(Reuters) – Canadian oil producer Cenovus Energy (CVE.TO) posted a surprise loss on Wednesday as weak refining margins muted benefit from higher production and more sales in the United States.
Curtailments on production by the Canadian province of Alberta has pushed up prices of Canadian heavy crude, reducing the benefit in refining the low-cost oil.
Cenovus’ refining and marketing operating margin more than halved to C$109 million for the quarter, the company said. Rival Imperial Oil Ltd (IMO.TO) also took a hit to its refining margins in the fourth quarter.
The Alberta government has, however, eased curtailment rules to allow companies to raise their output with the caveat they transport the additional crude by rail.
Cenovus, which had earlier expected crude-by-rail volume to ramp up to about 100,000 barrels per day (bbls/d) by the end of 2019, said it exceeded the target by achieving volume of 106,000 bbls/d in December.
Total production from continuing operations rose 8% to 467,448 barrels of oil equivalent per day.
Net earnings from continuing operations were C$113 million ($85.15 million), or 9 Canadian cents per share, in the fourth quarter ended Dec. 31, compared with a loss of C$1.35 billion, or C$1.10 per share, a year earlier. Excluding items, Cenovus posted a loss of 13 Canadian cents per share. Analysts on average had expected the company to report a profit of 11 Canadian cents per share, according to IBES data from Refinitiv.
Reporting by Taru Jain; Editing by Krishna Chandra Eluri
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