Cenovus Energy (TSE:CVE) fell in today’s trading after Canada's second-largest independent oil producer swung to a first-quarter loss, disappointing Wall Street’s expectations, due to weak oil prices.
Shares declined 1.3 percent to C$22.84 at 1:53 p.m. in Toronto, expanding a rally over the past year to 31 percent.
Net loss was C$668 million, or C$0.86 per share, for the January-to-March quarter, compared with a profit of C$247 million, or C$0.33 per share, a year earlier, the Calgary, Alberta-based company said in a statement today.
The company reported an operating loss of 11 Canadian cents per share for the quarter ended March 31, bigger than the average analyst estimate of C$0.09, according to Capital IQ.
The operator of the Christina Lake and Foster Creek oil-sands projects in northern Alberta said the net loss was partly due to foreign exchange losses of $514 million.
Average realized prices for oil fell 47 percent to $37.66 per barrel in the first quarter and natural gas prices declined 25 per cent to $4.47 per thousand cubic feet.
Cenovus's cash flow, a key measure of its ability to pay for new projects and drilling, fell 45 percent to C$495 million.
But Cenovus said it has decreased its production costs across the board and raised $1.4 billion on markets to increase its financial resilience.
Total production rose 11 percent to 218,020 barrels of oil per day, while natural gas production fell nearly 3 percent.
Cenovus said today that it expects to increase production by 100,000 barrels a day by 2016, despite continued low prices.
The company’s chief executive officer said he is not interested in having a volatile dividend.
"We take a long-term view of the dividend and target a sustainable payout level," Reuters quoted Ferguson as saying on a conference call. "I do not want a variable dividend."