Mr. Jon McKenzie reports

CENOVUS ANNOUNCES 2024 BUDGET

Cenovus Energy Inc. has released its 2024 budget, delivering disciplined capital investment and balancing growth of the company's base business with meaningful shareholder returns. Continuing with the growth plan embarked on in 2023, Cenovus expects to invest capital of between $4.5-billion and $5-billion in 2024. This investment includes $1.5-billion to $2-billion of optimization and growth capital, primarily for progressing the West White Rose project as well as incrementally growing production at the Foster Creek, Christina Lake and Sunrise oil sands facilities. Additionally, Cenovus will implement further initiatives in its downstream business to improve reliability and increase margin capture as well as invest in opportunities in the conventional business. Approximately $3-billion will be directed toward sustaining production and supporting continued safe and reliable operations.

"We will continue to progress strategic initiatives in our base business in 2024 that will enhance our integrated operations and further drive our ability to grow total shareholder returns, even in periods of price volatility," said Jon McKenzie, Cenovus president and chief executive officer. "We will remain focused on reducing costs and continued capital discipline, while realizing the full value of our integrated strategy."

2024 budget highlights:

• Total upstream production of between 770,000 and 810,000 barrels of oil equivalent per day (boe/d) with production from oil sands and thermal projects expected to be between 590,000 and 610,000 barrels per day (bbl/d), which reflects a turnaround at Christina Lake in the third quarter of 2024;
• Total downstream crude throughput of 630,000 bbl/d to 670,000 bbl/d, an increase of approximately 17 per cent compared with the prior year;
• Oil sands operating expenses per barrel (bbl) of $12 to $14 and U.S. refining operating expenses of $11.75/bbl to $13.75/bbl, which includes expensed turnaround costs.

2024 guidance

Oil sands

Oil sands production guidance for 2024 is 590,000 bbl/d to 610,000 bbl/d, which reflects a turnaround in the third quarter at Christina Lake, with an expected annualized impact of approximately 13,000 bbl/d to 15,000 bbl/d. Oil sands operating costs are expected to be in the range of $12/bbl to $14/bbl in 2024, partially due to higher non-fuel costs associated with the Christina Lake turnaround.

Cenovus plans to invest $2.5-billion to $2.75-billion of capital in its oil sands assets, including approximately $650-million of growth and optimization capital, largely related to further advancing brownfield and multiyear growth opportunities that will increase production across its oil sands portfolio.

Investment in the coming year will be focused on projects with strong capital efficiencies, including the Foster Creek optimization project, Narrows Lake tie-back to Christina Lake, and optimization and new well pads at Sunrise, positioning the company to meaningfully increase production starting in 2025. In addition to the Foster Creek optimization project, capital investment will also be directed to a project to enhance sulphur recovery at Foster Creek, leading to lower operating costs once completed.

Conventional

The company plans to invest between $350-million and $425-million in its conventional assets. Capital will be primarily used to maintain production, advance methane reduction projects and build gas handling infrastructure to support future production growth. Total production is expected to be between 120,000 boe/d and 130,000 boe/d.

Offshore

Total offshore production is expected to be in the range of 60,000 boe/d to 70,000 boe/d. This includes between 10,000 bbl/d and 15,000 bbl/d in the Atlantic region, which reflects the impact of the SeaRose floating production, storage and offloading (FPSO) vessel asset life extension program, scheduled to begin in January. The SeaRose is expected to return to the field and resume production late in the third quarter of 2024.

Capital spending of between $850-million and $950-million will be primarily directed toward the continuing construction of the West White Rose project in the Atlantic region, in addition to the capital costs associated with the SeaRose asset life extension program, which will support production at the White Rose field, including production associated with West White Rose, until 2038. First oil from the West White Rose project is expected in the first half of 2026, with peak production of approximately 45,000 bbl/d anticipated in 2028.

Downstream

Crude throughput is expected to be between 630,000 bbl/d and 670,000 bbl/d, representing a crude utilization rate of approximately 87 per cent, and includes 85,000 bbl/d to 95,000 bbl/d of crude throughput in the Canadian refining segment. The Lloydminster upgrader will begin a turnaround in the second quarter of 2024, which will impact annualized throughput by approximately 10,000 bbl/d to 12,000 bbl/d. As a result of the turnaround, operating costs per barrel in Canadian refining are expected to be $18/bbl to $20/bbl in 2024, with the increase relative to 2023 attributable to higher expensed turnaround costs. Crude throughput in U.S. refining is expected to be 545,000 bbl/d to 575,000 bbl/d, an increase of 24 per cent year-over-year, which reflects a full year of throughput at the Superior refinery, in addition to the increased working interest at the Toledo refinery acquired in early 2023. U.S. operating costs are expected to be between $11.75/bbl and $13.75/bbl, a decrease of approximately 17 per cent when compared with 20234. Capital investment in the downstream business is projected to be between $750-million and $850-million, including approximately $155-million for growth and optimization capital, and will be primarily focused on safety and reliability initiatives across Cenovus's downstream businesses as well as optimization projects to enhance margin capture.

Corporate

General and administrative (G&A) expenses, not including stock-based compensation, are expected to be in the range of $625-million to $725-million in 2024. In addition, Cenovus expects to invest $200-million to $300-million on information technology systems upgrades, which will modernize and replace the company's existing enterprise resource planning systems, enhance cybersecurity and standardize data across the company.

Sustainability

Cenovus continues to progress work toward its environmental, social and governance (ESG) targets. The company continues to deploy previously announced capital on initiatives to advance its goal of reducing absolute scope 1 and 2 greenhouse gas (GHG) emissions by 35 per cent by year-end 2035, from 2019 levels, on a net equity basis. In 2024, investments in targeted emissions reduction initiatives and Cenovus's commitment to the Pathways Alliance foundational project are forecast to reach almost $100-million. This includes progressing carbon capture projects at the Lloydminster upgrader and Christina Lake, methane reduction initiatives across conventional operations, continuing work to increase energy efficiency at the company's Canadian offshore assets, and advancing additional technology assessments.

2024 planned maintenance

Cenovus expects maintenance and repair activities will contribute to higher operating costs in 2024 as the company works to ensure the safety and reliability of all its upstream and downstream assets. Atlantic region operating expenses reflect the planned SeaRose FPSO vessel asset life extension program, while work at Cenovus's Lloydminster upgrader will result in higher operating costs for Canadian refining.

The attached table provides details on planned turnaround activities at Cenovus assets in 2024 and anticipated production or throughput impacts. These planned turnarounds are reflected in Cenovus's corporate guidance assumptions.

About Cenovus Energy Inc.

Cenovus Energy is an integrated energy company with 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. The company is focused on managing its assets in a safe, innovative and cost-efficient manner, integrating environmental, social and governance considerations into its business plans. Cenovus common shares and warrants are listed on the Toronto and New York stock exchanges, and the company's preferred shares are listed on the Toronto Stock Exchange.

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