CVE

A month has gone by since the last earnings report for Suncor Energy (SU). Shares have added about 8.9% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Suncor Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers. Suncor Energy reported second-quarter 2026 adjusted operating earnings of $2.33 per share, which beat the Zacks Consensus Estimate of $2.14 by 8.9%. Moreover, the bottom line increased significantly from the year-ago quarter’s reported figure of 51 cents. The outperformance was driven by stronger downstream margins, higher upstream price realizations and increased refined product sales volumes. The Calgary, Alberta-based integrated oil and gas company’s operating revenues of $12.7 billion beat the Zacks Consensus Estimate of $10.3 billion by 22.4%. The top line also increased approximately 47.3% year over year, aided by record refined product sales, higher refinery production and stronger benchmark crack spreads. Suncor Energy’s board of directors declared a quarterly dividend of 60 Canadian cents per share for its common shareholders of record as of Sept. 4, 2026. The payout, which remains unchanged from the previous quarter, will be made on Sept. 25. During the quarter, the company distributed a total of C$1.8 billion to its shareholders, including over C$1 billion in share repurchases and over C$700 million in dividends. It generated C$5.3 billion in adjusted funds from operations and C$4 billion in free cash flow. During the second quarter, Suncor Energy delivered upstream production of 760,900 barrels per day (bbls/d), down from 808,100 bbls/d in the year-ago quarter. However, refining throughput reached a second-quarter record of 470,600 bbls/d, compared with 442,300 bbls/d a year earlier, while refined product sales rose to 654,800 bbls/d from 600,500 bbls/d in the prior-year period. Upstream: The company recorded a total production of 760,900 bbls/d, down from 808,100 bbls/d in the year-ago quarter. However, the figure beat the consensus estimate of 755,000 bbls/d. Total Oil Sands production was 690,100 bbls/d, down from 748,400 bbls/d in the year-ago quarter. Total Oil Sands bitumen production was 815,200 bbls/d, compared with 860,800 bbls/d in the prior-year period. This decrease was caused by the planned turnaround at Firebag. Net synthetic crude oil and diesel production increased to 482,200 bbls/d from 438,200 bbls/d a year earlier, driven by fewer maintenance activities in the current quarter. Non-upgraded bitumen production decreased to 207,900 bbls/d from 310,200 bbls/d, primarily due to increased upgrader availability and decreased bitumen production. Oil Sands adjusted operating earnings were C$2.6 billion, up from C$926 million in the prior-year quarter, backed by increased price realizations. Exploration and Production (E&P) production rose to 70,800 bbls/d from 59,700 bbls/d in the year-ago period, driven by strong production across assets. Adjusted operating earnings in the segment increased to C$465 million from C$165 million, primarily driven by higher sales volumes and stronger price realizations. Downstream: The segment was the key driver of the quarter’s strength. Refining and Marketing adjusted operating earnings surged to C$2.1 billion from C$404 million in the prior-year quarter, primarily fueled by higher benchmark crack spreads, a FIFO inventory valuation gain and increased refinery production and sales volumes. Refinery utilization was 92%, up from 87% in the prior-year quarter, reflecting Suncor Energy’s increased refining network nameplate capacity of 511,000 bbls/d. Refined product sales climbed to 654,800 bbls/d, a 9% increase from 600,500 bbls/d in the prior-year quarter, supported by global market opportunities, including record jet fuel sales, while also delivering more domestic volumes through high-value retail channels. Moreover, the figure beat the consensus estimate of 596,000 bbls/d. Total expenses increased 20% to C$12.6 billion from the prior-year quarter. The cost of purchases of crude oil and products increased to C$6.4 billion in the second quarter of 2026, compared with C$5.1 billion in the prior-year quarter. Operating, selling and general expenses increased 8.1% to C$3.4 billion from the prior-year quarter, and Exploration expenses increased to C$17 million compared with C$4 million in the previous-year quarter. Suncor Energy generated C$5.3 billion in adjusted funds from operations, up from C$2.7 billion in the prior-year quarter. Free funds flow increased to almost C$4 billion from C$981 million. The company returned nearly C$1.8 billion to its shareholders, including C$1 billion in share repurchases and over C$700 million in dividends. Capital expenditures totaled C$1.3 billion, decreasing from the year-ago quarter of C$1.6 billion. As of June 30, 2026, Suncor Energy had cash and cash equivalents of C$5.4 billion and long-term debt of C$9.2 billion. Its debt-to-capitalization was 16%. Suncor Energy’s 2026 corporate guidance targets total production of 840,000-870,000 bbl/d, including 785,000-810,000 bbl/d from Oil Sands and 55,000-60,000 bbl/d from Exploration and Production. Refinery throughput is expected at 460,000-475,000 bbl/d, with utilization of 90%-93% and refined product sales of 600,000-620,000 bbl/d. Capital expenditures are guided at C$5.6-C$5.8 billion, led by C$3.8-C$3.9 billion for Oil Sands. Cash operating costs are expected at C$26-C$29/bbl for Oil Sands operations, C$33-C$36/bbl at Fort Hills and C$34-C$37/bbl at Syncrude. The guidance assumes Brent at $87/bbl and WTI at $80/bbl, while the company highlights operational reliability, maintenance execution, commodity prices and infrastructure as key factors that could affect results. In the past month, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 39.17% due to these changes. Currently, Suncor Energy has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock has a score of A on the value side, putting it in the top 20% for value investors. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Suncor Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Suncor Energy is part of the Zacks Oil and Gas - Integrated - Canadian industry. Over the past month, Cenovus Energy (CVE), a stock from the same industry, has gained 18.3%. The company reported its results for the quarter ended June 2026 more than a month ago. Cenovus reported revenues of $12.59 billion in the last reported quarter, representing a year-over-year change of +41.4%. EPS of $1.11 for the same period compares with $0.33 a year ago. Cenovus is expected to post earnings of $0.83 per share for the current quarter, representing a year-over-year change of +59.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. Cenovus has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Suncor Energy Inc. (SU) : Free Stock Analysis Report Cenovus Energy Inc (CVE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Cenovus Energy (CVE). Shares have added about 4.6% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Cenovus due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Cenovus Energy Inc before we dive into how investors and analysts have reacted as of late. Cenovus Energy Inc. reported second-quarter 2026 adjusted earnings of $1.11 per share, matching the Zacks Consensus Estimate. The bottom line skyrocketed 233% from the year-ago figure of 33 cents per share. Quarterly revenues of $12.59 billion surpassed the consensus estimate of $9.57 billion by 31.6%. The top line increased 41.5% year over year from $8.90 billion a year earlier. Higher crude oil and refined-product pricing, along with increased Oil Sands volumes, supported the results. Oil Sands revenues surged 89.4% year over year to C$11.22 billion. The segment benefited from higher sales volumes and benchmark crude oil prices, partly reflecting additional production from the MEG Energy acquisition completed in November 2025. The unit’s operating margin increased to C$4.40 billion from the C$1.82 billion recorded a year earlier. Results were supported by redevelopment programs at Christina Lake, new sustaining well pads connected through the Narrows Lake tie-back and production gains from the Foster Creek optimization project. Conventional revenues increased 61.8% to C$869 million, while the segment’s operating margin rose to C$140 million from C$84 million. Offshore revenues advanced 54.3% to C$486 million from C$315 million, and operating margin improved to C$375 million from C$231 million. In the second quarter, the company recorded Oil Sands crude oil production of 783.8 thousand barrels per day (Mbbls/d), an increase from the year-ago quarter’s figure of 577.1 Mbbls/d. Oil Sands natural gas production was 15.6 million cubic feet per day (MMcf/d), lower than the 16.5 MMcf/d recorded a year ago. Oil Sands production volumes rose 35.6% to 786.4 thousand barrels of oil equivalent per day (Mboe/d) from 579.8 Mboe/d in the year-ago quarter. The company’s Conventional crude oil and natural gas liquids production was 28.9 Mbbls/d compared with 24.9 Mbbls/d a year ago. Conventional natural gas production was 535.9 MMcf/d, lower than the 569.2 MMcf/d recorded a year ago. Conventional volumes dipped 1.3% to 118.2 Mboe/d from 119.8 Mboe/d recorded in the second quarter of 2025. The company’s Offshore crude oil and natural gas liquids production was 22.8 Mbbls/d compared with 22.0 Mbbls/d a year ago. Offshore natural gas production was 258.3 MMcf/d, lower than the 265.7 MMcf/d recorded a year ago. Offshore production dipped 0.8% to 65.8 Mboe/d from the year-ago figure of 66.3 Mboe/d. The total upstream production in the reported quarter increased 26.7% to 970.4 Mboe/d from 765.9 Mboe/d in the year-earlier quarter. Cenovus’ Canadian Refining revenues increased 24.8% to C$1.61 billion. The segment generated an operating margin of C$182 million, up from C$107 million, despite a turnaround at the Lloydminster Upgrader. The U.S. Refining revenues rose 1.5% to C$6.55 billion. Operating margin improved sharply to C$771 million against a loss of C$178 million, supported by stronger refined-product pricing and reliable refinery operations. Higher Chicago gasoline, diesel and crack-spread benchmarks aided downstream profitability. Total downstream revenues increased to C$8.16 billion from C$7.74 billion a year ago, while operating margin rose to C$953 million against a loss of C$71 million a year ago. Total crude oil unit throughput declined 32.2% to 451.5 Mbbls/d. Canadian Refining throughput fell 9.5% to 101.7 Mbbls/d, while U.S. Refining throughput decreased 36.8% to 349.8 Mbbls/d. The decline primarily reflected the September 2025 divestiture of Cenovus’ interests in the Wood River and Borger refineries. The Upgrader turnaround also weighed on volumes. These factors reduced total downstream production by 31.7% to 498.3 Mbbls/d. Consolidated operating margin increased to C$5.87 billion from C$2.07 billion. Operating expenses declined 20.3% to C$1.39 billion from C$1.75 billion. However, general and administrative expenses rose to C$218 million from C$153 million, and the company recorded a C$163 million foreign exchange loss against a C$353 million gain a year earlier. Net earnings totaled C$2.87 billion compared with C$851 million in the prior-year quarter. Cash from operating activities increased to C$5.64 billion from C$2.37 billion, while adjusted funds flow was C$4.99 billion. Capital investment was C$1.20 billion, resulting in free funds flow of C$3.79 billion. Cenovus repaid the remaining C$2.20 billion under the term loan used to help fund the MEG acquisition. Net debt declined to C$5.39 billion at June 30, 2026, from C$8.06 billion at the end of March. Cash and cash equivalents totaled C$3.17 billion. Cenovus returned C$1.43 billion to shareholders during the quarter, including C$1.02 billion of share repurchases and C$411 million of dividends. The board also declared a third-quarter dividend of C$0.22 per common share. Management raised the midpoint of its 2026 upstream production guidance, citing strong Oil Sands performance and optimized turnaround activity at Foster Creek and Christina Lake. Total upstream production is expected to be between 970 Mboe/d and 1.01 million barrels of oil equivalent per day. Downstream throughput guidance was increased to a range of 435 Mbbls/d to 455 Mbbls/d, while the C$5.0-C$5.3 billion capital investment range was