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Description of Business and Segmented Disclosures
 12 Months Ended
Dec. 31, 2024
Disclosure Of Reportable Segments [Abstract]  
Description of Business and Segmented Disclosures
1. DESCRIPTION OF BUSINESS AND SEGMENTED DISCLOSURES
Cenovus Energy Inc. (“Cenovus” or the “Company”) is an integrated energy company with crude oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States (“U.S.”).
Cenovus is incorporated under the Canada Business Corporations Act and its common shares and common share purchase warrants are listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange. Cenovus’s cumulative redeemable preferred shares series 1, 2, 5 and 7 are listed on the TSX. The executive and registered office is located at 4100, 225 6 Avenue S.W., Calgary, Alberta, Canada, T2P 1N2. Information on the Company’s basis of preparation for these Consolidated Financial Statements is found in Note 2.
Management has determined the operating segments based on information regularly reviewed for the purposes of decision making, allocating resources and assessing operational performance by Cenovus’s chief operating decision maker. The Company’s operating segments are aggregated based on their geographic locations, the nature of the businesses or a combination of these factors. The Company evaluates the financial performance of its operating segments primarily based on operating margin.
The Company operates through the following reportable segments:
Upstream Segments
•Oil Sands, includes the development and production of bitumen and heavy oil in northern Alberta and Saskatchewan. Cenovus’s oil sands assets include Foster Creek, Christina Lake, Sunrise, Lloydminster thermal and Lloydminster conventional heavy oil assets. Cenovus jointly owns and operates pipeline gathering systems and terminals through the equity-accounted investment in Husky Midstream Limited Partnership (“HMLP”). The sale and transportation of Cenovus’s production and third-party commodity trading volumes are managed and marketed through access to capacity on third-party pipelines and storage facilities in both Canada and the U.S. to optimize product mix, delivery points, transportation commitments and customer diversification.
•Conventional, includes assets rich in natural gas liquids (“NGLs”) and natural gas in Alberta and British Columbia in the Edson, Clearwater and Rainbow Lake operating areas, in addition to the Northern Corridor, which includes Elmworth and Wapiti. The segment also includes interests in numerous natural gas processing facilities. Cenovus’s NGLs and natural gas production is marketed and transported, with additional third-party commodity trading volumes, through access to capacity on third-party pipelines, export terminals and storage facilities. These provide flexibility for market access to optimize product mix, delivery points, transportation commitments and customer diversification.
•Offshore, includes offshore operations, exploration and development activities in the east coast of Canada and the Asia Pacific region, representing China and the equity-accounted investment in Husky-CNOOC Madura Ltd. (“HCML”), which is engaged in the exploration for and production of NGLs and natural gas in offshore Indonesia.
Downstream Segments
•Canadian Refining, includes the owned and operated Lloydminster upgrading and asphalt refining complex, which converts heavy oil and bitumen into synthetic crude oil, diesel, asphalt and other ancillary products. Cenovus also owns and operates the Bruderheim crude-by-rail terminal and two ethanol plants. The Company’s commercial fuels business across Canada is included in this segment. Cenovus markets its production and third-party commodity trading volumes in an effort to use its integrated network of assets to maximize value.
•U.S. Refining, includes the refining of crude oil to produce gasoline, diesel, jet fuel, asphalt and other products at the wholly-owned Lima, Superior and Toledo refineries. The U.S. Refining segment also includes the jointly-owned Wood River and Borger refineries, held through WRB Refining LP (“WRB”), a jointly-owned entity with operator Phillips 66. Cenovus markets some of its own and third-party refined products including gasoline, diesel, jet fuel and asphalt.
Corporate and Eliminations
Corporate and Eliminations, includes Cenovus-wide costs for general and administrative, financing activities, gains and losses on risk management for corporate related derivative instruments and foreign exchange. Eliminations include adjustments for feedstock and internal usage of crude oil, natural gas, condensate, other NGLs and refined products between segments; transloading services provided to the Oil Sands segment by the Company’s crude-by-rail terminal; the sale of condensate extracted from blended crude oil production in the Canadian Refining segment and sold to the Oil Sands segment; and unrealized profits in inventory. Eliminations are recorded based on market prices.
