The Successful Investor Hotline – Friday, February 17, 2012

Article Excerpt

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. Thanks to rising production and oil prices, Cenovus’s cash flow rose 35.8%, to $3.3 billion, or $4.32 a share. Earnings per share jumped 54.7%, to $1.64 from $1.06. These figures exclude unusual items, such as gains on hedging contracts. On this basis, the latest earnings fell short…