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Debt and Capital Structure | 12 Months Ended
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Dec. 31, 2024
Borrowings [abstract] |
Debt and Capital Structure |
22. DEBT AND CAPITAL STRUCTURE
For the year ended December 31, 2024, the annualized weighted average interest rate on outstanding debt, including the Company’s proportionate share of short-term borrowings, was 4.5 percent (2023 – 4.7 percent). A) Short-Term Borrowings
As at December 31, | Notes |  | 2024 |  | 2023
Uncommitted Demand Facilities | i |  | — |  | —
WRB Uncommitted Demand Facilities | ii |  | 173 |  | 179
Total Debt Principal |  |  | 173 |  | 179
i) Uncommitted Demand Facilities As at December 31, 2024, the Company had uncommitted demand facilities of $1.7 billion (December 31, 2023 – $1.7 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, 2024, there were outstanding letters of credit aggregating to $355 million (December 31, 2023 – $364 million) and no direct borrowings (December 31, 2023 – $nil). ii) WRB Uncommitted Demand Facilities WRB has uncommitted demand facilities of US$450 million (December 31, 2023 – 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, 2024, US$240 million was drawn on these facilities, of which Cenovus’s proportionate share was US$120 million (C$173 million). As at December 31, 2023, Cenovus's proportionate share of drawings was US$135 million (C$179 million) B) Long-Term Debt
As at December 31, | Notes |  | 2024 |  | 2023
Committed Credit Facility | i |  | — |  | —
U.S. Dollar Denominated Unsecured Notes | ii |  | 5,470 |  | 5,028
Canadian Dollar Unsecured Notes | ii |  | 2,000 |  | 2,000
Total Debt Principal |  |  | 7,470 |  | 7,028
Debt Premiums (Discounts), Net, and Transaction Costs |  |  | 64 |  | 80
Long-Term Debt |  |  | 7,534 |  | 7,108
Less: Current Portion |  |  | 192 |  | —
Long-Term Portion |  |  | 7,342 |  | 7,108
i) Committed Credit Facility On June 26, 2024, Cenovus renewed its existing committed credit facility to extend the maturity dates by more than one year. The committed credit facility consists of a $2.2 billion tranche maturing on June 26, 2027, and a $3.3 billion tranche maturing on June 26, 2028. As at December 31, 2024, no amount was drawn on the credit facility (December 31, 2023 – $nil). The committed credit facility may include Canadian overnight repo rate average loans, secured overnight financing rate loans, prime rate loans and U.S. base rate loans. ii) U.S. Dollar Denominated and Canadian Dollar Denominated Unsecured Notes The principal amounts of the Company’s outstanding unsecured notes are:
| 2024 |  | 2023
As at December 31, | US$ Principal |  | C$ Principal and Equivalent |  | US$ Principal |  | C$ Principal and Equivalent
U.S. Dollar Denominated Unsecured Notes |  |  |  |  |  |  |
5.38% due July 15, 2025 | 133 |  | 192 |  | 133 |  | 176
4.25% due April 15, 2027 | 373 |  | 537 |  | 373 |  | 493
4.40% due April 15, 2029 | 183 |  | 262 |  | 183 |  | 241
2.65% due January 15, 2032 | 500 |  | 720 |  | 500 |  | 661
5.25% due June 15, 2037 | 333 |  | 479 |  | 333 |  | 441
6.80% due September 15, 2037 | 191 |  | 275 |  | 191 |  | 253
6.75% due November 15, 2039 | 652 |  | 938 |  | 652 |  | 862
4.45% due September 15, 2042 | 91 |  | 131 |  | 91 |  | 121
5.20% due September 15, 2043 | 27 |  | 39 |  | 27 |  | 36
5.40% due June 15, 2047 | 569 |  | 818 |  | 569 |  | 752
3.75% due February 15, 2052 | 750 |  | 1,079 |  | 750 |  | 992