A) Results of Operations – Segment and Operational Information
Upstream
Oil SandsConventionalOffshoreTotal
For the years ended December 31,
20242023202420232024202320242023
Gross Sales
External Sales21,85720,6081,2111,4881,5721,61724,64023,713
Intersegment Sales6,5905,5841,8481,785——8,4387,369
28,44726,1923,0593,2731,5721,61733,07831,082
Royalties
(3,274)(3,059)(76)(112)(99)(99)(3,449)(3,270)
Revenues25,17323,1332,9833,1611,4731,51829,62927,812
Expenses
Purchased Product
1,8511,4571,8231,695——3,6743,152
Transportation and Blending
11,00010,774320298111611,33111,088
Operating
2,5112,7165555904233843,4893,690
Realized (Gain) Loss on Risk
   Management		2017(6)(5)——1412
Operating Margin9,7918,1692915831,0391,11811,1219,870
Unrealized (Gain) Loss on Risk
   Management
(16)154(19)——(12)(4)
Depreciation, Depletion and
   Amortization		3,1172,9934423865634874,1223,866
Exploration Expense2191666176942
(Income) Loss From Equity-
   Accounted Affiliates		(14)62—(53)(57)(65)(51)
Segment Income (Loss)6,7025,136(158)2104636717,0076,017
Downstream
Canadian Refining
U.S. Refining
Total
For the years ended December 31,
202420232024202320242023
Gross Sales
External Sales4,7875,38528,29926,37633,08631,761
Intersegment Sales523848917532865
5,3106,23328,30826,39333,61832,626
Royalties——————
Revenues5,3106,23328,30826,39333,61832,626
Expenses
Purchased Product
4,4834,91925,76923,35430,25228,273
Transportation and Blending
——————
Operating
9076392,7632,5623,6703,201
Realized (Gain) Loss on Risk Management——8—8—
Operating Margin(80)675(232)477(312)1,152
Unrealized (Gain) Loss on Risk Management
——8(17)8(17)
Depreciation, Depletion and Amortization185185462486647671
Exploration Expense——————
(Income) Loss From Equity-Accounted Affiliates——————
Segment Income (Loss)(265)490(702)8(967)498
Corporate and EliminationsConsolidated
For the years ended December 31,
2024202320242023
Gross Sales
External Sales——57,72655,474
Intersegment Sales(8,970)(8,234)——
(8,970)(8,234)57,72655,474
Royalties——(3,449)(3,270)
Revenues(8,970)(8,234)54,27752,204
Expenses
Purchased Product
(7,823)(6,710)26,10324,715
Transportation and Blending
(793)(947)10,53810,141
Purchased Product, Transportation and Blending (1)
(8,616)(7,657)36,64134,856
Operating
(318)(539)6,8416,352
Realized (Gain) Loss on Risk Management24(3)469
Unrealized (Gain) Loss on Risk Management
16731252
Depreciation, Depletion and Amortization1021074,8714,644
Exploration Expense——6942
(Income) Loss From Equity-Accounted Affiliates(1)—(66)(51)
Segment Income (Loss)(177)(215)5,8636,300
General and Administrative794688794688
Finance Costs, Net (1)
514538514538
Integration, Transaction and Other Costs1668516685
Foreign Exchange (Gain) Loss, Net462(67)462(67)
(Gain) Loss on Divestiture of Assets (1)
(119)20(119)20
Re-measurement of Contingent Payments30593059
Other (Income) Loss, Net(55)(63)(55)(63)
1,7921,2601,7921,260
Earnings (Loss) Before Income Tax4,0715,040
Income Tax Expense (Recovery)929931
Net Earnings (Loss)3,1424,109
(1)Revised presentation as of January 1, 2024. See Note 4.
