Cenovus oil production anticipated to grow 14% in 2013

  Cenovus oil production anticipated to grow 14% in 2013

          Company Continues to Focus on Execution of Strategic Plan

Business Wire

CALGARY, Alberta -- December 12, 2012

Cenovus Energy Inc. (TSX, NYSE: CVE) plans to make a significant investment in
its oil assets next year as it continues to focus on growing production. The
company expects to invest between $3.2 billion and $3.6 billion in 2013,
building on its successful 2012 capital program.

Steam generators at Cenovus's Christina Lake operation in northern Alberta

Steam generators at Cenovus's Christina Lake operation in northern Alberta

“We’re in an excellent financial position with a strong balance sheet that
gives us the flexibility to invest for future growth and maintain our focus on
delivering solid total shareholder return. That includes plans to increase our
dividend as we grow,” said Brian Ferguson, Cenovus President & Chief Executive
Officer. “We anticipate taking substantial steps again next year toward
achieving our long-term objective of increasing oil production three-fold
between 2012 and the end of 2021.”

Cenovus expects continued robust growth in oil production in 2013, mainly due
to expanded capacity at its Christina Lake oil sands operation. Investment in
the company’s other oil operations is also expected to start paying off with
production increases anticipated next year. The company remains squarely
focused on its long-term strategy with a majority of the capital budget
contributing to oil production growth beyond 2013.

“In our first three years as a company, we’ve consistently delivered on the
commitments we made to investors,” Ferguson said. “That includes meeting and,
in several cases, exceeding the milestones we laid out in our long-range
strategic plan.”

Cenovus is anticipating strong total cash flow of between $3.1 billion and
$4.0 billion in 2013. The company’s oil production and refining operations are
expected to generate the majority of operating cash flow. Cenovus is
forecasting a slight decline in 2013 total cash flow compared with 2012 due to
the company’s expectations of lower realized oil prices. Based on November 30
commodity strip pricing, total cash flow for 2013 would be higher than the
expected 2012 total cash flow.

Budget forecast
                                   2013 budget  2012 guidance  % change^3
Cash flow^1,2 ($ billions)           3.1 – 4.0     3.7             -3
Per share diluted ($/share)          4.05 – 5.20   4.90            
Operating cash flow^1,2 ($           4.1 – 5.0     4.5             -
Total capital investment ($          3.2 – 3.6     3.3 – 3.4       1
Total oil and NGLs production        180 – 196     165             14

^1 2013 based on WTI of US$91 per bbl, a WTI/WCS differential of $28, NYMEX
gas of US$4 per Mcf, US$/C$ at $1.00 and a Chicago 3-2-1 crack spread of $20.
^2 Cash flow and operating cash flow are non-GAAP measures as defined in the
^3 Percentage change based on the midpoints of the ranges.

Christina Lake leads 2013 production growth
Cenovus expects oil production to average between 180,000 and 196,000 barrels
per day (bbls/d) net in 2013, an increase of 14% compared with forecast 2012
production. The increase is anticipated to come largely from Christina Lake
where phase D is expected to start producing at full capacity during the
second quarter of 2013. When phase D is fully operational, the project is
forecast to have production capacity of 98,000 bbls/d gross. An additional
increase of 40,000 bbls/d in gross production capacity is expected in the
third quarter with the start-up of phase E, a few months earlier than expected
and within budget. Christina Lake oil production is expected to average
between 47,000 and 52,000 bbls/d net in the coming year, a 60% increase
compared with forecast average 2012 production.

Startup times at Christina Lake have been greatly improved due to production
commencing in a higher-quality area of the reservoir. In addition, start-up
times were enhanced by the commercialization in 2012 of the company’s
accelerated start-up technology using steam dilation, which is among 140
technology development projects the company is working on. Cenovus considers
its investment in innovation and technology development to be essential to its
continued success.

The company’s Foster Creek facility demonstrated excellent operating
performance in 2012, running near, and even beyond its plant design capacity
of 120,000 bbls/d gross for much of the year. Expansion work at phases F, G
and H at Foster Creek is now underway with added production capacity expected
in 2014. Final partner approval of the first phase for the 130,000 bbls/d
gross Narrows Lake project was just received. Foster Creek, Christina Lake and
Narrows Lake are jointly owned with ConocoPhillips.