| 3,802 |  | 5,470 |  | 3,802 |  | 5,028
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 |  |  | 7,470 |  |  |  | 7,028
For the year ended December 31, 2023, the Company purchased US$1.0 billion in principal of its outstanding unsecured notes. As at December 31, 2024, the Company was in compliance with all of the terms of its debt agreements. Under the terms of Cenovus’s committed credit facility, the Company is required to maintain a total debt to capitalization ratio, as defined in the agreement, not to exceed 65 percent. The Company is below this limit. C) Mandatory Debt Payments
| U.S. Dollar Unsecured Notes |  | Canadian Dollar Unsecured Notes |  | Total
As at December 31, 2024 | US$ Principal |  | C$ Principal Equivalent |  | C$ Principal |  | C$ Principal and Equivalent
2025 | 133 |  | 192 |  | — |  | 192
2026 | — |  | — |  | — |  | —
2027 | 373 |  | 537 |  | 750 |  | 1,287
2028 | — |  | — |  | 1,250 |  | 1,250
2029 | 183 |  | 262 |  | — |  | 262
Thereafter | 3,113 |  | 4,479 |  | — |  | 4,479
| 3,802 |  | 5,470 |  | 2,000 |  | 7,470
D) Capital Structure Cenovus’s capital structure consists of shareholders’ equity and 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, steward working capital, 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 $4.0 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 or the strengthening or weakening of the Canadian dollar relative to the U.S. dollar. 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, | 2024 |  | 2023 |  |
Short-Term Borrowings | 173 |  | 179 |  |
Current Portion of Long-Term Debt | 192 |  | — |  |
Long-Term Portion of Long-Term Debt | 7,342 |  | 7,108 |  |
Total Debt | 7,707 |  | 7,287 |  |
Less: Cash and Cash Equivalents | (3,093) |  | (2,227) |  |
Net Debt | 4,614 |  | 5,060 |  |
Net Earnings (Loss) | 3,142 |  | 4,109 |  |
Add (Deduct): |  |  |  |  |
Finance Costs, Net (1) | 514 |  | 538 |  |
Income Tax Expense (Recovery) | 929 |  | 931 |  |
Depreciation, Depletion and Amortization | 4,871 |  | 4,644 |  |
Exploration and Evaluation Asset Write-downs | 37 |  | 29 |  |
(Income) Loss From Equity-Accounted Affiliates | (66) |  | (51) |  |
Unrealized (Gain) Loss on Risk Management | 12 |  | 52 |  |
Foreign Exchange (Gain) Loss, Net | 462 |  | (67) |  |
(Gain) Loss on Divestiture of Assets (1) | (119) |  | 20 |  |
Re-measurement of Contingent Payments | 30 |  | 59 |  |
Other (Income) Loss, Net | (55) |  | (63) |  |
Adjusted EBITDA (2) | 9,757 |  | 10,201 |  |
Net Debt to Adjusted EBITDA (times) | 0.5 |  | 0.5 |  |
(1)Revised presentation as of January 1, 2024. See Note 4. (2)Calculated on a trailing twelve-month basis. Net Debt to Adjusted Funds F low
As at December 31, | 2024 |  | 2023 |  |
Net Debt | 4,614 |  | 5,060 |  |
Cash From (Used in) Operating Activities | 9,235 |  | 7,388 |  |
(Add) Deduct: |  |  |  |  |
Settlement of Decommissioning Liabilities | (234) |  | (222) |  |
Net Change in Non-Cash Working Capital | 1,305 |  | (1,193) |  |
Adjusted Funds Flow (1) | 8,164 |  | 8,803 |  |
Net Debt to Adjusted Funds Flow (times) | 0.6 |  | 0.6 |  |
(1)Calculated on a trailing twelve-month basis. Net Debt to Capitalization
As at December 31, | 2024 |  | 2023 |  |
Net Debt | 4,614 |  | 5,060 |  |
Shareholders’ Equity | 29,754 |  | 28,698 |  |
Capitalization | 34,368 |  | 33,758 |  |
Net Debt to Capitalization (percent) | 13 |  |  | 15 |  |  |

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