B) External Sales by Product
Upstream
Oil SandsConventionalOffshoreTotal
For the years ended December 31,
20242023202420232024202320242023
Crude Oil21,18320,02220723832140121,71120,661
Natural Gas and Other3322716489889259011,9052,160
NGLs (1)
3423153562623263151,024892
External Sales21,85720,6081,2111,4881,5721,61724,64023,713
Downstream
Canadian RefiningU.S. RefiningTotal
For the years ended December 31,
202420232024202320242023
Gasoline42952213,79212,37514,22112,897
Distillates (2)
1,4841,75210,6329,61212,11611,364
Synthetic Crude Oil1,8141,899——1,8141,899
Asphalt5485371,0298641,5771,401
Other Products and Services5126752,8463,5253,3584,200
External Sales4,7875,38528,29926,37633,08631,761
(1)Third-party condensate sales are included within NGLs.
(2)Includes diesel and jet fuel.
C) Geographical Information
Revenues (1)
For the years ended December 31,
2024
2023
Canada26,79125,128
United States26,33325,943
China1,1531,133
Consolidated54,27752,204
(1)Revenues by country are classified based on where the operations are located.
Non-Current Assets (1)
As at December 31,
2024
2023
Canada37,00635,876
United States5,9025,230
China1,2491,608
Indonesia295344
Consolidated44,45243,058
(1)Includes exploration and evaluation (“E&E”) assets, property, plant and equipment (“PP&E”), right-of-use (“ROU”) assets, income tax receivable, investments in equity-accounted affiliates, precious metals, intangible assets and goodwill.
Major Customers
In connection with the marketing and sale of Cenovus’s own and purchased crude oil, NGLs, natural gas and refined products for the year ended December 31, 2024, Cenovus had two customers (2023 – two) that individually accounted for more than 10 percent of its consolidated gross sales. Sales to these customers, recognized as major international energy companies with investment grade credit ratings, were approximately $17.7 billion and $8.1 billion, respectively (2023 – $18.0 billion and $7.1 billion, respectively), and are reported across all of the Company’s operating segments
D) Assets by Segment
E&E AssetsPP&EROU Assets
As at December 31,
2024
2023
2024
2023
2024
2023
Oil Sands46172924,64624,4431,018849
Conventional15—2,2302,209571
Offshore
893,3652,79895102
Canadian Refining——2,5112,4693928
U.S. Refining——5,5385,014342268
Corporate and Eliminations——278317399432
Consolidated48473838,56837,2501,9501,680
GoodwillTotal Assets
As at December 31,
2024
2023
2024
2023
Oil Sands2,9232,92331,66831,673
Conventional——2,6102,429
Offshore——4,0893,511
Canadian Refining——2,9012,960
U.S. Refining——9,5178,660
Corporate and Eliminations——5,7544,682
Consolidated2,9232,92356,53953,915
E) Capital Expenditures (1)
For the years ended December 31,
2024
2023
Capital Investment
Oil Sands2,7142,382
Conventional421452
Offshore
Atlantic1,077635
Asia Pacific687
Total Upstream 4,2803,476
Canadian Refining
208145
U.S. Refining
488602
Total Downstream696747
Corporate and Eliminations3975
5,0154,298
Acquisitions
Oil Sands937
Conventional135
U.S. Refining (2)
—385
22427
Total Capital Expenditures5,0374,725
(1)Includes expenditures on PP&E, E&E assets and capitalized interest. Excludes capital expenditures related to the Company's joint ventures.
(2)In 2023, Cenovus was deemed to have disposed of its pre-existing interest in BP-Husky Refining LLC (“Toledo”) and reacquired it at fair value as required by International Financial Reporting Standard 3, "Business Combinations" (“IFRS 3”). The acquisition capital above does not include the fair value of the pre-existing interest in Toledo of $368 million.