(Reuters) Oil and gas producer Cenovus Energy Inc reported a 64% fall in second-quarter profit, and lowered total production outlook for 2023 as wildfires in Canada's main oil producing province Alberta forced companies to curtail output.
Cenovus Energy cuts production outlook due to impact from wildfires, profit slumps
A warning sign is pictured near wellheads that inject steam into the ground and pump oil out at the Cenovus Energy Christina Lake Steam-Assisted Gravity Drainage (SAGD) project.
Benchmark Brent crude averaged $79.92 a barrel in the second quarter, nearly 28% lower than a year earlier, pressuring earnings.
Some oil and gas companies in Alberta were also forced to re-curtail output as record-high temperatures and tinder-dry vegetation led to an intense, early start to the wildfire season in western Canada this year.
The fires caused more than 30,000 people to abandon their homes while oil and gas producers shut in at least 319,000 barrels of oil equivalent per day (boepd), or 3.7% of national production.
Cenovus lowered its 2023 upstream production outlook to between 775,000 barrels of oil equivalent per day (boepd) and 795,000 boepd, from its earlier forecast of 790,000 boepd and 810,000 boepd.
Quarterly upstream production fell 4.2% to 729,900 boepd from 762,000 boepd a year earlier due to the impact of wildfire and planned maintenance.
The Canadian energy firm said downstream throughput was 538,000 barrels per day (bpd), about 18% higher than a year earlier, as volumes ramped up after work was restarted at the Superior and Toledo refineries.
The Calgary, Alberta-based company reported a net income of $657.41 million, or 33 cents per share, for the quarter ended June 30, compared with $1.84 billion, or 90 cents per share, a year earlier.
Analysts had expected reported earnings per share of 31 cents.
"From where we sit, Cenovus Energy's largely in-line second-quarter results are not indicative of the company's execution capability — which we believe should surface in the second half of this year," said RBC Capital Market analyst Greg Pardy.
U.S.-listed shares rose 1.3% to $18.29 in premarket trade.
