Cenovus Energy Inc.

CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.8%; TSINetwork Rating: Extra Risk; www.cenovus.com) has received regulatory approval to develop its Narrows Lake oil sands project in northern Alberta; U.S.-based ConocoPhillips (New York symbol COP) owns 50% of this property. Narrows Lake could begin operating in 2017. When it reaches full capacity, it should produce 130,000 barrels per day (Cenovus’s share is 65,000 barrels). To put that in context, Cenovus produced an average of 156,850 barrels per day in the first quarter of 2012. Narrows Lake’s reserves should last 40 years. The company plans to use a new technique, called a solventaided process, to extract the oil from Narrows Lake. This approach will add to the project’s construction and development costs, but it should let the partners recover up to 15% more oil than current methods....

CENOVUS ENERGY $32.47 (Toronto symbol CVE; Shares outstanding: 754.7 million; Market cap: $24.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 2.7%; www.cenovus.com) has received regulatory approval to develop its Narrows Lake oil sands project in northern Alberta; U.S.-based ConocoPhillips (New York symbol COP) owns 50% of this property. Narrows Lake, which could start up in 2017, is expected to produce 130,000 barrels a day (Cenovus’s share is 65,000 barrels). To put that in context, Cenovus produced an average of 156,850 barrels a day in the first quarter of 2012. The property’s reserves should last 40 years. The company plans to use a new technique, called a solvent-aided process, to extract the oil from Narrows Lake. That will add to the project’s development costs, but it should let the partners recover up to 15% more oil than they could using today’s methods....

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CENOVUS ENERGY INC. $33 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.9 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.7%; TSINetwork Rating: Extra Risk; www.cenovus.com) produced an average of 156,850 barrels of oil per day in the three months ended March 31, 2012. That’s up 14.2% from 137,355 barrels a day a year earlier.

The gain is mostly the result of Cenovus’s ongoing expansion of its Alberta oil sands properties. Production of conventional oil also rose 10.2%.

The company recently started shipping oil to Asia. That lets it sell this oil at international prices, which are higher than what it can get from North American refineries.

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CENOVUS ENERGY INC. $33 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.9 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.7%; TSINetwork Rating: Extra Risk; www.cenovus.com) produced an average of 156,850 barrels of oil per day in the three months ended March 31, 2012. That’s up 14.2% from 137,355 barrels a day a year earlier. The gain is mostly the result of Cenovus’s ongoing expansion of its Alberta oil sands properties. Production of conventional oil also rose 10.2%. The company recently started shipping oil to Asia. That lets it sell this oil at international prices, which are higher than what it can get from North American refineries....

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CENOVUS ENERGY INC. $38 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 754.3 million; Market cap: $28.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.1%; TSINetwork Rating: Extra Risk; www.cenovus.com) operates three oil sands projects in Alberta and one in Saskatchewan.

Cenovus ships the heavy bitumen from these properties to refineries in Illinois and Texas. U.S.-based ConocoPhillips (New York symbol COP) owns 50% of the refineries, as well as 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta.

Cenovus gets about half of its output from the oil sands. Conventional oil and natural gas wells supply the other half.

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CENOVUS ENERGY INC., $38.73, Toronto symbol CVE, spent $2.7 billion on capital upgrades in 2011. That’s up 28.7% from $2.1 billion in 2010. The company used about a third of this money to expand its 50%-owned Foster Creek and Christina Lake oil sands properties in Alberta; U.S.-based ConocoPhillips (New York symbol COP) owns the other 50%. As a result, Cenovus’s oil sands production rose 12.7% in 2011, to 66,533 barrels a day from 59,045 barrels in 2010. That helped offset a 3.5% drop in conventional oil production. Overall oil production rose 3.9%, to 134,239 barrels a day from 129,187 barrels. Natural gas production fell 11.0%, mainly because Cenovus sold some of its gas properties in 2010....

Ten oil sands operators have already agreed to use Enbridge’s Northern Gateway pipeline, which would let them ship more of their oil to Asia. These companies have also pledged a total of $200 million to fund the new line’s initial development and engineering. Enbridge has not said which oil companies have committed to the pipeline, but this group likely includes Suncor, Imperial Oil and Cenovus. SUNCOR ENERGY INC. $35 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $56.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.3%; TSINetwork Rating: Average; www.suncor.com) became Canada’s largest integrated oil company in 2009, when it merged with Petro-Canada. It gets 60% of its production from its oil sands projects in Alberta; the remaining 40% is conventional oil and natural gas. Suncor also operates four refineries and 1,500 gas stations under the Petro-Canada banner....

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