Production from conventional oil projects is expected to contribute to higher
volumes in 2013 as well. Cenovus expects a 17% increase in oil production at
Pelican Lake in 2013 due to infill drilling and the expansion of the polymer
enhanced oil recovery program. The company plans to increase production from
its tight oil assets in southern Alberta and build upon the success of this
year’s drilling programs.

“The anticipated increase in oil production for next year keeps us on track to
reach our target of 500,000 barrels per day of net oil production by the end
of 2021,” said John Brannan, Cenovus Executive Vice-President & Chief
Operating Officer. “The ability of our staff to reduce oil sands project
start-up times and continuously improve our production techniques while
successfully advancing new projects gives me the confidence that we’ll
continue to reach our milestones and maintain our status as a low-cost
developer and operator of oil sands projects.”

Average production forecast
                                   2013 budget  2012 guidance  % change^1
Foster Creek (Mbbls/d)               55 – 60       58              -
Christina Lake (Mbbls/d)             47 – 52       31              60
Total oil sands (Mbbls/d)            102 – 112     89              20
Pelican Lake (Mbbls/d)               26 – 28       23              17
Other conventional oil and NGLs      52 – 56       53              2
Total oil and NGLs (Mbbls/d)         180 – 196     165             14
Natural gas (MMcf/d)                 485 – 540     590             -13

^1 Percentage change based on the midpoints of the ranges.

Focus on operating costs
“Additional effort will be made in 2013 to address operating costs, including
using our size and scale to the company’s advantage,” Brannan said. “We
understand the importance of being an efficient operator and keeping costs in
check as we continue our expansions.”

Total operating costs in 2013 are anticipated to be slightly higher mainly due
to increased prices for natural gas and electricity needed to fuel the
company’s operations. Cenovus is also expecting higher chemical costs, mostly
for polymer at Pelican Lake. The company will work to increase efficiency
across its operations. This includes lowering drilling and completion costs,
improving waste treatment processes and reducing the number of well workovers.
The company is forecasting overall cost inflation to remain between 3% and 5%.

Capital investment focuses on oil sands
Cenovus’s forecast capital investment of $3.2 billion to $3.6 billion focuses
on its oil assets and is consistent with the company’s long-term strategy.
Cenovus is positioning itself well for the future, with approximately 60% of
the capital invested next year expected to contribute to production and cash
flow beyond 2013.

Approximately $2 billion of the capital budget is considered to be committed
capital that is dedicated to maintaining current operations and building
already approved oil sands expansions. The remaining budget is discretionary
capital that is focused on advancing oil sands projects through the regulatory
process and increasing conventional oil production. The discretionary capital
dedicated to future growth projects gives Cenovus a great deal of flexibility
in its spending so the company can react quickly to changing market conditions
and adjust plans if circumstances change. The phased nature of the company’s
oil sands expansions provides additional flexibility since the project plans
can be slowed if necessary. More than half of total 2013 capital investment is
focused on the company’s oil sands assets, primarily for expansions at Foster
Creek and Christina Lake, stratigraphic well drilling and the development of
Narrows Lake.

Capital investment at Christina Lake is anticipated to be in the range of $570
million to $630 million in 2013. The next expansion at Christina Lake, phase
E, is about 65% complete and phase F construction is advancing. Engineering
and design work is underway for Christina Lake phase G. Cenovus plans to
submit a regulatory application in 2013 for a proposed phase H expansion at
Christina Lake. Total production capacity is expected to reach 288,000 bbls/d
by the end of 2019, potentially increasing to as much as 300,000 bbls/d with

Foster Creek capital investment in 2013 is expected to be between $790 million
and $870 million.  The next three expansions at Foster Creek, phases F, G and
H, made significant progress in 2012, with overall work at phase F now 65%
complete and start-up anticipated in the third quarter of 2014. Progress is
also being made on phases G and H. Cenovus anticipates submitting an
application to regulators in 2013 for an additional Foster Creek expansion,
phase J. Ultimately, Cenovus expects Foster Creek will have the capacity to
produce 295,000 bbls/d and potentially as much as 310,000 bbls/d gross with

