Cenovus now expects to produce between 805,000 and 825,000 barrels of oil equivalent per day this year, down by 10,000 boe/d.AMBER BRACKEN/The Canadian Press
Cenovus Energy Inc. CVE-T has cut its production guidance as it deals with the fallout from a northern Alberta wildfire and a blowout at its Rush Lake facility in Lloydminster, Sask.
Chief executive Jon McKenzie told analysts on a Thursday morning earnings call that Cenovus has completely removed Rush Lake production volumes for the rest of the year “out of an abundance of caution and conservatism.”
The company now expects to produce between 805,000 and 825,000 barrels of oil equivalent per day this year, down by 10,000 boe/d. Second-quarter production came in at 765,900 barrels of oil equivalent per day, compared with 800,000 boe/d for the same quarter last year.
Cenovus has yet to complete its investigation into the cause of the May 7 incident at Rush Lake, but Mr. McKenzie said the company is confident that it was because of a casing failure on a well.
It resulted in billowing clouds of steam at the surface of the site and the closing of both Rush Lake assets. Prior to the shut in, the facilities had been producing about 18,000 barrels a day.
In mid-June, the company said in a statement it had stabilized the well. Mr. McKenzie said Thursday that Cenovus had moved to the recovery phase of the incident.
“We’ll work with the regulator and convince ourselves that we’ve got a good, safe startup plan,” he said.
Mr. McKenzie said the hit to production from the Rush Lake closing was partially offset by strong performance from the company’s other Lloydminster assets.
In late May, the Caribou Lake wildfire in northern Alberta forced the evacuation of more than 2,000 workers from the company’s Foster Creek and Christina Lake oil sands operations.
The blaze came within a couple of kilometres of Christina Lake, resulting in the shutdown of the facility, Mr. McKenzie said.
The site was down for about four days. Mr. McKenzie said restarting the facility was a monumental effort, which included draining and restarting more than 50 kilometres of steam pipelines, bringing 26 boilers back online, returning the co-generation power facility back to service and remobilizing all 2,000 workers.
It took 11 days to go “from a standing start to 250,000 barrels a day,” he said, which lost the company about two million barrels of production.
On the other side of Canada, Cenovus is getting ever closer to completing its West White Rose project off the coast of St. John’s, with first oil expected early in the second quarter of 2026.
The White Rose field sits around 350 kilometres east of St. John’s. It produces roughly 26,000 barrels a day, but that number is falling as its oil reserves decline. The expansion project will add about 75,000 barrels a day to production and extend the life of the field to 2038.
Cenovus floated a massive gravity-based structure for the project in May, and last month towed it to the field and attached it to the seabed floor – a milestone that Mr. McKenzie called “a feat of engineering.”
He said commissioning and hooking up the equipment will take about three months, with the first well drilled prior to the end of the year.
Cenvous reported it made $851-million in the second quarter, down from an even $1-billion in the same quarter last year.
With a report from The Canadian Press