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Debt and Capital Structure | 12 Months Ended
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Dec. 31, 2023
Borrowings [abstract] |
Debt and Capital Structure |
25. DEBT AND CAPITAL STRUCTURE
For the year ended December 31, 2023, the annualized weighted average interest rate on outstanding debt, including the Company’s proportionate share of short-term borrowings, was 4.7 percent (2022 – 4.7 percent). A) Short-Term Borrowings
As at December 31, | Notes |  | 2023 |  | 2022
Uncommitted Demand Facilities | i |  | — |  | —
WRB Uncommitted Demand Facilities | ii |  | 179 |  | 115
Total Debt Principal |  |  | 179 |  | 115
i) Uncommitted Demand Facilities As at December 31, 2023, the Company had uncommitted demand facilities of $1.7 billion (December 31, 2022 – $1.9 billion) in place, of which $1.4 billion may be drawn for general purposes, or the full amount may be available to issue letters of credit. As at December 31, 2023, there were outstanding letters of credit aggregating to $364 million (December 31, 2022 – $490 million) and no direct borrowings. ii) WRB Uncommitted Demand Facilities WRB has uncommitted demand facilities of US$450 million that may be used to cover short-term working capital requirements, of which Cenovus’s proportionate share is 50 percent. As at December 31, 2023, US$270 million was drawn on these facilities, of which Cenovus’s proportionate share was US$135 million (C$179 million). As at December 31, 2022, Cenovus’s proportionate share of the capacity was US$225 million and US$85 million (C$115 million) of this capacity was drawn. B) Long-Term Debt
As at December 31, | Notes |  | 2023 |  | 2022
Committed Credit Facility (1) | i |  | — |  | —
U.S. Dollar Denominated Unsecured Notes | ii |  | 5,028 |  | 6,537
Canadian Dollar Unsecured Notes | ii |  | 2,000 |  | 2,000
Total Debt Principal |  |  | 7,028 |  | 8,537
Debt Premiums (Discounts), Net, and Transaction Costs |  |  | 80 |  | 154
Long-Term Debt |  |  | 7,108 |  | 8,691
(1)The committed credit facility may include Bankers’ Acceptances, secured overnight financing rate loans, prime rate loans and U.S. base rate loans. i) Committed Credit Facility As at December 31, 2023, the Company had in place a committed credit facility that consists of a $1.8 billion tranche maturing on November 10, 2025, and a $3.7 billion tranche maturing on November 10, 2026. As at December 31, 2023, no amount was drawn on the credit facility (December 31, 2022 – $nil). ii) U.S. Dollar Denominated and Canadian Dollar Denominated Unsecured Notes For the year ended December 31, 2023, the Company purchased US$1.0 billion (2022 – US$2.6 billion and C$750 million) in principal of its outstanding unsecured notes. The principal amounts of the Company’s outstanding unsecured notes are:
| 2023 |  | 2022
As at December 31, | US$ Principal |  | C$ Principal and Equivalent |  | US$ Principal |  | C$ Principal and Equivalent
U.S. Dollar Denominated Unsecured Notes |  |  |  |  |  |  |
5.38% due July 15, 2025 | 133 |  | 176 |  | 133 |  | 181
4.25% due April 15, 2027 | 373 |  | 493 |  | 373 |  | 505
4.40% due April 15, 2029 | 183 |  | 241 |  | 240 |  | 324
2.65% due January 15, 2032 | 500 |  | 661 |  | 500 |  | 677
5.25% due June 15, 2037 | 333 |  | 441 |  | 583 |  | 790
6.80% due September 15, 2037 | 191 |  | 253 |  | 387 |  | 524
6.75% due November 15, 2039 | 652 |  | 862 |  | 935 |  | 1,267
4.45% due September 15, 2042 | 91 |  | 121 |  | 97 |  | 131
5.20% due September 15, 2043 | 27 |  | 36 |  | 29 |  | 39
5.40% due June 15, 2047 | 569 |  | 752 |  | 800 |  | 1,083
3.75% due February 15, 2052 | 750 |  | 992 |  | 750 |  | 1,016
| 3,802 |  | 5,028 |  | 4,827 |  | 6,537
Canadian Dollar Unsecured Notes |  |  |  |  |  |  |
3.60% due March 10, 2027 |  |  | 750 |  |  |  | 750
3.50% due February 7, 2028 |  |  | 1,250 |  |  |  | 1,250
|  |  | 2,000 |  |  |  | 2,000
Total Unsecured Notes |  |  | 7,028 |  |  |  | 8,537
C) Mandatory Debt Payments
| U.S. Dollar Unsecured Notes |  | Canadian Dollar Unsecured Notes |  | Total
As at December 31, 2023 | US$ Principal |  | C$ Principal Equivalent |  | C$ Principal |  | C$ Principal and Equivalent
2024 | — |  | — |  | — |  | —
2025 | 133 |  | 176 |  | — |  | 176
2026 | — |  | — |  | — |  | —
2027 | 373 |  | 493 |  | 750 |  | 1,243
