Cenovus Energy Inc (CVE) Q4 2025 Earnings Call Highlights: Record Production and Strategic …

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Fri, February 20, 2026 at 8:00 AM GMT+9 4 min read

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**Upstream Production:** 834,000 BOE per day in 2025, up 3% from 2024; fourth quarter production at 918,000 BOE per day.

**Oil Sands Production:** Fourth quarter production at 727,000 BOE per day; December production over 970,000 BOE per day.

**Operating Margin:** Approximately $2.8 billion in the fourth quarter.

**Adjusted Funds Flow:** $2.7 billion in the fourth quarter.

**Oil Sands Non-Fuel Operating Costs:** Decreased to $8.39 per barrel in the fourth quarter.

**Downstream Operating Margin:** $149 million in the fourth quarter.

**Capital Investment:** Nearly $1.4 billion in the fourth quarter; full year capital spending of $4.9 billion.

**Net Debt:** Approximately $8.3 billion at the end of the fourth quarter.

**Shareholder Returns:** $1.1 billion in the fourth quarter, including $714 million in share buybacks and $380 million in dividends.

**Current Tax Recovery:** $189 million in the fourth quarter.

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Release Date: February 19, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Cenovus Energy Inc (NYSE:CVE) achieved a record upstream production of 834,000 BOE per day in 2025, marking the highest ever for the company.

The company successfully completed the acquisition of Meg Energy, adding over 100,000 barrels a day of top-tier resources, enhancing its heavy oil portfolio.

Cenovus Energy Inc (NYSE:CVE) reduced total upstream non-fuel operating costs by approximately 4% from the previous year.

The company completed significant growth projects, including the Narrows Lake tie-back and the Foster Creek optimization project, ahead of schedule.

Cenovus Energy Inc (NYSE:CVE) achieved a combined utilization rate of 95% across its Canadian and US refineries, with notable cost reductions in operating expenses.

Negative Points

The company faces potential volatility in WCS pricing due to egress challenges and reduced hedging from the WRB refining joint venture.

Cenovus Energy Inc (NYSE:CVE) is exposed to risks associated with market fluctuations, particularly in the US refining segment, which saw deteriorating crack spreads.

The timeline for the West White Rose project is tight due to challenging weather conditions, potentially impacting the Q2 2026 first oil target.

The integration of Meg Energy's assets requires significant operational adjustments and synergy realization efforts.

Cenovus Energy Inc (NYSE:CVE) has a substantial net debt of approximately $8.3 billion, partly due to the Meg acquisition, which may impact financial flexibility.

 






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Q & A Highlights

Q: What are the next steps for the recently acquired MEG Energy assets, and how will Cenovus apply its best practices to enhance performance? A: Jonathan McKenzie, COO, explained that Cenovus has quickly moved to capture corporate synergies from the MEG acquisition, including HR, commercial, and finance synergies. The focus for 2026 is on operational synergies, with plans to start a redevelopment program and apply Cenovus’s well design and operating practices to enhance production and cost savings. P. Andrew Dahlin, EVP of Safety & Operations Technical Services, added that they plan to drill 40 redevelopment wells and implement wider well spacing and longer wells to improve production and reduce costs.

Q: Can you elaborate on the use of solvent-enhanced oil recovery techniques at Lloydminster and its potential impact? A: Jonathan McKenzie, COO, stated that Cenovus is implementing a solvent project at Spruce Lake North, injecting condensate with steam to lower the steam-oil ratio, increase production, and enhance recovery. P. Andrew Dahlin, EVP, added that the project, with a capital investment of $250 million, is expected to come online in 2027 and could be applied to other oil sands assets in the future.

Q: What drove the significant increase in US market capture in the fourth quarter, and what are the expectations for market capture going forward? A: An unidentified company representative explained that the increase was due to improved reliability, allowing Cenovus to capitalize on market opportunities, and commercial optimization efforts. The company expects to maintain a market capture of around 70%, with seasonal variations, and continues to explore new market opportunities.

Q: How is Cenovus addressing concerns about egress and potential volatility in WCS pricing, especially with less WRB as a hedge? A: Jonathan McKenzie, COO, emphasized the importance of egress and a strong balance sheet. Jeff Murray, EVP of Commercial, noted that Cenovus has significantly reduced its exposure to Alberta sales and is actively pursuing egress opportunities, including potential long-term contracts, to maintain stable differentials and support growth.

Q: With the completion of the three-year growth plan, what are Cenovus’s future capital spending plans, and how will they balance growth with shareholder returns? A: Jonathan McKenzie, COO, stated that Cenovus will focus on brownfield developments and debottlenecking projects rather than major new projects. The company aims to maintain capital spending around $5 billion, including turnarounds, and expects 3-5% growth. Karamjit Sandhar, EVP, added that capital allocation will remain disciplined, with a focus on deleveraging and share buybacks.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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