Cenovus Case Study Financial Management

In addition, Cenovus aims to achieve 60% in cost reductions to improve sustainability which can overall increase oil rates per well (Corporate Update, 2017). Cenovus also aims to achieve 6% annualized production growth with 28 wells to be drilled (Corporate Update, 2017). To improve investor confidence, Cenovus need to reduce debt by $4.5 billion by January 2018 and to manage $1.3 billion 2019 debt maturity by refinancing (Corporate Update, 2017). If successful, Cenovus is hopeful to improve its credit rating. But most importantly, revenue increase depends on oil extraction efficiency. Cenovus need to focus its innovative efforts in to generate a low SOR which will strategically benefit the firm financially. This means low capital cost, energy usage, operating cost, lower emissions, and less water

The expansive land in the Deep Basin allows for greater acreage and more development activity. To increase competitive advantage, Cenovus should focus on the development of existing assets (see Appendix Figure 5) due to their combined expanding potential and high industry activity levels (Corporate Update, 2017) which creates greater financial value for the firm. Strategically, this is a strategic move towards creating shareholder value from high quality and low-risk locations. As of 2017, Cenovus identified 500 potential drilling opportunities (see Appendix Figure 4; Corporate Update, 2017). In terms of opportunities, Cenovus need to strategically focus on optimizing infrastructure providers and takeaway capacity (Corporate Update, 2017). The former provides a cost advantage and the latter provides flexibility. Cenovus should also increase future market access by focusing geographically on acquiring pipeline expansions such as the US Gulf Coast Keystone XL and the West Coast Trans Mountain Expansion to decrease its transport limitation as seen in SWOT