Canadian oil and gas producer Cenovus Energy Inc (CVE.TO) said on Thursday it is doing engineering and design work at two of its deferred oil sands projects in northern Alberta and it could potentially reactivate them in 2018 and 2019, respectively.
The two projects, Foster Creek phase H and Narrows Lake phase A, would add up to 75,000 barrels per day of production. That would be in addition to Cenovus' 50,000 bpd Christina Lake phase G project, which the company said in December it was restarting.
Chief Executive Brian Ferguson said Cenovus has not made a sanctioning decision yet but will provide more information on capital costs and timing of a decision in June.
"We've got a very clear, full portfolio of opportunities in the oil sands where we literally have the next five years of investment opportunity ahead of us," Ferguson told analysts on a quarterly earnings call.
Calgary-based Cenovus has committed to capacity on TransCanada Corp's (TRP.TO) proposed Keystone XL and Energy East pipelines, Ferguson said, although he did not specify volumes.
Ferguson also told Reuters in an interview that given Cenovus' oil sands growth outlook, the company is more likely to sell than buy any production assets, and a couple of conventional oil projects have been earmarked for sale when markets are deemed appropriate.
The remarks came as Cenovus reported a surprise fourth-quarter profit as production rose and costs fell.
The company said its oil sands operating costs fell 12 per cent in 2016, while operating costs for its conventional oil assets fell 10 percent.
Cenovus' total crude oil production rose about 10 per cent to 219,551 barrels per day in the fourth quarter. Expansions at its Christina Lake and Foster Creek projects in northern Alberta increased total oil sands production capacity by 26 per cent to an average of 390,000 barrels per day in the quarter.
Operating earnings were $321 million, or 39 cents a share, compared with a loss of $438 million, or 53 cents a share, in the fourth quarter of 2015.
Analysts had expected the company to report a quarterly loss. Cenovus shares were last up 0.4 per cent on the Toronto Stock Exchange at $18.03.
Cenovus reported net earnings of $91 million, or 11 cents per share, in the three months ended Dec. 31, compared with a loss of $641 million, or 77 cents per share, in the year-prior quarter.