maintained. In the past month, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 49.55% due to these changes. At this time, Cenovus has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a score of A on the value side, putting it in the top 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Interestingly, Cenovus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cenovus Energy Inc (CVE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, July 29, 2026 at 11:00 a.m. ET Vice President, Investor Relations and Internal Audit - Patrick Read President and Chief Executive Officer - Jonathan McKenzie Executive Vice-President and Chief Financial Officer - Kam Sandhar Executive Vice President, Oil Sands - Andrew Dahlin Vice President, Corporate Development and Commercial - Jeffery Lawson Executive Vice President, Refining - Eric Zimpfer Operator: Good morning, everyone. Thank you for standing by, and welcome to Cenovus Energy's Second Quarter 2026 Results Conference Call. As a reminder, this call is being recorded. I would now like to turn the meeting over to Mr. Patrick Read, Vice President, Investor Relations and Internal Audit. Please go ahead, Mr. Read. Patrick Read: Thank you, operator. Good morning, everyone, and welcome to Cenovus' 2026 Second Quarter Results Conference Call. On the call this morning are CEO, Jon McKenzie; and CFO, Kam Sandhar, will take you through our results. Then we'll open the line for Jon, Kam and other members of the Cenovus management team to take your questions. Before getting started, I'll refer you to our advisories located at the end of today's news release. These describe the forward-looking information, non-GAAP measures and oil and gas terms referred to today. They also outline the risk factors and assumptions relevant to this discussion. Additional information is available in Cenovus' annual MD&A and our most recent AIF and Form 40-F. And as a reminder, all figures we referenced on the call today will be in Canadian dollars, unless otherwise indicated. For the question-and-answer portion of the call, please keep to one question with a maximum of one follow-up. You're welcome to rejoin the queue for any other follow-up questions you may have. For detailed modeling questions, please follow up directly with our Investor Relations team after the call. I will now turn the call over to Jon. Jon, please go ahead. Jonathan McKenzie: Great. And thank you, Patrick, and good morning, everyone. As always, I'd like to begin by recognizing our safety performance and those who protect our people and our assets each and every day. On May 19, we safely completed the Foster Creek enhanced sulfur recovery project ahead of schedule and on budget. This is the fourth major project our projects group has safely and economically delivered over the last 14 months. After 24 months and 600,000 hours of work, cost unit was put into service, marketing our first application of this technology in SAGD operations. The project improves how we manage Salford Foster Creek. It lowers chemical operating costs by $0.50 to $0.75 a barrel, supports regulatory compliance and removes about 700 trucks per year from the road at site. Most importantly, though, with an established track record of consistently bringing projects online, on time and on budget with outstanding safety performance, we continue to see our projects organization as a competitive advantage for Cenovus. So now turning to our results. This was another strong quarter for Cenovus, and we're well positioned for continued performance and growth through the remainder of 2026 and into 2027. Market conditions were supportive and our people ran our assets very well through the quarter. The outcome was our best quarterly financial result ever. In our Upstream business, production averaged more than 970,000 BOE per day this quarter. This included oil sands production of over 786,000 barrels per day exceeding the production record we set in the first quarter. We've continued that momentum into the third quarter with July monthly production for the company well on track to average over 1 million BOE per day. This will be the first month the company has achieved this milestone, which is a testament to the quality of our people and assets as well as our resilient culture. Our largest oil sand asset, Christina Lake, continues to be the most material contributor to our strong production performance. Production in the second quarter reached a new all-time high of 372,000 barrels per day, supported by the ramp-up of Narrows Lake and the initiation of the redevelopment well program at Christina Lake North. Narrows Lake continues to exceed its expectations and is now producing over 80,000 barrels per day, much earlier than planned. This is contributing to Christina Lake averaging about 400,000 barrels a day for the month of July. The Narrows Lake acid is one of the highest quality SAGD assets in the basin, and the growth we expected from Narrows Lake is coming much sooner than forecast. Notably, we reached that production rate we expected to get from the first 5 well pads from only the first 4 well pads and we expect to bring on the next Narrows well pad later this year. At Christina North, the integration work is progressing seamlessly. We have delivered on all the upfront commercial and corporate synergies and remain on track to increase production to 150,000 barrels a day by 2028. We're seeing production volumes from Christina Lake North respond well with current rates reaching above rated capacity of 110,000 barrels per day. As our redevelopment program progresses and with our first new pad since the acquisition now online and performing well and with the commissioning of the fifth OTSG later this year, we expect production from this field to increase in the second half of the year. In the third quarter, we will conduct a plant turnaround on Phase F and G at Christina Lake. As always, we continue to optimize the scope and execution of these major maintenance events to reduce the duration, cost and production cost. As a result, we've shortened the planned duration of the turnaround by 9 days and reduced the expected production loss by over 700,000 barrels, representing more than 20,000 barrels per day of increased production over the turnaround duration. The efficiency of our turnarounds in the oil sands has become a real competitive advantage for Cenovus. The redundancy, interconnectedness and isolation we have built into our plants over the past 2 decades, allows us to reduce the scope of scheduled turnarounds and optimize production inside the turnaround windows as well as under normal operating conditions. Combined with the optimization of the Foster Creek turnaround earlier this year, we are now on track to produce over 1.2 million more barrels than were budgeted during the turnarounds this year. This has been reflected in our revised annual guidance. At Foster Creek, production in the quarter was approximately 215,000 barrels a day. The asset exited the quarter at record production levels of 245,000 to 250,000 barrels a day which continued through July. As mentioned earlier, we also brought on a sulfur recovery unit well ahead of schedule, which is expected to reduce operating costs at Foster Creek by $0.50 to $0.75 per barrel. Moving to Sunrise. Production was nearly 66,000 barrels a day during the quarter, following the startup of the first well pad in the East development area. With continued strong performance at Sunrise, we are now regularly exceeding 70,000 barrels a day of production, a target originally planned for 2027. We're also seeing consistent contribution from our Lloydminster Thermal assets, where production averaged 103,000 barrels a day for the quarter. Strong results from the redevelopment program continues to deliver production ahead of our expectations at Spruce Lake, Pikes Peak, Valley. With the continued -- with the increased productivity, we are delivering at each of Christina Lake, Foster Creek and Sunrise, we are increasing our full year production guidance for the company to the range of 970,000 BOE to 1,010,000 BOE per day with no change to our capital investment guidance. We're also reducing unit cost guidance, reflecting higher production increased utilization rates and continued cost discipline. At West White Rose drilling of the first production well remains on track, and we expect to reach first oil in late Q3. At this point, we expect the increase in contributions from the East Coast to meaningfully support production growth and the cash flow profile. Now moving to the downstream business, strong operational availability across our assets saw us capitalize on a supportive pricing environment in the second quarter. The Canadian refining business delivered crude throughput of 102,000 barrels per day or utilization rate of roughly 94%. Operations in the quarter included scheduled maintenance on the second train of the hydrocracker at the Lloyd Upgrader, which was delivered under budget setting the stage for consistent operations in the second half of this year and all the way through 2027. In the U.S. refining business, market conditions were highly favorable in the second quarter, supported by low Midwest inventories, robust crack spreads and wider heavy oil differentials. Crude throughput averaged 350,000 barrels per day or approximately 96% utilization. The business continues to run well generating material adjusted cash flow for the company, and we are well prepared to execute the turnaround of the integrated unit in September, October this fall. All in all, Cenovus had a very strong quarter, and we expect that trend to continue as we continue to execute against our business plans. Now I'll turn it over to Kam to walk through our financial results. Kam Sandhar: Thanks, Jon, good morning, everyone. In the second quarter, we generated approximately $5.9 billion of operating margin and $5 billion of adjusted funds flow, both all-time highs for Cenovus. Upstream operating margin was over $4.9 billion, increasing from the prior quarter due to higher benchmark oil prices and increased oil sands production. As John mentioned, with stronger production volumes and cost performance across the business, we've updated our full year operating cost guidance with reductions to each of our oil sands, conventional and Asia Pacific costs. Our Oil Sands nonfuel operating costs were $828 a barrel, a reduction of almost $0.65 a barrel from the prior quarter. In our Conventional gas business, costs declined by nearly $0.50 per BOE quarter-over-quarter to $9.13 per BOE, reflecting an ongoing focus on cost control. In the Downstream, strong refined product pricing, widening heavy oil differentials supported a favorable margin environment. Operating margin was approximately $1 billion in the quarter, this included $144 million inventory holding gain between our Canadian and U.S. refining segments. That performance is supported by disciplined cost control and strong operational availability across our refining network. In the Canadian refining business, full year operating cost guidance is lowered by $1 per barrel to $11 per barrel at the midpoint, reflecting increased throughput guidance and lower repairs and maintenance. U.S. refining operating costs were $10.55 per barrel, almost $1.20 per barrel lower than the previous quarter, reflecting higher throughput volumes combined with lower energy and electricity prices. Adjusted market capture, as John mentioned, was 67% decreasing from the prior quarter with the rise in Midwest gasoline pricing and the lag in asphalt and secondary product prices. Capture is also impacted by temporary dislocations in domestic light crudes, including Bakken, Midland, WTI, which increased feedstock costs during the quarter. Capital investment in the second quarter was approximately $1.2 billion, supporting sustaining activity across the business alongside our in-flight growth projects at Christina Lake North, Sunrise, Foster Creek and West White Rose. We expect capital spend to be higher in the second half of the year as we continue to execute our program and maintenance activity increases with the planned turnaround at our Lima Refinery. Capital guidance for 2026 remains unchanged at $5 billion to $5.3 billion. With record adjusted funds flow in a nearly $700 million reduction in noncash working capital, net debt