“We expect to continue delivering new phases at Foster Creek and Christina
Lake at industry-leading capital efficiencies due to the talent of our
workforce and our manufacturing approach to the development of these
high-quality reservoirs,” Ferguson said. “We anticipate expansions at both
projects will be brought on at a cost of $22,000 to $25,000 per flowing

Site preparation is already underway at Narrows Lake, with construction of the
phase A plant scheduled to start in the third quarter of 2013. The first phase
of the project is anticipated to have production capacity of 45,000 bbls/d,
with first oil expected in 2017. Capital investment in the project is forecast
to be between $140 million and $160 million next year.

Capital efficiencies at Narrows Lake are anticipated to be in the range of
$28,000 to $32,000 per flowing barrel, which are well below the industry
average. That’s higher than at the company’s existing oil sands operations
because Narrows Lake is a greenfield site, meaning all infrastructure,
including that needed to implement solvent aided process (SAP) has to be
built. Cenovus has been piloting SAP technology at Christina Lake. The company
mixes butane with the steam injected into the reservoir, helping to make the
oil thinner so it flows more freely to the producing well. It’s expected this
will help to increase production and reduce impacts on the environment as less
water and natural gas are used. Narrows Lake would be the industry’s first use
of SAP with butane on a commercial scale.

Additional capital will be invested in emerging steam-assisted gravity
drainage (SAGD) projects at Grand Rapids and Telephone Lake, both 100%-owned
by Cenovus. The company anticipates regulatory approval of the Grand Rapids
project late next year. Construction for the installation of a third mobile
steam generator is moving ahead at Grand Rapids. Steam injection started on
the second well pair during the third quarter of 2012, with first production
expected early in 2013. The company is encouraged by the steam distribution
that it has measured along the 1,200-metre long well. At Telephone Lake,
Cenovus is advancing the regulatory application for the project. The company
continues to operate its dewatering pilot, with water production and air
injection progressing as anticipated.

Cenovus expects to drill between 350 and 400 gross stratigraphic test wells in
2013 to help advance regulatory applications for additional expansions at
Foster Creek and Christina Lake and assess new oil sands resources. Capital
investment in the company’s undeveloped oil sands assets is expected to be a
key component in building net asset value as assessment work in these areas is
intended to help move the associated resources into the contingent category
and eventually to reserves.

Conventional oil opportunities
At Pelican Lake, approximately $560 million to $620 million of 2013 capital is
earmarked for the continued development of the polymer flood, infill drilling
and facility expansion. Capital investment in other conventional oil is
forecast to be between $670 million and $740 million in 2013. The company
continues to direct resources to tight oil opportunities, especially in
southern Alberta where Cenovus has had good results and holds a competitive
cost advantage due to its fee land holdings. Cenovus plans to invest only $25
million to $30 million in its natural gas assets. These properties are
expected to make a strong contribution of more than $400 million in operating
cash flow in excess of the capital spent on them.

Capital investment by asset ($ millions)
                            2013 budget  2012 guidance  % change
Foster Creek                  790 – 870     710 – 730       15
Christina Lake                570 – 630     575 – 590       3
Narrows Lake                  140 – 160     –               –
Emerging oil sands assets^1   270 – 300     370 – 380       -24
Pelican Lake                  560 – 620     520 – 540       11
Other conventional oil        670 – 740     770 – 790       -10
Natural gas                   25 – 30       50 – 55         -48
Refining                      100 – 125     120 – 130       -10

^1 Includes assets such as Grand Rapids and Telephone Lake.

