Cenovus Energy exceeds quarterly profit estimates on higher production

Canadian oil and gas producer Cenovus Energy CVE-T +9.88%increase on Thursday posted a fall in first-quarter profit but managed to beat Wall Street estimates on the back of higher output and improved refining margins.

The Calgary-based company’s U.S.-listed shares were up nearly 1.4 per cent in premarket trading following the results.

Energy producers in Canada have been benefiting from the completion of the Trans Mountain pipeline expansion project, which offers the only export route to international markets bypassing the U.S.

The pipeline has raised its capacity to 890,000 barrels per day.

Peer Imperial Oil last week posted its highest-ever first-quarter earnings , driven by stronger margins in its refining and fuel sales business.

Suncor Energy on Tuesday beat quarterly profit estimates on greater refinery production and sales volumes.

Cenovus’ total upstream production was 818,900 barrels of oil equivalent per day (boepd) in the first quarter, up from 800,900 boepd a year earlier.

Its total quarterly downstream throughput was 665,400 barrels (bbl) per day, compared with 655,200 bbl per day a year ago.

Refinery utilization in the Canadian Refining segment rose to 104 per cent from 94 per cent a year ago, while it rose to 90 per cent in the U.S. Refining segment from 87 per cent.

CEOs of Canadian oil and gas producers, including Cenovus’ Jon McKenzie, had said earlier in April they are seeking to avoid making abrupt decisions about spending or production, with oil prices hitting four-year lows and recession fears growing.

Cenovus’ first-quarter net income fell to $859-million from C$1.18-billion a year earlier, as crude prices declined on uncertainty surrounding the U.S. economy, tariff policies and fears of oversupply.

However, the company’s quarterly profit per share of 47 cents surpassed analysts’ average estimate of 37 cents per share, according to data compiled by LSEG.