decreased to $5.4 billion at the at quarter end, representing a $2.7 billion reduction in 1 quarter. The reduction in working capital was partly driven by a $690 million increase in income tax payable due to our strong financial results. If commodity prices remain elevated, we expect income taxes payable to continue to increase in the second half of '26 before unwinding in the first quarter of '27. With our revised guidance, we expect cash taxes to be $2.3 billion to $2.6 billion, of which a significant portion will be paid in February of 2027. During the quarter, we fully repaid the remaining $2.2 billion outstanding on the term loan that was obtained as part of the MEG acquisition in November. Reflecting the strength of the quarter, total royalty and tax payments rose to $2.7 billion. Shareholder returns in the second quarter were $1.4 billion, including $1 billion in common share purchases through the NCIB and $411 million through common share dividends. These outcomes highlight the significant value created for all of our stakeholders, including meaningful contributions to the province and the government in Canada via royalties taxes returns to shareholders and ongoing debt reduction. As our net debt is now below $6 billion as per our revised financial framework we set out when we announced MEG will be increasing targeted shareholder returns to 75% of excess free funds over time while continuing to progress towards our long-term net debt target of $4 billion. Our shareholder returns targets should continue to be viewed as guidelines, and we will continue to exercise judgment, and maintain flexibility in where we allocate capital in a particular quarter to maximize value and focus on returns for our shareholders. I'll now turn the call back to Jon for some closing remarks. Jonathan McKenzie: Great. Thank you, Kam. So as I reflect on the quarter, what stands out is the consistency of our execution and the opportunities which our people continue to find to get more out of our assets. We would never apologize credit for a higher commodity price environment, but the key is to run well at last and capitalize on the opportunity. Across the business, we delivered on our commitments, outperformed our plans and built momentum for will be a strong second half of 2026. We're now seeing the payoff from years of disciplined investment and operational and technical focus. All of our growth projects in the oil sands are nearing or have exceeded full rates, while we continue to find ways to optimize performance. At the same time, our integrated business model continues to be an advantage. Our strong refinery availability provides reliable destination for our growing production, allowing us to capture the benefits of a robust downstream environment while minimizing our transportation costs and commitments. Now I'd be remiss if I did not also briefly address the trilateral agreement which members of the Oil Sands Alliance have entered into with the federal and Alberta governments earlier this month. While the MOU was only a first step, the agreement represents meaningful progress towards creating a competitive investment environment for Canada's vast oil sands resource base. Although the MOU still provides provisions for an uncompetitive carbon tax that uniquely burdens Canadian industry, it creates a framework for governments and industry to work together on production growth emissions reduction and expanded market access. Most importantly, by acknowledging and committing to the need to put a competitive policy and regulation in place to support meaningful growth in Canadian oil sands as well as appropriate fiscal frameworks to support political priorities on carbon capture, the agreement establishes an important foundation for future investment in development. Cenovus is committed to working with our partners in both the Canadian and Alberta governments to work towards definitive agreements to make this reality. What matters most is this agreement signals a willingness to work together to grow the oil and gas sector for the benefit of all Canadians. This is an important step to get our economy moving forward again, creating high-paying jobs for Canadians and generating tax and royalty revenue to support Canada's quality of life and standard of living. And while the opportunity set for industry is expanding, our approach will be unchanged, we'll continue to responsibly develop resources, support our communities in which we do business, be disciplined to allocate the use of capital and run our business to the long-term benefit of our shareholders and stakeholders. And with that, I'll open it up to questions. Operator: The first question is from Greg Pardy with RBC Capital Markets. Greg Pardy: And another really, really strong quarter. Good to see. Jon, within the release, what a little bit is just the sanctioning of the solvent-aided SAGD projects. I know it's -- I mean it's not nothing, right? It's 10,000, 15,000 barrels a day. What's your thinking about broader implementation of SAGD over time? Jonathan McKenzie: Yes. So Greg, we believe that solvent assisted SAGD has targeted application in some of the areas that we have within our portfolio. So this will be the first commercial application of that inside our portfolio. So you're quite right earlier in this year, we sanctioned the project in Spruce Lake to bring on kind of 10,000 barrels a day in 2028 time frame. What we expect from that is there may be broader application within the Narrows Lake portfolio and some of the other parts of our business. But as we've always been really clear about in this business, SOR is king, and this is a way to get the SOR down, get more volume for less time. And there's some applications, as I mentioned, across some of our portfolio. But Andrew, maybe you want to address a little bit or 2. P. Dahlin: Yes. No, happy to. Greg Yes, indeed, as Jon said, this is a targeted application of solvents and we're doing it in a high-quality reservoir in Saskatchewan Spruce Lake. And what we're really hoping to achieve here is actually a production increment of about 40% to 50% and an SOR reduction of about 30%. We see similar applications in high-quality reservoirs across our portfolio. But I think where our subsurface team is particularly excited is we also think that solvents could be a good fit for lower-quality resources. So for example, resources where you have thinner pay. So we're going in with this in a high confidence area. And then we're looking at how we can take that technology further into the next decade in more challenging reservoirs. Greg Pardy: Okay. Understood. And maybe just switching gears, staying on the ops side, as you mentioned that the shorter duration under currents now is becoming a big advantage. So the national question is, how have you done that? Perhaps what are you doing now that you weren't doing before? And is it as simple as really planning or it's like what's the special sauce behind that? Jonathan McKenzie: Yes. I think when people see the results, everybody looks for a special sauce. But what you have to remember is this is probably 2 decades worth of work in some of these plants now we're getting into the fourth and fifth turnaround cycle the way these plants were designed in the phased application that we built them, we've had the opportunity to create interconnectiveness, bypasses isolation and the like. So the first key any turnaround is getting as much work as you can out of the turnaround window and limiting scope that comes through isolation. And then with the jumpovers and the interconnectedness of the plants, we're able to reroute process streams to minimize the loss of production during the turnaround window. But this is not something that you do overnight. It's not something that happens overnight. One of the things that we think about, for example, is as we move to the Christina phase up, Phase G turnaround, we start thinking about what that's going to look like in 5 years, what are we going to do in this window to minimize the production impact in, I guess it would be 2031 turnaround when that scheduled turnaround comes up again. But this is something that happens through time and something you design into your plans when you build it and then you optimize it through time. I don't know if you have anything else you want to add on that? P. Dahlin: Yes. No, happy to, it's Andrew again. Jon and I were talking about that the other day. And I really think just to build on what John said, it really comes in sort of waves of things we've done. It starts off with the design of the plants, the scale of the plants and how we have multiple phases that we can leverage. Second thing is the cycle time of our turnarounds. We've done a lot of integrity management and condition-based monitoring over the years. So we now go cycle time 5-plus years of each of the turnarounds. So that's an important step, Greg. Then on the terms of -- the third leg would be kind of the scope of the work that we execute inside of the turnarounds, and we've really been able to reduce that by actually taking the work and spreading it over 365 days. So basically sprinkling it in during the operational time rather than in a turnaround. And then finally, and here are some kudos co-star operations team. Our operations team is doing a phenomenal job during the execution of the turnarounds themselves leveraging what Jon just spoke to. Quite a bit of confidence in that now. We obviously saw it at Foster Creek, where we had minimal production impact. We just guided you to a reduced impact of the turnaround coming up at Christina Lake. And then the other thing I'd just remind you, Greg, and everyone that we've got a pretty light turnaround cycle in the upstream business over the next few years. Just the way we've not been able to spread them out, you'll see sort of 1 or 2 lighter turnarounds each year. Operator: Next question is from Dennis Fong with CIBC. Dennis Fong: Congrats as well on a strong quarter as well as the continued momentum you're showcasing in ops. My first question here maybe continues on from Greg's question. So Christina Lake on the back of Narrows Lake success as well as the work that you do in Christina Lake North. You previously talked potentially about interconnecting the 2 processing facilities. Can you talk towards one, maybe the strategy and how that maybe evolved just on the back that you've seen it narrows as well as where you're seeing facility limits at either Christina Lake North or Christina Lake South? And how does that also optimize maybe the well development or how that shifted the well development and like the next well pad locations that you're thinking about drilling between the 2 assets? Jonathan McKenzie: It's kind of funny. You're asking us to give -- to front run our Investor Day in January. But we're actually working on the interconnectedness of Christina Lake North Garth and our Christina plant today. Andrew, maybe you're the best person to answer Dennis' question. P. Dahlin: Yes. I'll have a go. Maybe I'll take a giant step back and then kind of talk to the evolution of both Christina Lake and Christina Lake North and then how we're going to connect them. And the evolution of Christina Lake, you'll recall, Dennis, a couple of years ago, we were at 230,000, 235,000 barrels a day. We sanctioned the expansion and as well the tieback to Narrows Lake. And we've now taken Christina Lake production to close to 265,000, 270,000 barrels a day with Narrows Lake at 80,000 barrels a day plus. So we're seeing good performance there. Christina Lake still treating them separately at Q1, Q2 performance was in that sort of 105,000, 110,000 barrels a day. We're seeing that ramp up to probably towards 125,000 barrels a day by year-end, and that's a function of the redevelopment wells and as well the fifth OTSG coming on stream in Q4. And then we'll continue to grow Christina Lake up towards 150,000 barrels a day and beyond in 2028. Now that's kind of the status. Now when we did the deal, we spoke to our investors and yourselves about the opportunity we had to optimize the subsurface and even between the 2 areas. We're really going now, not wanting to front run too much, Dennis, but we're really looking at how can we also physically connect the plants. So back to my answer earlier to Greg on the turnaround performance and