Cenovus forecasts higher 2026 output after completing MEG takeover

Dec 11 (Reuters) - Cenovus Energy CVE.TO on Thursday set its 2026 capital budget at up to C$5.3 billion ($3.8 billion) and forecast higher 2026 production as the Canadian oil producer integrates its recent purchase of MEG Energy and ramps up growth projects across its oil sands business.

The outlook is Cenovus's first full-year forecast since it closed the MEG deal, which expanded its Christina Lake footprint and strengthened its position as one of Canada's largest producers.

The deal followed a high-profile takeover contest, with Cenovus winning shareholder approval in November, which ended a battle with Strathcona Resources SCR.TO.

Excluding turnaround costs, capital spending is expected to total C$4.7 billion to C$5 billion, roughly flat with 2025.

The company expects upstream production of 945,000 to 985,000 barrels of oil equivalent per day (boepd) in 2026, about 4% higher than 2025 when adjusted for the MEG acquisition.

Most of the growth will come from its oil sands business, where Cenovus plans to ramp up output from Foster Creek, West White Rose and its newly acquired Christina Lake North assets.

Cenovus said it plans to spend around C$850 million on Christina Lake North, and expects first oil from West White Rose in the second quarter of 2026.

"Following the completion of a three-year growth investment cycle, we are well positioned to ramp up volumes from our projects," said Cenovus CEO Jon McKenzie.

The company's downstream throughput is expected to average 430,000 to 450,000 barrels per day next year, reflecting utilization rates of 91% to 95% across its refineries.

For the current quarter, upstream production is expected to range between 910,000 and 920,000 boepd.

($1 = 1.3794 Canadian dollars)