Cenovus Energy SWOT Analysis, USP & Competitors

Cenovus Energy Inc

Parent Company

Cenovus Energy Inc.

Category

Oil and Gas

Sector

Energy & Power

Tagline/ Slogan

We build value through a solid strategy

USP

Oil is our growth driver

Cenovus Energy STP

Segment

Corporates and individuals with energy requirements

Target Group

Entities which require crude oil, natural gas, Bitumen and Natural gas liquids

Positioning

Canada based integrated oil and gas producing company

Cenovus Energy SWOT Analysis

Strengths

1. Cenovus makes use of self-developed advanced innovative technologies like Dewatering (to reduce the Steam-To-Oil ratio for its Steam Assisted Gravity Drainage (SAGD) process), Flue-Gas Recirculation (to recycle exhaust from steam generators used in SAGD process) and SkyStrat drilling rig etc., which improve its production efficiency and help it gain a stronger market position
2. Cenovus has a diversified revenue sources base. It is engaged in production of oil( from both conventional and non-conventional resources) , bitumen, natural gas and heavy oils, which helps it mitigate market risks due to volatile commodity pricing
3. Integrated refining operations of Cenovus (both its own crude oil production from oil sands and 50 % ownership in two US refineries) help it capture the full value chain from oil production to refined products, boosting up its finances in the process

4. Strong sustainable operations makes it a prominent industry player

5. 5000+ skilled employees form a strong workforce

Weaknesses

1. Declining natural gas production due to reduced natural gas capital spending for the previous few years, divestiture of a non-core property (Boyer)  and anticipated declines in production has impacted Cenovus’ revenue streams greatly
2. Significant decline in proved and proved plus probable natural gas reserves( due to lower gas prices in the forecast, causing certain reserves to become uneconomic to produce, and affecting the company’s financial health

Opportunities

1. Increase in Crude Oil demand by US Gulf Coast refineries gives impetus to Canadian companies like Cenovus to increasingly trade with these newer markets in the US
2. Availability of newer technologies (like JAGD or J-well Gravity Assisted Steam simulation) for in-situ extraction processes is a good opportunity for producers of oil from oil sands(like Cenovus) to improve cost efficiencies while meeting stringent environmental regulations
3. New pipeline expansion projects (like the Sandpiper project and the Enbridge Bakken Expansion project) will help major oil producing Canadian companies like Cenovus etc., to access more lucrative American and other markets at lower costs

Threats

1. Operational hazards typical to oil &gas companies, which could lead to damage of facilities, loss of lives, property etc. and cause prolonged shutdown of facilities can decrease production of the company, thereby reducing revenues substantially
2. Fluctuations in future commodity prices depend on several external factors, outside the realm of control of the company, and can cause adverse impacts on the financial health of the company
3. Stringent environmental regulations in Cenovus’ biggest market, the US( for example, the New Source Performance Standard(NSPS) proposed by the US Environmental Protection Agency to limit CO₂ emissions) can cause additional liabilities and/or unforeseen losses for the company

Cenovus Energy Competition

Competitors

1. Husky Energy Inc.
2. Suncor Energy
3. Canadian Oil Sands Ltd.

4. Imperial Oil Ltd.