how we're utilizing the scale and the phases of the plant. We actually see an opportunity here to optimize and get more juice out of the surface facility by actually connecting all the various pieces between the 2 plants. So again, I complemented the ops group earlier. Here, it's the projects group and the technical expertise that just amazes me every day. And quite frankly, the plan, Dennis is Investor Day in January. That's where we're really going to showcase not only what we're going to do to drive further value in the subsurface, but also utilizing the surface infrastructure better. Jonathan McKenzie: Yes, Dennis, your question on plant constraints is kind of interesting as well because when we kind of look at Christina North, we've been feel limited for so long. And now with Narrows Lake coming on at these elevated rates, we've actually seen production rates this month at Christina Lake, not Christina Lake North, but just Christina Lake over 300,000 barrels a day. So what you will see is much higher Christina Lake production in July, and we expect for that to continue. But we're really just kind of evaluating right now what are the plant limitations that we have inside these facilities. And I think we're going to be surprised to the upside of it, and that's going to form part of our thinking as we start to integrate these plants and work towards one Christina Lake that has 2 interconnected plants as we work through the latter part of this decade. Dennis Fong: Definitely, definitely. I really appreciate that context from both of you. I wanted to shift to Sunrise and maybe carrying along with that thought around facility constraints. From the last quarter, you kind of suggested that one of the 2 trains was able to run at a very high capacity at Sunrise during some planned maintenance there. How do you think about, we'll call it, the go-forward development strategy around Sunrise. It seems like the facility, again, has a fair amount of ample capacity? Is it just how do you kind of maybe drive the cadence of well drilling to kind of further ramp that beyond the 70,000 barrel a day level, which you highlighted you just hit ahead of schedule? Jonathan McKenzie: Yes. We've done a lot of work on the Sunrise facility since we acquired 100% of it back in 2022. In the original design basis was 2 trains, A and B, each 30,000 barrels a day of capacity. We've had one train during turnaround conditions up to 52,000, 53,000 barrels a day, and we've done a lot of capacity testing through the last 4 years, a lot of debottlenecking and creating sort of that interconnectedness between the 2 to facilitate higher production rates. But we haven't really found the facility constraints there because we are, again, production constrained or feel constrained. So the only challenge for us is to continue to work that up. As I mentioned in my notes, we're regularly over 70,000 barrels a day today with the first of the Eastern well pads now online. We expect to bring on the second later this year. But that is something that we are going to continue to work through, continue to debottleneck and continue to kind of push the limits of where those constraints might manifest themselves today. But I think the short answer to your question is it's something higher than where we are today, but we're not really sure exactly where that's going to lie. P. Dahlin: Yes, I probably I can add one more color comment too is so indeed, we haven't pushed the boundary. So proud of the team for how to push the boundaries at FCCL. There's more to come here at Sunrise. So the subsurface team are doing it now by going out east and looking to develop a reservoir that's up to 50 meters thick. What we look at in the facility is how can we expand it and how can we expand it relatively efficiently from a capital point of view. And it looks to us at this stage that we have enough water treatment and oil treatment. And so what we need is more steam. So again, at Investor Day, we'll talk a bit more to kind of what our plans are there. Jonathan McKenzie: Yes. So again, in all these things, it's about getting the SOR down and getting your production up and finding out where those debottleneck opportunities might land. But we've got room to go there. Operator: Next question is from Menno Hulshof with TD Cowen. Menno Hulshof: I'll start with a question on the new production guidance range of just over 1 million BOE. Given that we're halfway through the year, what's the scenario where you hit the top end of the range or even eclipse it? And similarly, what would need to happen to only hit the bottom given you averaged 970 in the second quarter? Jonathan McKenzie: Yes. So maybe I'll start this and somebody else can kind of fill in some of my thinking on this. But what we try and give you, Menno, is a view to where we think P50 lies in terms of the future production guidance that we're giving you. And what's really clear to us is through a combination of the redevelopment programs better reservoir performance and better production coming from the well pads that we are bringing on. Production took a pretty significant jump in the month of July in particular at Christina Lake and in particular, at Foster Creek. So we would expect to be somewhere around 245 at Foster Creek and somewhere around 285 at Christina Lake. And as I mentioned, we've had days at Christina Lake, where we're over 300. So we think that the kind of 50,000 barrels a day increment that we've given is largely attributable to those 2 assets. Over and above that, we still expect to have increasing production from Sunrise. We mentioned it's up over 70,000 barrels a day pretty regularly right now, and we still expect to have increased production from the East Coast as we get to first oil as well as incremental production from Lloydminster and conventional. So in thinking through this, we want to give you sort of that P50 number where we've got sort of that equal chance of being above or below it, but it gives you I think, a balanced view of where we are inside the portfolio today and a balanced view of what we expect for the rest of this year and moving into 2027. Menno Hulshof: That all sounds very promising. I'll follow up with a question on basin condensate supply, given how topical it's become with the recent positive messaging on thermal growth from pretty much everybody. Can you remind us of how much condo you can really produce versus consume? And then more broadly, does future supply concern you at all? And are you hearing of any industry initiatives to boost it over the next, call it, 3 to 5 years? Jonathan McKenzie: Yes. So maybe I'll start this, and then Jeff can finish it. But we consume far more than we produce. I think we -- not including the Lloyd upgrader, I guess, in our conventional business, we're about 20,000 barrels a day, and we would consume about 240, 000, 240,000 barrels a day, much of which we bring from the U.S. So condensate supply is something that we think about a lot, and we think about where does it come from, but we have to remember as well as pricing really determines a lot of the availability of condensate. There are other light hydrocarbons we can use over and above the formal condensate supply. But going forward, as we grow, our condensate strategy actually figures into everything that we do in terms of allocating more capital to our heavy oil business. But Jeff? Jeffery Lawson: So Matt, I think it's a great question, particularly with some of the things John touched on around the MOU and the future potential growth. So to take your question in sort of 2 parts in sort of the short and medium term, there's lots of shock absorbers in the system to be able to bring diluent to bear that's through blending, bringing light into the condensate pool at upgraders throughout the province choosing to bring a product that is diluent rather than having it blended into synthetics. And there's a number of ways that this just resolves itself on a short-term basis month to month and week to week. I think you're speaking more to a longer-term structural thing. And the first on that is if growth is orderly and measured, I think we would expect to see price to drive the choice to produce condensate in Alberta. We've seen that over time with both ourselves and many other producers throughout the province being very price responsive and targeting rich grass when it's the right time to and targeting dry gas when it's the right time, too. So we'd see that being a price-based response. And then there has been pipeline creep through time where import pipelines have found new capacity, and that is an opportunity for the future. In the past, we've seen things like the development of the DRU, which recycles condensate in Alberta, and that's a potential for the future. And deeper into the past, we've seen things like structural rail bringing condensate in, and I don't know that we'll need to get there. I think we would try to see the market to resolve itself in advance. However, as we point out, if there is pretty significant growth in a more expedited basis, you'll see those sorts of projects be brought to bear sooner to be able to meet the demand. Operator: Next question is from Neil Mehta with Goldman Sachs. Neil Mehta: Jon, just love your perspective on this trilateral memorandum of understanding. I think -- when I think about some of your comments earlier this year to the comments on the call today, definitely feels like -- you feel like you've made a lot of progress on this. And so just practically from a Cenovus perspective, if you blue-sky this thing, what could it mean for the business in the early 2030s? Jonathan McKenzie: Well, I think one of the things that we've argued, Neil, is that we have to have a competitive regulatory and policy environment to attract capital into this industry going forward. I think with some of the impediments that came through policy and regulation, it became really difficult to attract capital into the oil sands business. I think that where we are today and what's been discussed and agreed on unlocks this business in terms of its investability. And I think that's something that's pretty exciting for Canada. This is probably the largest investment opportunity that we have as a country and to make it investable again and start to attract capital into this business without getting into specifics because I'm not at liberty for that, but it does it is pretty exciting for this industry. Neil Mehta: We'll look for more. West White Rose. It's finally here. It's been a journey Obviously, again, the top side on was a big deal last year, but it sounds like you're tracking for first oil by the end of the third quarter. What's left? Jonathan McKenzie: That's it. We're drilling the first production well now. So that well needs to be drilled and completed and get to first oil. And then what you'll see from us in the first well packages, a series of 6 other wells that we'll drill. But we're really excited about this, too. You're quite right. It's been a journey that predates us even buying Husky. It goes back a number of years before that. So to get this completely derisked and beyond the cusp of first production is something that we're pretty excited about and we've been waiting for, for quite a while. Neil Mehta: Congrats. Operator: Next question is from Patrick O'Rourke with ATB Cormark Capital Markets. Patrick O'Rourke: Congratulations on the record quarter here. Just wondering, with respect to the downstream and the Lima turnaround that's going to happen in the second half year, maybe if you could outline the sort of key activities and scopes there. And I'm just curious with where cracks have been and are today? And it sounds like the plan is to go forward as initially design, but would there be any thought to a reduction in scope or timing there? Eric Zimpfer: Thanks, Patrick. This is Eric. I appreciate the question. I think just thinking about the line of turnaround, Yes, it is something we've been focused quite a bit on. The team has worked very hard to be prepared for it. I really getting after the crude unit, the VAC unit, the isocracker the hydrocracker reformer and then a couple of the units. So it's a big chunk of work. And as I said, the team has been working really hard at it. I think you've been just building on some of the themes around getting after reliability