Guidance updated
Along with issuing 2013 guidance, the company has adjusted its 2012 guidance
to reflect lower than anticipated cash flow in the fourth quarter of this
year. The change is primarily a result of wider light-heavy differentials
combined with lower benchmark crude oil prices. In addition, there were longer
than expected turnarounds at the company’s jointly owned U.S. refineries and a
one-time cash tax expense in the fourth quarter that’s expected to result in
cash tax benefits in future years. Cenovus’s forecast 2012 oil production
volumes remain on track. The guidance documents are available at

2013 milestones
Cenovus has set specific milestones for 2013 that will help direct its
progress and aid shareholders in measuring the company’s success. These
milestones include:

  *drilling 350 to 400 gross stratigraphic test wells and assessing results
  *submitting regulatory applications for Foster Creek phase J and Christina
    Lake phase H expansions
  *achieving first production in the third quarter at Christina Lake phase E
    (previously fourth quarter)
  *beginning facility construction at Narrows Lake phase A
  *initiating construction of an additional oil battery at Pelican Lake
  *receiving regulatory approval for Grand Rapids in the fourth quarter
  *further evaluating tight oil and other oil opportunities
  *growing reserves and contingent resources
  *almost doubling rail shipping capacity for oil to approximately 10,000
  *evaluating debottlenecking opportunities at the Wood River Refinery.

Reserves additions expected
Cenovus believes it will be in a position to add more than 250 million barrels
of proved reserves at its oil sands operations in 2012. The majority of the
additions are a result of the regulatory approval of Narrows Lake and the
recent partner approval of the project’s phase A. The Cenovus-wide 2012
reserves evaluation, prepared by independent qualified reserves evaluators, is
due in February 2013. Cenovus anticipates corporate proved finding and
development costs in 2012 to be in the range of $8.00 to $10.00 per barrel of
oil equivalent (boe), not including changes to future development costs. The
company expects its three-year average finding and development costs will be
about $6.00/boe based on 2010 and 2011 actuals and the midpoint of the 2012

Transportation and refining
The companycontinues to support various proposed pipeline projects through
commitmentsthat it expects willlead to increased shipping capacity of
Canadian oil to foreign markets. The full utilization of Cenovus’s firm
shipping capacity of 11,500 bbls/don the Trans Mountain Pipeline system to
the West Coast is helping to develop marketsin California and Asia. Cenovus
believes pipelines are still the most economicalway to transport oil, though
rail provides a practical alternative to get oil to markets that are currently
inaccessible by pipeline.The company anticipates almost doubling its capacity
next year for moving oil by rail to approximately 10,000 bbls/d, providing
greatermarketing flexibility.

The coker and refinery expansion (CORE) project at the jointly owned Wood
River Refinery in Illinois hasincreased heavy oil processing capacity to
between 200,000 and 220,000 bbls/d. The volume processed will be dependent
upon the quality of the available crudes and will be managed to maximize
economic benefit. The CORE project is contributing significantly to the
company’s integrated strategy. Cenovus and its partner, Phillips 66, plan to
evaluate possible debottlenecking opportunities next year in order to expand
the refinery’s capacity and allow more crude oil to be processed into refined
products.Cenovus anticipates capital investment of between $100 million and
$125 million in 2013 at the jointly owned Wood River and Borger refineries,
primarily dedicated tomaintaining refinery capacity, ensuring reliable
operations and progressing safety initiatives.

“Our integrated approach captures value from both the producing and refining
sides of the business and reduces our exposure to price volatility, helping to
ensure we have the cash flow needed to support our dividend and future
investment plans,” Ferguson said. “We remain committed to protecting and
enhancing that cash flow through integration, expansion of market access for
our product and the continuation of our price-hedging program. Our integrated
strategy has been a significant contributor to our success so far.”

Based on the wider light-heavy oil price differentials experienced in the
fourth quarter of 2012, Cenovus anticipates strong first quarter 2013
operating cash flow from its refining operations.

Building a solid workforce
Cenovus continues to recruit new employees to fill positions created by its
growth. The company expanded its workforce by about 20% in 2012 by hiring
approximately 575 employees. There are plans to hire between 450 and 500
people in 2013 and future years will continue to see additional workforce
growth as we expand our oil production. Cenovus’s reputation as an innovative
company with a culture that prioritizes safety and environmental stewardship
has assisted it in attracting new employees and retaining current ones.

Doubling net asset value
Cenovus continues to work toward its goal of doubling net asset value (NAV)
between 2010 and the end of 2015 and established a baseline NAV of $28.00 per
share at December 2009. Cenovus calculated its 2011 year-end NAV to be $37.00
per share, a 32% increase in the company’s first two years of operation.
Cenovus is scheduled to release its 2012 year-end NAV in February.