2028 | — |  | — |  | 1,250 |  | 1,250
Thereafter | 3,296 |  | 4,359 |  | — |  | 4,359
| 3,802 |  | 5,028 |  | 2,000 |  | 7,028
D) Capital Structure Cenovus’s capital structure consists of shareholders’ equity plus Net Debt. Net Debt includes the Company’s short-term borrowings, and the current and long-term portions of long-term debt, net of cash and cash equivalents and short-term investments. Net Debt is used in managing the Company’s capital structure. The Company’s objectives when managing its capital structure are to maintain financial flexibility, preserve access to capital markets, ensure its ability to finance internally generated growth and to fund potential acquisitions while maintaining the ability to meet the Company’s financial obligations as they come due. To ensure financial resilience, Cenovus may, among other actions, adjust capital and operating spending, draw down on its credit facilities or repay existing debt, adjust dividends paid to shareholders, purchase the Company’s common shares or preferred shares for cancellation, issue new debt, or issue new shares. Cenovus monitors its capital structure and financing requirements using, among other things, Total Debt, Net Debt to adjusted earnings before interest, taxes and DD&A (“Adjusted EBITDA”), Net Debt to Adjusted Funds Flow and Net Debt to Capitalization. These measures are used to steward Cenovus’s overall debt position as measures of Cenovus’s overall financial strength. Cenovus targets a Net Debt to Adjusted EBITDA ratio and a Net Debt to Adjusted Funds Flow ratio of approximately 1.0 times and Net Debt at or below $4 billion over the long-term at a WTI price of US$45.00 per barrel. These measures may fluctuate periodically outside this range due to factors such as persistently high or low commodity prices. On November 3, 2023, Cenovus filed a base shelf prospectus that allows the Company to offer, from time to time, debt securities, common shares, preferred shares, subscription receipts, warrants, share purchase contracts and units in Canada, the U.S. and elsewhere as permitted by law. The base shelf prospectus will expire in December 2025. Offerings under the base shelf prospectus are subject to market conditions on terms set forth in one or more prospectus supplements. Net Debt to Adjusted EBITDA
As at December 31, | 2023 |  | 2022 |  |
Short-Term Borrowings | 179 |  | 115 |  |
Current Portion of Long-Term Debt | — |  | — |  |
Long-Term Portion of Long-Term Debt | 7,108 |  | 8,691 |  |
Total Debt | 7,287 |  | 8,806 |  |
Less: Cash and Cash Equivalents | (2,227) |  | (4,524) |  |
Net Debt | 5,060 |  | 4,282 |  |
Net Earnings (Loss) | 4,109 |  | 6,450 |  |
Add (Deduct): |  |  |  |  |
Finance Costs | 671 |  | 820 |  |
Interest Income | (133) |  | (81) |  |
Income Tax Expense (Recovery) | 931 |  | 2,281 |  |
Depreciation, Depletion and Amortization | 4,644 |  | 4,679 |  |
Exploration and Evaluation Asset Write-downs | 29 |  | 64 |  |
(Income) Loss From Equity-Accounted Affiliates | (51) |  | (15) |  |
Unrealized (Gain) Loss on Risk Management | 52 |  | (126) |  |
Foreign Exchange (Gain) Loss, Net | (67) |  | 343 |  |
Revaluation (Gain) Loss | 34 |  | (549) |  |
Re-measurement of Contingent Payments | 59 |  | 162 |  |
(Gain) Loss on Divestiture of Assets | (14) |  | (269) |  |
Other (Income) Loss, Net | (63) |  | (532) |  |
Adjusted EBITDA (1) | 10,201 |  | 13,227 |  |
Net Debt to Adjusted EBITDA (times) | 0.5 |  | 0.3 |  |
(1)Calculated on a trailing twelve-month basis. Net Debt to Adjusted Funds F low
As at December 31, | 2023 |  | 2022 |  |
Net Debt | 5,060 |  | 4,282 |  |
Cash From (Used in) Operating Activities | 7,388 |  | 11,403 |  |
(Add) Deduct: |  |  |  |  |
Settlement of Decommissioning Liabilities | (222) |  | (150) |  |
Net Change in Non-Cash Working Capital | (1,193) |  | 575 |  |
Adjusted Funds Flow (1) | 8,803 |  | 10,978 |  |
Net Debt to Adjusted Funds Flow (times) | 0.6 |  | 0.4 |  |
(1)Calculated on a trailing twelve-month basis. Net Debt to Capitalization
As at December 31, | 2023 |  | 2022 |  |
Net Debt | 5,060 |  | 4,282 |  |
Shareholders’ Equity | 28,698 |  | 27,576 |  |
Capitalization | 33,758 |  | 31,858 |  |
Net Debt to Capitalization (percent) | 15 |  |  | 13 |  |  |

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