Financial Data and Key Metrics Changes - In Q4 2025, Cenovus generated approximately CAD 2.8 billion of operating margin and CAD 2.7 billion of adjusted funds flow [20] - Operating margin in the upstream was over CAD 2.6 billion, consistent with the prior quarter, despite declining benchmark oil prices [20] - Oil sands non-fuel operating costs decreased to CAD 839 per barrel in Q4, over CAD 1.25 lower than the prior quarter [20] Business Line Data and Key Metrics Changes - Upstream production reached 834,000 BOE per day in 2025, a 3% increase from 2024, excluding the MEG Energy acquisition [8] - Q4 upstream production was 918,000 BOE per day, with oil sands production at 727,000 BOE per day, both records for the company [11] - Downstream operating margin was CAD 149 million in Q4, despite inventory holding losses and turnaround expenses [21] Market Data and Key Metrics Changes - The Canadian refining business achieved a crude throughput of 113,000 barrels per day in Q4, with a utilization rate of about 105% [18] - U.S. refining delivered crude throughput of 353,000 barrels per day, approximately 97% utilization [18] - Adjusted market capture was around 95% in Q4, reflecting the ability to capitalize on market opportunities [19] Company Strategy and Development Direction - Cenovus aims to leverage synergies from the MEG Energy acquisition, targeting CAD 150 million of annual synergies in 2026 and 2027, and over CAD 400 million by the end of 2028 [13] - The company is focused on brownfield development and optimization rather than large-scale projects, with a capital spending ceiling close to CAD 5 billion [99] - Cenovus is actively evaluating egress options to mitigate exposure to WCS volatility, with a significant shift in the percentage of crude sold in Alberta [68][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate potential risks associated with WCS volatility, citing improved egress options and a strong balance sheet [66][70] - The company anticipates continued operational momentum into 2026 and beyond, supported by recent production records and successful project completions [11][12] - Management highlighted the importance of safety and operational excellence as foundational to the company's strategy [5][26] Other Important Information - Cenovus completed the acquisition of MEG Energy, adding over 100,000 barrels a day of production capacity [10] - The company sold its interest in the WRB Refining joint venture, gaining full operational control of its downstream business [10] - Cenovus recognized a current tax recovery of CAD 189 million in Q4, primarily due to the integration of MEG's business [24] Q&A Session Summary Question: What are the next steps for the Mac asset acquired? - Management indicated that corporate synergies have been quickly realized, with a focus on operational improvements and a redevelopment program starting soon [33][34] Question: Can you elaborate on the solvent enhanced oil recovery techniques? - The Spruce Lake project involves injecting condensate along with steam to lower SOR and drive higher production, with a budget of CAD 250 million [42][43] Question: What drove the significant increase in U.S. market capture in Q4? - The increase was attributed to reliability improvements, market opportunities due to supply disruptions, and seasonal product mix advantages [52][54] Question: How does Cenovus plan to balance capital allocation between growth and shareholder returns? - The company plans to use 50% of free cash flow for deleveraging until net debt reaches CAD 6 billion, with the remaining 50% returned to shareholders [72][76]

Cenovus Energy (NYSE:CVE) Q4 2025 Earnings call February 19, 2026 11:00 AM ET Speaker10Good morning, everyone. Thank you for standing by, and welcome to Cenovus Energy's fourth quarter and full year 2025 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your touchtone telephone. As a reminder, this call is being recorded. ...