Divestiture opportunities
Although Cenovus’s 2013 normal-course divestiture plans aren’t reflected in
the 2013 budget, the company believes it’s important to maintain an ongoing
divestiture program as a form of capital discipline. Cenovus may seek
opportunities in the coming year to sell assets that the company determines to
be non-core to its operations.

Oil sands projects advancing
Cenovus is continually assessing the timelines and capacities associated with
each growth phase at its oil sands projects. Christina Lake phase E is now
expected to begin producing in the third quarter of 2013 instead of the fourth

Oil sands project schedule
                      Regulatory      First production   Expected production
Project phase        status         target            capacity (bbls/d)
Foster Creek^1 A –                                     120,000
F                     Approved        2014F              45,000^2
G                     Approved        2015F              40,000
H                     Approved        2016F              40,000
J                     Submit 2013F    2019F              50,000
Future optimization                                    15,000
Total capacity                                         310,000
Christina Lake^1 A                                     98,000
- D
E                     Approved        Q2-2013F           40,000
F                     Approved        2016F              50,000^3
G                     Approved        2017F              50,000^3
H                     Submit 2013F    2019F              50,000
Future optimization                                    12,000
Total capacity                                         300,000
Narrows Lake^1        Approved        2017F              130,000
Grand Rapids          Submitted       2017F              180,000
Telephone Lake^4      Submitted       TBD                90,000

^1 Properties 50% owned by ConocoPhillips.
^2 Includes 5,000 bbls/d gross expected to be submitted to the regulator in
^3 Includes 10,000 bbls/d gross expected to be submitted to the regulator in
^4  Projected total capacity of more than 300,000 bbls/d.

                          2013 Budget Webcast Today
                 9 a.m. Mountain Time (11 a.m. Eastern Time)

Cenovus will host a webcast and conference call today, December 12, 2012,
starting at 9 a.m. MT (11 a.m.ET). To participate, please dial 888-231-8191
(toll-free in North America) or 403-451-9838 approximately 10 minutes prior to
the conference call. An archived recording of the call will be available from
approximately 10 a.m. MT on December 12 until 10 p.m. MT on December 19, 2012
by dialing 855-859-2056 or 403-451-9481 and entering conference pass code:
98831812. Links to the webcast and presentation slides will be available at
www.cenovus.com, or via the URL:


  *Cenovus reports financial results in Canadian dollars and presents
    production volumes on a net to Cenovus before royalties basis, unless
    otherwise stated. Cenovus prepares its financial statements in accordance
    with International Financial Reporting Standards (IFRS).

This news release contains references to non-GAAP measures as follows:

  *Operating cash flow is defined as revenues, less purchased product,
    transportation and blending, operating expenses, production and mineral
    taxes plus realized gains, less realized losses on risk management
    activities and is used to provide a consistent measure of the cash
    generating performance of the company’s assets and improves the
    comparability of Cenovus’s underlying financial performance between
  *Cash flow is defined as cash from operating activities excluding net
    change in other assets and liabilities and net change in non-cash working
    capital, both of which are defined on the Consolidated Statement of Cash
    Flows in Cenovus’s interim and annual consolidated financial statements.
  *Operating earnings is defined as net earnings excluding non-operating
    items such as the after-tax impacts of a gain/loss on discontinuance, the
    gain on asset acquisition, the after-tax gain/loss of unrealized
    mark-to-market accounting for derivative instruments, the after-tax
    unrealized gain/loss on translation of U.S. dollar denominated notes
    issued from Canada and the partnership contribution receivable, the
    after-tax foreign exchange gain/loss on settlement of intercompany
    transactions, after-tax gains or losses on divestiture of assets, deferred
    income tax on foreign exchange related to U.S. dollar intercompany debt
    recognized for tax purposes only and the effect of changes in statutory
    income tax rates. Management views operating earnings as a better measure
    of performance than net earnings because the excluded items reduce the
    comparability of the company’s underlying financial performance between
    periods. The majority of the U.S. dollar debt issued from Canada has
    maturity dates in excess of five years.
  *Free cash flow is defined as cash flow in excess of capital investment,
    excluding net acquisitions and divestitures, and is used to determine the
    funds available for other investing and/or financing activities.
  *Debt to capitalization and debt to adjusted EBITDA are two ratios that
    management uses to steward the company’s overall debt position as measures
    of the company’s overall financial strength. Debt is defined as short-term
    borrowings and long-term debt, including the current portion, excluding
    any amounts with respect to the partnership contribution payable and
    receivable. Capitalization is a non-GAAP measure defined as debt plus
    shareholders’ equity. Adjusted EBITDA is defined as adjusted earnings
    before interest income, finance costs, income taxes, depreciation,
    depletion and amortization, exploration expense, unrealized gain or loss
    on risk management, foreign exchange gains or losses, gains or losses on
    divestiture of assets and other income and loss, calculated on a trailing
    12-month basis.

