial and Operating Results. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. Members of the investment community will have the opportunity to ask questions first. At the conclusion of that session, members of the media may then ask questions. Please be advised that this conference call may not be recorded or rebroadcast without the express consent of Cenovus Energy. I'd now like to turn the conference call over to Mr. Kam Sandhar, Vice President Investor Relations and Corporate Development. Please go ahead, Mr. Sandhar.

Executive
Kam Sandhar

Thank you, operator, and welcome everyone to our second quarter 2016 results conference call. I would like to refer to you to the advisories located at the end of today's news release. These advisories describe the forward-looking information; non-GAAP measures; and oil and gas terms referred to today and outline the Risk Factors and assumptions relevant to this discussion. Additional information is available in our most recent annual information form or Form 40-F. The quarterly results have been presented in Canadian dollars and on a before-royalties basis.

We have also posted a link to our quarterly results including updated guidance on the home page of our website at cenovus.com. Brian Ferguson, our President and Chief Executive Officer will begin with some opening remarks and then turn the call over to Ivor Ruste, Executive Vice President and Chief Financial Officer, who will discuss our financial performance.

Following that, Kieron McFadyen, Executive Vice President, and President, Upstream Oil & Gas will provide an update of our upstream operating performance. Bob Pease, Executive Vice President, Corporate Strategy and President of Downstream will then provide an update on our downstream results before turning the call back to Brian for some closing comments. We will then begin the Q&A portion of the call. Please go ahead, Brian.

Executive
Brian Ferguson

Thanks, Kam. Good morning. I am pleased to be reporting strong operating and improved financial results for our second quarter. Our focus on cost and production efficiency is paying off. Cenovus is benefiting from continued strong operational performance, sustained cost savings, operational efficiencies as well as improved commodity prices and seasonally stronger refining margins. We remain focused on the commitments we have made to our shareholders over the past 18 months to build a stronger company, one that is fit to withstand and to take advantage of the period of prolonged commodity price volatility that we are experiencing.

We made some tough but necessary decisions with respect to capital, workforce reductions and dividends. We believe that these actions have positioned Cenovus to generate superior value for our shareholders over the long term.

Companywide, we remain on track to achieve up to $500 million in capital, operating and G&A cost reductions compared to our original 2016 budget. Of the cost reductions realized over the past 18 months,