and getting after isolation and making the facility and the units more accessible online to get after certain things as part of the scope. There's quite a bit inside the back tower that we're going to do and really look to make sure that we can maximize heavy crude through Lima by getting that back tower cleaned up, turned around and ready to go. I think as you said, it's obviously a very strong crack environment. We've done a good job, I think, across the downstream really in 2Q around trying to be as flexible as we can with some of our non-cycle lending outages and moving them where we can to really support the supply disruption and get our products to the market when the market needs it. Yes. It's something we'll continue to look at for Lima, but I see it's a big turnaround. We're ready for it, and our focus is on executing it safely and executing it well, and that's really where we are right now. Patrick O'Rourke: Okay. Great. And then we all sort of saw the license activity that came through in the Montney in the quarter here. Just curious about the strategy there. Could it become a bigger piece of the puzzle in the conventional unit? Or is this more so about filling up sort of unused facility capacity that you have right now? Jonathan McKenzie: Yes. I think the way to think about it, Patrick, is more of our capital this year has been directed towards our Montney positions vis-a-vis the Deep Basin. So we are -- we have some areas there that we're investing in largely in the liquids-rich portion as well as in the top area. But I think that's a progression that you'll see through time is continue to invest more or direct more of our conventional capital into the Montney area vis-a-vis the Deep Basin, and that's really just driven by economics and strategy. Operator: Next question is from Manav Gupta with UBS. Manav Gupta: I wanted to ask a broader question. With the Strait of Hormuz, and we don't exactly know the status of when it will open, and whether it be a perpetual block there or some kind of derisk risking over there, do you think there is a need for U.S. refining system to pull a little harder from the Canadian upstream operations. I mean we are seeing U.S. utilization of 97% right now. And globally, the utilizations are much lower because they're unable to source that crude. And what's making this happen is the crude coming down from Canada. And I understand there are some political tensions right now between the 2 countries. But going ahead, do you see U.S. refining system even more dependent on the Canadian crude, given what we are seeing in the geopolitical tensions out there. Jonathan McKenzie: I'm going to turn that question over to Jeff to answer. Jeffery Lawson: Well, that's pretty broad. What I would say is that aging crude has a really natural home in the U.S., and it's been finding its way there. There's the pipeline, there's a physical constraints that are what they are. and we see those pipelines running full and that pull continues to be there. Prices have been really interesting in the U.S. Gulf Coast. We've seen a high degree of variability as the straight is impacted it. I mean, we all watch benchmarks in WTI and Brent, something that's less observable is the -- where the physical barrel prices and where we see that is in the WCS differential at the Gulf. And that has been really variable as of late in the quarter, it was between minus 2 and minus 12. The reason I go to prices is that's the market telling us what the pull is. And when you see times of belief where there's more constraint in the straight you see prices get stronger, minus 2, when it seems to be that maybe tensions are easing, that comes off minus 12. And that is just the market telling us what to do. Through all of those times, however, we have seen a very similar locational differential between Canada and the Gulf Coast. And that just means there's been a steady constant pull. I'd actually go to a different place to answer your question, which is more around the structural egress opportunities that continue to come to market because that's going to be the governor on exactly how much Canadian crude goes to the south. We've seen a number of pipeline proposals come, a number of open seasons continue to be run. And that just is really what's telling me more about the interconnectivity between the 2 countries rather than purely something out of the straight. So I'm not sure if I dodged your question or answered it. but I do think it has a lot more to do with physical interconnections, and we continue to see that opportunity to expand looking into the future. Manav Gupta: And my quick follow-up is, I think last year, you did a very trip to Toledo refinery. And you laid out certain goals in terms of for the downstream business, we are seeing much stronger utilization. I'm just trying to understand from the point where you had set those goals for a further improvement in downstream. How are you tracking against your own goals? And where else could we see further improvement in your downstream business? Jonathan McKenzie: Yes. Yes, thanks for the question. I think as you said, the discussion we had last year at Toledo outlined where we saw the business moving to. And I think we've made really, really good progress. Really proud of what the team has done safety performance is really strong. I think reliability has really started to improve. And you're starting to see some of that optimization come through with a more reliable kit. And I think we're just really starting to get into some really exciting opportunities as we look at some of the growth potential of the portfolio. And so those are things like really getting after -- great Lakes expansion in terms of moving products to different markets and out of PADD 2, which is really seasonally congested. We're looking at how do you further optimize the value chain and I'm talking to both the oil value chain as well as the Ohio Valley system. And so getting the right crude blends into our refineries and really making sure that we're fully optimized on the upgrader, looking at the Ohio Valley and figuring out where there are opportunities within our naphtha systems to really get after the right cuts and really monetize that system the way we can seen, just low capital constraint opportunities, constrained busting opportunities really across the portfolio as we're identifying some of these reliability improvements. the team has done really, really well at placing more jet into the market. So we're seeing strength in Jet. So how do we pull more jet, how do we place more jet into the market? How do we find new market opportunities for that jet fuel I can go on and on, but I would say there's just a number of opportunities that once you start to unlock the reliability, it really unleashes what I believe is a really outstanding commercial team that has quite a bit of savviness that can find more and more opportunities to get additional dollars per barrel as we continue to take this kit forward. Jonathan McKenzie: Great. And thank you, operator. So this concludes our conference call. I'd just like to thank everybody for joining us. We obviously appreciate your interest in the company. So thank you very much, and have a great day. Operator: Thank you. This concludes today's program. You may all disconnect. Thank you for participating in today's conference, and have a great day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cenovus (CVE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Imperial Oil Limited IMO delivered a sharp second-quarter earnings improvement while lowering its 2026 refinery outlook, creating a mixed signal for investors. The central issue is whether weaker refinery guidance reflects short-lived operating disruptions or a more persistent limit on downstream cash generation. Downstream profitability held up despite lower physical volumes, but the revised targets raise the bar for execution in the second half of 2026. Imperial cut expected 2026 refinery throughput to 370,000-380,000 barrels per day from 395,000-405,000. It also reduced expected refinery utilization to 85%-88% from 91%-93%, a roughly 6% cut to the throughput outlook. The revision reflects higher unplanned downtime in the first half, a short-term rail-logistics constraint at Strathcona and mid-July downtime at Nanticoke. Those factors suggest the guidance reset is operational rather than demand-driven, but they still reduce the volume base supporting downstream earnings. Downstream net income climbed to C$787 million from C$322 million a year earlier. Improved market margins were the main driver, partly offset by turnaround impacts of about C$190 million. Image Source: Imperial Oil Limited Refinery throughput fell to 331,000 barrels per day from 376,000, while utilization declined to 76% from 87%. The gap between stronger earnings and weaker volumes shows how favorable margins protected profitability during a quarter with substantial refinery downtime. The major Strathcona crude-unit turnaround is complete after a 10-year run interval, and Imperial expects higher volumes and throughput in the second half now that its heaviest turnaround quarter is behind it. That makes the rest of 2026 an execution test for the revised guidance. Canadian peer Suncor Energy Inc. SU also relies on an integrated upstream and downstream model, and its second-quarter 2026 results highlighted record refining throughput and refined product sales. Cenovus Energy Inc. CVE similarly uses downstream integration, including Canadian refining tied to Lloydminster production and a U.S. refining portfolio focused on heavy conversion. Over the past year, Imperial Oil’s shares gained 48.7%, trailing Suncor Energy’s 57.2% gain and Cenovus Energy’s 92% increase. This performance gap suggests investors have rewarded Suncor and Cenovus more strongly, making Imperial’s ability to execute its revised refinery guidance increasingly important for its relative performance. Image Source: Zacks Investment Research Imperial is adding rail-handling capacity at Strathcona to relieve congestion identified as renewable diesel production ramped up, with completion targeted by year-end. Removing that bottleneck could help the refinery operate with fewer logistics constraints. Management also said it prioritized renewable diesel production because economics were favorable. That choice improved margins but reduced crude throughput, showing that downstream value creation does not always require maximizing conventional refinery volumes. The lower refinery outlook does not erase the second quarter’s earnings improvement, but it shifts attention toward whether post-turnaround operations can deliver the expected volume recovery. Investors now have clearer milestones to watch in throughput, utilization and the Strathcona rail fix. Imperial currently carries a Zacks Rank #3 (Hold), with a Value Score of B, Growth Score of B, Momentum Score of C and VGM Score of B. The B grades indicate favorable value, growth and combined characteristics, while the C Momentum Score is less supportive. With the stock at a Hold, evidence of sustained downstream recovery matters more than one strong quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Imperial Oil Limited (IMO) : Free Stock Analysis Report Suncor Energy Inc. (SU) : Free Stock Analysis Report Cenovus Energy Inc (CVE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Cenovus Energy (TSX:CVE) is back in focus after reporting Q2 2026 results that included higher sales and net income, raised full year production guidance, and increased cash returns through dividends and share repurchases. See our latest analysis for Cenovus Energy. The strong Q2 report, higher production guidance and increased shareholder returns have coincided with a sharp move in Cenovus Energy's share price, which is now at CA$40.83. The year to date share price return of 69.77% and 1 year total shareholder return of 101.30% indicate that momentum has been strong, while the 30 day share price return of 14.88% points to renewed buying interest in recent weeks. If Cenovus Energy's recent run has you rethinking your energy exposure, this could be a useful moment to look at other producers through our nuclear and power-focused 90 nuclear energy infrastructure stocks For Cenovus Energy, the recent jump in the share price sits alongside record earnings, higher production guidance and stepped up cash returns. Is this move mainly a re rating of the business or a burst of optimism that may fade? Cenovus Energy's most followed narrative pegs fair value at CA$45.84, which sits above the last close at CA$40.83 and frames the recent rally in a cash flow story. Read the complete narrative. Want to see what sits behind that cash flow focus? The narrative leans on production uplift, margin progress and a rerating on future earnings. The full breakdown outlines how revenue, profitability and the chosen discount rate line up to support a higher fair value. Result: Fair Value of CA$45.84 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Cenovus Energy's story could shift quickly if Canadian regulatory costs rise further or if oil sands projects face delays that pressure cash flow expectations. Find out about the key risks to this Cenovus Energy narrative. With Cenovus Energy caught between optimism and concern, this is a moment to act promptly and review the balance of potential risks and rewards for yourself using the 2 key rewards and 3 important warning signs. If Cenovus Energy has sharpened your focus on where to put fresh capital next, do not sit on the sidelines. Use this window to line up your next ideas. Spot potential mispriced opportunities early and scan 8 high quality undervalued stocks that pair solid fundamentals with room for sentiment to catch up. Prioritise resilience and review 9 resilient stocks with low risk scores that may offer more stable profiles when markets turn choppy. Hunt for future standouts before the crowd and filter the screener containing 10 high quality undiscovered gems that still fly under most radars. