2Q26 Preview - Operational Momentum & Accelerated Deleveraging

Research evidence excerpt

2Q26 Preview - Operational Momentum & Accelerated Deleveraging

USA | Integrated Oil

Cenovus Energy EquityJulyResearch10, 2026

ESTIMATE CHANGE2Q26 Preview - Operational Momentum &

RATING BUYAccelerated Deleveraging

PRICE C$36.85^

We expect CVE to report 2Q26 CFPS at C$2.44, 1% lower than our previous

forecast of C$2.47, and in line with consensus of C$2.45. Operational PRICE TARGET | % TO PT C$49.00 | +33%

performance across Upstream & Downstream continues to be positive (despite 52W HIGH-LOW C$44.13 - C$19.05

a minor electrical outage at Foster Creek in June). We expect elevated cash flow FLOAT (%) | ADV MM (USD) 72.4% | 237.29

generation to accelerate net debt paydown with CVE hitting the 75% target this MARKET CAP C$68.2B | $48.1B

quarter and 100% in '27. TICKER CVE CN ^Prior trading day's closing price unless otherwise

noted.

Upstream. Our 2Q total production forecast of 967mboepd compares to consensus of 962mboepd,

and we expect Oil Sands production of 774mboepd. Christina Lake crude volumes continue to

FY (Dec) CHANGE TO JEFe JEF vs CONS

climb, and we expect output for quarter to average 367mboepd (+2% QoQ and +68% YoY). This will

2025 2026 2025 2026

offset an electrical outage caused by inclement weather at Foster Creek which caused utilization to

average ~50-60% for two weeks in June. We expect Foster Creek production at 212mboepd (-5% REV NA NA NA NA

QoQ and +14% YoY). In our model, Sunrise production rises to 64mboepd (+8% QoQ and +27% YoY). EPS NA -1% +11% +176%

Higher production from the Oil Sands segment and supportive crude pricing is balanced by higher

condensate blending costs and an uptick in royalties. Overall, we expect Oil Sands Operating Margin 2025 (C$) Q1A Q2A Q3A Q4A FY

at approximately C$4.78bn.