Strong commodity prices saw the Calgary-based integrated oil and natural gas company book net earnings of $2.4 billion in its second quarter, or $1.23 per basic share, compared with $224 million or $0.11 per share in the same quarter last year.
Revenue for the three months ended June 30 was $19.2 billion, up from $10.58 billion in the second quarter of 2021.
Cenovus boosted its capital spending plans by about $400 million, to a range of $3.3 billion to $3.7 billion. The company says inflation in labour and equipment costs, increased drilling activity, and other expenses will require $100 million of those additional funds. Cenovus' offshore group is expected to spend an additional $100 million on restarting the White Rose Project off the coast of Newfoundland and Labrador. About $200 million of the increased capital guidance is earmarked for the company's takeover of BP's 50 per cent stake in the Sunrise oil sands project in Alberta.
"The increased capital will position us very well for strong momentum and production volumes as we go into 2023," Pourbaix told analysts on a post-earnings conference call.
Cenovus says total production for the quarter topped 761,500 barrels of oil equivalent per day, down from 765,900 boe/d in the same period last year. The company expects to produce 780,000 and 810,000 boe/d this year, an increase of 15,000 boe/d, thanks to assets to be acquired from BP.
Like many of its peers, Cenovus has focused on returning excess cash to shareholders. Pourbaix said in a statement on Thursday that the company met its goal of returning half of its free cash flow to investors in the quarter.
Asked about Ottawa's recently released preliminary plans to cap emission from the oil and gas sector, Pourbaix says the options put forward by the government are "more ambitious than what can reasonably be achieved."
"I am very worried that if we remain on this path, it could lead to shutting in production at a time when the world is literally crying out for more oil and gas production," he said.
Cenovus became Canada's third-largest oil and gas producer after completing its acquisition of rival Husky Energy last year.
Pourbaix says the company is targeting "brownfield", organic growth within its operations, rather than building new large projects. Research firm S&P Global Commodity Insights recently said it expects 80 per cent of oil sands production growth over the next decade to come from the projects companies have already invested in.
Toronto-listed Cenovus shares added 1.52 per cent to $23.99 as at 12:51 p.m. ET.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.