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CVE.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Cenovus Energy Inc. reported past second-quarter 2026 results with sales of C$17,427 million and net income of C$2,870 million, sharply higher than a year earlier, alongside stronger earnings per share. The company coupled this performance with higher 2026 production guidance, continued share buybacks, and a C$0.22 quarterly dividend, underlining its focus on scaling output while returning cash to investors. We’ll now examine how Cenovus’s raised 2026 production guidance and stronger profitability shape the company’s existing investment narrative. Find 8 companies with promising cash flow potential yet trading below their fair value. Cenovus’s core appeal rests on its integrated model and large oil sands base, which together can support substantial cash generation when conditions are favourable. The latest Q2 2026 beat and higher production guidance reinforce the current upside catalyst around volume growth and profitability, but they do not remove the central risk that long term Canadian regulation and carbon policy could still pressure high carbon oil sands economics and future project returns. Among the recent updates, the step up in 2026 upstream production guidance to 970–1,010 MBOE/d stands out. It directly connects to Cenovus’s near term catalyst of delivering higher volumes from Foster Creek, Christina Lake and other core assets while holding the capital budget steady. That same push to grow output also ties into a key risk: higher sustaining and growth capex needs that might one day compete with dividends and buybacks if conditions soften. Yet behind Cenovus’s strong Q2, investors should still be aware that regulatory shifts and long term oil sands exposure could... Read the full narrative on Cenovus Energy (it's free!) Cenovus Energy's narrative projects CA$57.3 billion revenue and CA$5.8 billion earnings by 2029. Uncover how Cenovus Energy's forecasts yield a CA$45.84 fair value, a 12% upside to its current price. Some analysts were far more optimistic before this Q2 beat, assuming revenue could reach about C$60.1 billion and earnings C$7.6 billion by 2029, so you may see their oil sands growth story and execution risk around projects like West White Rose in a very different light once this latest guidance is fully reflected. Explore 4 other fair value estimates on Cenovus Energy - why the stock might be worth just CA$45.84! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Cenovus Energy research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision. Our free Cenovus Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cenovus Energy's overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. Invest in the nuclear renaissance through our list of 90 elite nuclear energy infrastructure plays powering the global AI revolution. We've uncovered the 5 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CVE.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Cenovus Energy Inc. CVE used its second-quarter 2026 earnings call to highlight operational execution, stronger production trends and progress across major growth projects. Management emphasized that improved asset performance and cost discipline supported record financial results. The company reported earnings per share of $1.11 versus the consensus estimate of $1.11, while revenue came in at $12.59 billion compared with the Zacks Consensus Estimate of $9.57 billion. Cenovus Energy Inc price-consensus-eps-surprise-chart | Cenovus Energy Inc Quote CVE reported upstream production of 970.4 thousand barrels of oil equivalent per day in the quarter, including record Oil Sands production of 786.4 MBOE/d. Management said July production was on track to exceed one million BOE/d. CEO Jonathan McKenzie highlighted stronger performance at Christina Lake, Foster Creek and Sunrise as key contributors to production momentum. He noted that several assets were producing above previous expectations. The company increased full-year 2026 upstream production guidance to 970 MBOE/d to 1,010 MBOE/d, reflecting improved operating performance and optimized turnaround activity. Cenovus said Christina Lake production reached a quarterly record of 372.1 Mbbls/d, supported by Narrows Lake performance and redevelopment activity. Management expects further growth from the asset through 2028. Executives also discussed Sunrise, where production exceeded 70,000 barrels per day, ahead of earlier expectations. The company continues evaluating additional facility capacity and debottlenecking opportunities. Cenovus advanced its first commercial solvent-aided SAGD project, which management expects could improve production efficiency and reduce steam requirements at selected assets. CVE reduced operating cost guidance across several segments, including Oil Sands, Conventional and Asia Pacific operations. The company attributed improvements to higher production, utilization rates and continued cost controls.CFO Kam Sandhar said Oil Sands nonfuel operating costs declined quarter over quarter, while conventional gas costs also improved. Management emphasized disciplined execution across the portfolio. The company completed the Foster Creek enhanced sulfur recovery project ahead of schedule and on budget, with expected operating cost reductions of $0.50 to $0.75 per barrel. Cenovus generated $5 billion of adjusted funds flow and $3.8 billion of free funds flow in the second quarter. Net debt declined to $5.4 billion from $8.1 billion in the prior quarter. Management said the company repaid the remaining $2.2 billion term loan related to the MEG Energy acquisition. Shareholder returns totaled $1.4 billion through buybacks and dividends. The company plans to target approximately 75% of excess free funds flow for shareholder returns while continuing toward a long-term net debt target of $4 billion. CVE reported strong downstream performance, with U.S. Refining throughput reaching 349.8 Mbbls/d and crude unit utilization at 96%. Management cited favorable refining conditions and operational reliability. During Q&A, analysts asked about future refining optimization and the Lima turnaround. Management said reliability improvements are creating additional opportunities across the downstream portfolio. The company maintained 2026 capital guidance of $5 billion to $5.3 billion while continuing investments in Christina Lake North, Sunrise, Foster Creek and West White Rose. Cenovus management emphasized execution, operational improvements and capital discipline as central themes following the quarter. Executives said growth projects are progressing while maintaining flexibility in capital allocation. Analyst questions focused on production scalability, facility constraints and long-term growth opportunities. Management provided additional detail on asset optimization and future development plans. The company’s outlook remains centered on increasing production capacity, improving costs and strengthening shareholder returns through its integrated business model. CVE has a Zacks Rank #3 (Hold), meaning the stock currently carries a neutral ranking based on Zacks’ earnings estimate revision methodology. The Zacks Rank can change as analysts revise earnings estimates following quarterly results.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. CVE’s Style Scores are all rated A, including Value, Growth, Momentum and VGM Score. Zacks Style Scores evaluate individual investing characteristics, with higher grades representing stronger attributes in each category. The VGM Score combines Value, Growth and Momentum characteristics into a broader style assessment. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cenovus Energy Inc (CVE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Cenovus Energy stock has delivered a very strong run over the past five years, yet the current valuation checks suggest the shares are not a straightforward bargain. The stock carries a mixed value score and screens as expensive on market multiples even after this rally. Over the past 5 years, Cenovus Energy has returned about 372.9%, which puts extra focus on whether the current price still leaves enough room for long term returns to justify that move. Future project execution and the ability to convert revenue into steady cash flows can support the current share price, while any setback in cash generation or higher capital needs may limit how much investors are willing to pay for the stock. The company scores 4 out of 6 on Simply Wall St's broader valuation checks, which is a mixed picture rather than clearly cheap or clearly expensive, and you can see the detailed breakdown in the valuation section. For investors, the debate is whether Cenovus Energy's recent performance and current market pricing leave enough upside to compensate for the risks implied by its valuation checks. Cenovus Energy delivered 101.3% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry. The P/E ratio is a useful cross check for Cenovus Energy because it ties the share price directly to the earnings that support it. Cenovus Energy currently trades on a P/E of about 16.5x, which sits well below the Oil and Gas industry average of roughly 24.4x and the peer group average of about 25.4x. On simple comparisons, the stock does not look stretched against other producers in the sector. The valuation model that blends Cenovus Energy’s growth, margins, size and risk profile puts a fair P/E closer to 14.5x. That is lower than the current 16.5x. This means the shares trade at a premium to what this more tailored yardstick suggests. If you put weight on this framework rather than on raw industry averages, the current earnings multiple looks rich. On this P/E yardstick, Cenovus Energy stock screens as overvalued relative to the modelled fair multiple. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the Cenovus Energy valuation puzzle leaves off by spelling out which assumptions on future growth, margins and earnings would need to hold for the stock to be worth materially more or less than today's price, and they sit on the company's Community page. Each is framed as a thesis about Cenovus Energy's business that can be revisited over time rather than a one off snapshot. Community views on Cenovus Energy sit far apart, with one camp focused on project driven cash flow upside and the other on capital and policy risk. Bull case: 11% undervalued Read the full Bull Case to see why Cenovus Energy could be undervalued Bear case: roughly fairly valued Read the full Bear Case to see why Cenovus Energy could be overvalued Do you think there's more to the story for Cenovus Energy? Head over to our Community to see what others are saying! Cenovus Energy now screens as overvalued on the tailored P/E framework, even though the broader checks do not flag an extreme outcome. After such a strong five year run, the question is less about spotting a bargain and more about whether current cash flow and project delivery can support the existing multiple. The crux for investors is whether execution on major projects and capital discipline are strong enough to validate paying up for Cenovus Energy at today’s earnings valuation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CVE.