Canada-based oil and energy producer Cenovus Energy (TSE:CVE) (NYSE:CVE) said on Sunday that the headwinds that affected its output in the last quarter of 2022 will continue to affect its first quarter of 2023 as well.
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Extreme weather conditions, including winter storms at its U.S. and Canadian refining facilities, interfered with its downstream throughput in 4Q22 and are still persisting. This is expected to reflect in the 4Q earnings results that will tentatively be released on February 16, 2023.
Moreover, recent third-party pipeline outages also tampered with Cenovus’ post-production activities recently.
However, the good news is that the company’s Lima Refinery is now operating at full capacity, and Cenovus expects the Lloydminster Upgrader and Borger Refinery to start operating at full capacity in mid-January. Additionally, the Wood River Refinery, which is operating at around 65% capacity right now, is expected to ramp up production in 1Q23.
The company remains committed to the safety of employees, which explains why it is taking it slow when it comes to ramping up its production capacity in the winter. Cenovus has set aside $4 billion to $4.5 billion for investment in operations for 2023, which includes about $2.8 billion of sustaining capital to maintain safe, reliable, and continued operations.
Is Cenovus Energy a Good Buy?
Wall Street is bullish on Cenovus, with a Strong Buy rating based on eight Buys and one Hold. The average price target of C$33.65 indicates an upside potential of 32% in the next 12 months.