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Cenovus Energy Inc. CVE reported second-quarter 2026 adjusted earnings of $1.11 per share, matching the Zacks Consensus Estimate. The bottom line skyrocketed 233% from the year-ago figure of 33 cents per share. Quarterly revenues of $12.59 billion surpassed the consensus estimate of $9.57 billion by 31.6%. The top line increased 41.5% year over year from $8.90 billion a year earlier. Higher crude oil and refined-product pricing, along with increased Oil Sands volumes, supported the results. Cenovus Energy Inc price-consensus-eps-surprise-chart | Cenovus Energy Inc Quote Oil Sands revenues surged 89.4% year over year to C$11.22 billion. The segment benefited from higher sales volumes and benchmark crude oil prices, partly reflecting additional production from the MEG Energy acquisition completed in November 2025. The unit’s operating margin increased to C$4.40 billion from the C$1.82 billion recorded a year earlier. Results were supported by redevelopment programs at Christina Lake, new sustaining well pads connected through the Narrows Lake tie-back and production gains from the Foster Creek optimization project. Conventional revenues increased 61.8% to C$869 million, while the segment’s operating margin rose to C$140 million from C$84 million. Offshore revenues advanced 54.3% to C$486 million from C$315 million, and operating margin improved to C$375 million from C$231 million. In the second quarter, the company recorded Oil Sands crude oil production of 783.8 thousand barrels per day (Mbbls/d), an increase from the year-ago quarter’s figure of 577.1 Mbbls/d. Oil Sands natural gas production was 15.6 million cubic feet per day (MMcf/d), lower than the 16.5 MMcf/d recorded a year ago. Oil Sands production volumes rose 35.6% to 786.4 thousand barrels of oil equivalent per day (Mboe/d) from 579.8 Mboe/d in the year-ago quarter. The company’s Conventional crude oil and natural gas liquids production was 28.9 Mbbls/d compared with 24.9 Mbbls/d a year ago. Conventional natural gas production was 535.9 MMcf/d, lower than the 569.2 MMcf/d recorded a year ago. Conventional volumes dipped 1.3% to 118.2 Mboe/d from 119.8 Mboe/d recorded in the second quarter of 2025. The company’s Offshore crude oil and natural gas liquids production was 22.8 Mbbls/d compared with 22.0 Mbbls/d a year ago. Offshore natural gas production was 258.3 MMcf/d, lower than the 265.7 MMcf/d recorded a year ago. Offshore production dipped 0.8% to 65.8 Mboe/d from the year-ago figure of 66.3 Mboe/d. The total upstream production in the reported quarter increased 26.7% to 970.4 Mboe/d from 765.9 Mboe/d in the year-earlier quarter. Cenovus’ Canadian Refining revenues increased 24.8% year over year to C$1.61 billion. The segment generated an operating margin of C$182 million, up from C$107 million, despite a turnaround at the Lloydminster Upgrader. The U.S. Refining revenues rose 1.5% to C$6.55 billion. Operating margin improved sharply to C$771 million against a loss of C$178 million, supported by stronger refined-product pricing and reliable refinery operations. Higher Chicago gasoline, diesel and crack-spread benchmarks aided downstream profitability. Total downstream revenues increased to C$8.16 billion from C$7.74 billion a year ago, while operating margin rose to C$953 million against a loss of C$71 million a year ago. Total crude oil unit throughput declined 32.2% year over year to 451.5 Mbbl/d. Canadian Refining throughput fell 9.5% to 101.7 Mbbl/d, while U.S. Refining throughput decreased 36.8% to 349.8 Mbbl/d. The decline primarily reflected the September 2025 divestiture of Cenovus’ interests in the Wood River and Borger refineries. The Upgrader turnaround also weighed on volumes. These factors reduced total downstream production by 31.7% to 498.3 Mbbl/d. Consolidated operating margin increased to C$5.87 billion from C$2.07 billion. Operating expenses declined 20.3% to C$1.39 billion from C$1.75 billion. However, general and administrative expenses rose to C$218 million from C$153 million, and the company recorded a C$163 million foreign exchange loss against a C$353 million gain a year earlier. Net earnings totaled C$2.87 billion compared with C$851 million in the prior-year quarter. Cash from operating activities increased to C$5.64 billion from C$2.37 billion, while adjusted funds flow was C$4.99 billion. Capital investment was C$1.20 billion, resulting in free funds flow of C$3.79 billion. Cenovus repaid the remaining C$2.20 billion under the term loan used to help fund the MEG acquisition. Net debt declined to C$5.39 billion at June 30, 2026, from C$8.06 billion at the end of March. Cash and cash equivalents totaled C$3.17 billion. Cenovus returned C$1.43 billion to shareholders during the quarter, including C$1.02 billion of share repurchases and C$411 million of dividends. The board also declared a third-quarter dividend of C$0.22 per common share. Management raised the midpoint of its 2026 upstream production guidance, citing strong Oil Sands performance and optimized turnaround activity at Foster Creek and Christina Lake. Total upstream production is expected to be between 970 MBOE/d and 1.01 million barrels of oil equivalent per day. Downstream throughput guidance was increased to a range of 435 MBOE/d to 455,000 MBOE/d, while the C$5.0-C$5.3 billion capital investment range was maintained. Cenovus currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy sector that have released their second-quarter 2026 earnings are NOV Inc. NOV, HF Sinclair Corporation DINO and Cactus, Inc. WHD. NOV sports a Zacks Rank #1 (Strong Buy), while DINO and WHD carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks Rank #1 stocks here. NOV reported second-quarter 2026 adjusted earnings of 31 cents per share, which topped the Zacks Consensus Estimate of 16 cents per share. As of June 30, 2026, NOV had long-term debt of $1.69 billion, and cash and cash equivalents of $1.16 billion. HF Sinclair reported second-quarter 2026 adjusted earnings of $5.31 per share, which beat the Zacks Consensus Estimate of $4.39 per share. As of June 30, 2026, DINO had total debt of $2.77 billion, and cash and cash equivalents of $2.26 billion. Cactus reported second-quarter 2026 adjusted earnings of 93 cents per share, which surpassed the Zacks Consensus Estimate of 71 cents per share. As of June 30, 2026, WHD had cash and cash equivalents of $365 million. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cenovus Energy Inc (CVE) : Free Stock Analysis Report NOV Inc. (NOV) : Free Stock Analysis Report Cactus, Inc. (WHD) : Free Stock Analysis Report HF Sinclair Corporation (DINO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CALGARY, Alberta, July 29, 2026 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) today announced its second-quarter 2026 financial and operating results. In the quarter, the company generated approximately $5.0 billion of adjusted funds flow and $3.8 billion of free funds flow. Operating results in the quarter included Upstream production of 970.4 thousand barrels of oil equivalent per day (MBOE/d)1 and Downstream crude throughput of 451.5 thousand barrels per day (Mbbls/d), representing an overall crude unit utilization rate of 95%. Highlights Delivered Upstream production of 970.4 MBOE/d, an increase of over 200 MBOE/d from Q2 2025. Record quarterly Oil Sands production of 786.4 MBOE/d, including record quarterly production at Christina Lake and Sunrise. Operated at a 95% crude unit utilization rate in the Downstream, with total crude throughput of 451.5 Mbbls/d and U.S. Refining adjusted market capture of 67%2. Increased full-year 2026 production guidance by 25 MBOE/d and decreased Oil Sands operating cost guidance by approximately 6%, as a result of strong performance across the Oil Sands assets and optimization of turnaround activity. Capital investment guidance is unchanged. Returned $1.4 billion to shareholders in the second quarter, including $1.0 billion through common share repurchases and $0.4 billion through common share dividends. “Through disciplined execution across the Upstream and Downstream, our people delivered outstanding operating performance and our best-ever quarterly financial results,” said Jon McKenzie, Cenovus President & Chief Executive Officer. “We are advancing toward sustained production of one million BOE per day, a milestone that underscores our consistent execution, the ingenuity of our staff and our strong commitment to safety.” Financial summary Production and throughput 1 See Advisory for production by product type and by reporting segment.2 Non-GAAP financial measure or contains a non-GAAP financial measure. See Advisory. Second-quarter results Operating1 Cenovus’s total revenues were $17.4 billion in the second quarter, up from $12.4 billion in the first quarter of 2026. Upstream revenues were $12.6 billion, an increase from $9.4 billion in the previous quarter, while Downstream revenues were $8.2 billion, an increase from $5.6 billion in the first quarter. Operating margin3 was $5.9 billion, compared with $4.4 billion in the prior quarter. Upstream operating margin4 was $4.9 billion, up from $3.7 billion in the prior quarter, as a result of higher benchmark oil prices and strong cost discipline. Downstream operating margin4 was $953 million, an increase from $734 million in the prior quarter, reflecting strong market crack spreads and upgrading differentials. Operating margin in the U.S. Refining segment was $771 million, which included a $152 million inventory holding gain. Total Upstream production was 970.4 MBOE/d, compared to 972.1 MBOE/d in the first quarter. Christina Lake production was 372.1 Mbbls/d, up from 358.9 Mbbls/d in the prior quarter as a result of strong well pad performance at Narrows Lake and continued progress on the redevelopment well program at Christina Lake North. Foster Creek production was 214.5 Mbbls/d, down from 223.0 Mbbls/d in the prior quarter as a result of an unplanned disruption in late May. Sunrise production was 65.7 Mbbls/d, up from 59.4 Mbbls/d in the prior quarter as a result of the strong ramp-up from the first well pad in the East development area. Production from the Lloydminster thermal assets was 103.1 Mbbls/d, compared with 102.3 Mbbls/d in the first quarter. Lloydminster conventional heavy oil output was 28.4 Mbbls/d, compared with 29.0 Mbbls/d in the prior quarter. Production in the Conventional segment was 118.2 MBOE/d, a decrease from 121.7 MBOE/d in the prior quarter, largely as a result of third-party maintenance. In the Offshore segment, production was 65.8 MBOE/d compared with 75.4 MBOE/d in the first quarter. In Asia Pacific, production was 51.2 MBOE/d, compared with 57.1 MBOE/d in the prior quarter due to planned maintenance in China and Indonesia. In the Atlantic region, production was 14.6 Mbbls/d, down from 18.3 Mbbls/d in the prior quarter as a result of turnaround activities at Terra Nova. Cenovus is on track to achieve an Upstream monthly production milestone in excess of one million BOE/d in the month of July. Total Downstream crude throughput in the second quarter was 451.5 Mbbls/d. Crude throughput in Canadian Refining was 101.7 Mbbls/d, representing a utilization rate of 94%, compared with 115.3 Mbbls/d in the prior quarter, as a result of a turnaround at the Lloydminster Upgrader. In U.S. Refining, crude throughput was 349.8 Mbbls/d, compared with 343.2 Mbbls/d in the first quarter, representing a crude unit utilization rate of 96%. U.S. Refining revenues were $6.5 billion, an increase from $4.2 billion in the prior quarter, reflecting higher refined product prices. Adjusted market capture in U.S. Refining was 67%, compared with 114% in the prior quarter, a result of expected seasonal refined product pricing impacts as well as elevated domestic light crude pricing. 3Non-GAAP financial measure. Operating margin is the total of Upstream operating margin plus Downstream operating margin. See Advisory.4Specified financial measure. See Advisory. Financial Cash from operating activities in the second quarter increased to $5.6 billion from $2.2 billion in the first quarter. Adjusted funds flow was $5.0 billion, compared with $3.4 billion in the prior quarter, and free funds flow was $3.8 billion, compared with $2.2 billion in the prior quarter, driven by higher commodity prices and strong operational performance. Net earnings increased to $2.9 billion from $1.6 billion in the prior quarter. Long-term debt, including the current portion, was $8.6 billion as at June 30, 2026. During the quarter, the remaining $2.2 billion outstanding on the term loan facility obtained to fund a portion of the cash consideration for the MEG Energy Corp. acquisition was fully repaid and subsequently cancelled. Net debt was $5.4 billion as at June 30, 2026, a decrease of $2.7 billion from the prior quarter, as a result of strong financial results and a $0.7 billion decrease in non-cash working capital. In the second quarter, the company achieved its interim net debt threshold of $6 billion. While net debt is between $6.0 billion and $4.0 billion, the company will target to return approximately 75% of excess free funds flow to shareholders over time. The company continues to steward toward a long-term net debt target of $4.0 billion. Growth projects At Christina Lake North, the facility expansion project continues to progress, and the first of two new steam generators is expected to be brought online by year-end. In addition, the redevelopment well program is proceeding to plan and production is expected to increase in the second half of 2026. At Foster Creek, the enhanced sulphur recovery project, which is expected to reduce operating costs by $0.50 to $0.75 per barrel, was successfully completed and brought online within the quarter. Cenovus’s first commercial diluent solvent aided process project was sanctioned in the first quarter of 2026 with fabrication and earthworks underway in Q2. The project is expected to add 5 to 10 Mbbls/d of production by 2028. At West White Rose, drilling of the first well continues to progress and the project remains on track for first oil in late Q3. 2026 guidance update Cenovus has revised its 2026 corporate guidance to reflect the company’s updated outlook for the remainder of the year. It is available on cenovus.com under Investors. Changes to the company’s 2026 guidance include: Total upstream production raised to a range of 970 MBOE/d to 1,010 MBOE/d, an increase of 25 MBOE/d. This includes the impacts of strong performance in the Oil Sands and optimization of turnaround activity at Foster Creek and Christina Lake. Decreased overall Upstream operating cost guidance, including reductions to Oil Sands, Conventional and Asia Pacific as a result of higher production and lower costs. Revised operating cost guidance ranges are as follows: Canadian Refining throughput raised to a range of 110 Mbbls/d to 115 Mbbls/d, an increase of 5 Mbbls/d at the midpoint, and Canadian Refining per-unit operating expenses decreased to a range of $10.50/bbl to $11.50/bbl, reflecting strong year-to-date performance. The company has also updated its commodity price assumptions and guidance range for cash taxes. There has been no change to the expected capital investment range of $5.0 billion to $5.3 billion. Dividend declarations and share purchases The Board of Directors has declared a quarterly base dividend of $0.22 per common share, payable on September 29, 2026, to shareholders of record as of September 15, 2026. All dividends paid on Cenovus’s common shares will be designated as “eligible dividends” for Canadian income tax purposes. Declaration of dividends is at the sole discretion of the Board and will continue to be evaluated on a quarterly basis. In the second quarter, the company returned $1.4 billion to shareholders, composed of $1.0 billion from its purchase of 26.2 million common shares through its normal course issuer bid and $0.4 billion through common share dividends. 2026 planned maintenance The following table provides details on planned maintenance activities at Cenovus assets in 2026 and anticipated production or throughput impacts. Potential quarterly production/throughput impact (MBOE/d or Mbbls/d) Conference call today Cenovus will host a conference call today, July 29, 2026, at 9 a.m. MT (11 a.m. ET). To participate in the conference call, please register in advance of the call start time. Once registered, you will receive a unique PIN that can be used to access the call by phone. You can either dial into the conference call using the unique PIN or select the "Call Me" option to receive an automated call. A live audio webcast of the conference call will be available and will remain archived for approximately 30 days. Advisory Basis of Presentation Cenovus reports financial results in Canadian dollars and presents production volumes on a net to Cenovus before royalties basis, unless otherwise stated. Cenovus prepares its financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (the IFRS Accounting Standards). Barrels of Oil Equivalent Natural gas volumes have been converted to BOE on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil compared with natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is not an accurate reflection of value. Product types Forward‐looking Information This news release contains certain forward‐looking statements and forward‐looking information (collectively referred to as “forward‐looking information”) within the meaning of applicable securities legislation about Cenovus’s current expectations, estimates and projections about the future of the company, based on certain assumptions made in light of the company’s experiences and perceptions of historical trends. Although Cenovus believes that the expectations represented by such forward‐looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Forward‐looking information in this document is identified by words such as “anticipate”, “continue”, “deliver”, “drive”, “expect”, “on track”, “payable”, “progress”, “remain”, “steward”, “target”, and “will” or similar expressions and includes suggestions of future outcomes, including, but not limited to, statements about: advancing towards sustained production milestone of one million BOE/d; commitment to safety; achieving an Upstream monthly production milestone in excess of one million BOE/d in the month of July; targeting to return approximately 75% of EFFF to shareholders over time; stewarding towards our long-term net debt target; Christina Lake North facility expansion project and redevelopment well program progress; expectation of operating cost reduction at Foster Creek; continued development of the eastern area and bringing a second pad online in the third quarter at Sunrise; additional production expected by 2028 from the diluent solvent aided process project; timing of first oil from the West White Rose project; future dividend payments; and 2026 planned maintenance and production/throughput impacts. Developing forward‐looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Cenovus and others that apply to the industry generally. The factors or assumptions on which the forward‐looking information in this news release are based include, but are not limited to the assumptions inherent in Cenovus’s updated 2026 corporate guidance available on cenovus.com. The risk factors and uncertainties that could cause actual results to differ materially from the forward‐looking information in this news release include, but are not limited to: changes to general economic, market and business conditions; the accuracy of estimates regarding commodity production and operating expenses, inflation, taxes, royalties, capital costs and currency and interest rates; risks inherent in the operation of Cenovus’s business; and risks associated with climate change and Cenovus’s assumptions relating thereto and other risks identified under “Risk Management and Risk Factors” and “Advisory” in Cenovus’s Management’s Discussion and Analysis (MD&A) for the year ended December 31, 2025. Except as required by applicable securities laws, Cenovus disclaims any intention or obligation to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward‐looking information. For additional information regarding Cenovus’s material risk factors, the assumptions made, and risks and uncertainties which could cause actual results to differ from the anticipated results, refer to “Risk Management and Risk Factors” and “Advisory” in Cenovus’s MD&A for the periods ended December 31, 2025 and June 30, 2026 and to the risk factors, assumptions and uncertainties described in other documents Cenovus files from time to time with securities regulatory authorities in Canada (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and Cenovus’s website at cenovus.com). Specified Financial Measures This news release contains references to certain specified financial measures that do not have standardized meanings prescribed by IFRS Accounting Standards. Readers should not consider these measures in isolation or as a substitute for analysis of the company’s results as reported under IFRS Accounting Standards. These measures are defined differently by different companies and, therefore, might not be comparable to similar measures presented by other issuers. For information on the composition of these measures, as well as an explanation of how the company uses these measures, refer to the Specified Financial Measures Advisory located in Cenovus’s MD&A for the periods ended December 31, 2025 and June 30, 2026 (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and on Cenovus's website at cenovus.com), which is incorporated by reference into this news release. Upstream Operating Margin and Downstream Operating Margin Upstream Operating Margin and Downstream Operating Margin, and the individual components thereof, are included in Note 1 of the interim Consolidated Financial Statements. Operating Margin Operating Margin is the total of Upstream Operating Margin plus Downstream Operating Margin. 5 Found in Note 1 of the June 30, 2026, or the March 31, 2026, interim Consolidated Financial Statements.Adjusted Funds Flow, Free Funds Flow and Excess Free Funds Flow (EFFF) The following table provides a reconciliation of cash from (used in) operating activities found in Cenovus’s interim Consolidated Financial Statements to Adjusted Funds Flow, Free Funds Flow and EFFF. Adjusted Funds Flow per Share – Basic and Adjusted Funds Flow per Share – Diluted are calculated by dividing Adjusted Funds Flow by the respective basic or diluted weighted average number of common shares outstanding during the period and may be useful to evaluate a company’s ability to generate cash. 6 Found in the June 30, 2026, or the March 31, 2026, interim Consolidated Financial Statements. Adjusted Market CaptureAdjusted market capture contains a non-GAAP financial measure and is used in the company’s U.S. Refining segment to provide an indication of margin captured relative to what was available in the market based on widely-used benchmarks. Cenovus defines adjusted market capture as refining margin, net of holding gains and losses, divided by the weighted average 3-2-1 market benchmark crack, net of RINs, expressed as a percentage. The weighted average crack spread, net of RINs, is calculated on Cenovus’s operable capacity-weighted average of the Chicago and Group 3 3-2-1 benchmark market crack spreads, net of RINs. 7 Found in Note 1 of the June 30, 2026, or the March 31, 2026, interim Consolidated Financial Statements. Cenovus Energy Inc. Cenovus Energy Inc. is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The company is committed to maximizing value by developing its assets in a safe, responsible and cost-efficient manner, integrating sustainability considerations into its business plans. Cenovus common shares are listed on the Toronto and New York stock exchanges. For more information, visit cenovus.com. Find Cenovus on Facebook, LinkedIn, YouTube and Instagram. 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