These measures have been described and presented in this news release in order
to provide shareholders and potential investors with additional information
regarding Cenovus’s liquidity and its ability to generate funds to finance its
operations. For further information, refer to Cenovus’s most recent
Management’s Discussion & Analysis (MD&A) available at www.cenovus.com.

This news release contains certain forward-looking statements and other
information (collectively “forward-looking information”) about our current
expectations, estimates and projections, made in light of our experience and
perception of historical trends. Forward-looking information in this news
release is identified by words such as “projected”, “anticipate”, “believe”,
“intend”, “expect”, “plan”, “forecast”, “target”, “focus”, “scheduled”,
“potential”, “may” or similar expressions and includes suggestions of future
outcomes, including statements about our growth strategy and related
milestones and schedules, projected future value or net asset value, forecast
operating and financial results, planned capital expenditures, expected future
production, including the timing, stability or growth thereof, expected future
refining capacity, anticipated finding and development costs, expected
reserves and contingent and prospective resources estimates, potential
dividends and dividend growth strategy, anticipated timelines for future
regulatory, partner or internal approvals, forecasted commodity prices, future
use and development of technology and projected increasing shareholder value.
Readers are cautioned not to place undue reliance on forward-looking
information as our actual results may differ materially from those expressed
or implied.

Developing forward-looking information involves reliance on a number of
assumptions and consideration of certain risks and uncertainties, some of
which are specific to Cenovus and others that apply to the industry generally.

The factors or assumptions on which the forward-looking information is based
include: the assumptions underlying our current guidance, available at
www.cenovus.com; our projected capital investment levels, the flexibility of
capital spending plans and the associated source of funding; estimates of
quantities of oil, bitumen, natural gas and liquids from properties and other
sources not currently classified as proved; our ability to obtain necessary
regulatory and partner approvals within forecasted timelines; the successful
and timely implementation of capital projects; our ability to generate
sufficient cash flow from operations to meet our current and future
obligations; and other risks and uncertainties described from time to time in
the filings we make with securities regulatory authorities.

The risk factors and uncertainties that could cause our actual results to
differ materially, include: the volatility of and assumptions regarding oil
and gas prices; the effectiveness of our risk management program, including
the impact of derivative financial instruments and the success of our hedging
strategies; the accuracy of cost estimates; fluctuations in commodity prices,
currency and interest rates; fluctuations in product supply and demand; market
competition, including from alternative energy sources; risks inherent in our
marketing operations, including credit risks; maintaining desirable ratios of
debt to adjusted EBITDA as well as debt to capitalization; our ability to
access various sources of debt and equity capital; success of hedging
strategies; accuracy of our reserves, resources and future production
estimates; our ability to replace and expand oil and gas reserves; our ability
to maintain our relationship with our partners and to successfully manage and
operate our integrated heavy oil business; reliability of our assets;
potential disruption or unexpected technical difficulties in developing new
products and manufacturing processes; refining and marketing margins;
potential failure of new products to achieve acceptance in the market;
unexpected cost increases or technical difficulties in constructing or
modifying manufacturing or refining facilities; unexpected difficulties in
producing, transporting or refining of crude oil into petroleum and chemical
products; risks associated with technology, its implementation and its
application to our business; the timing and the costs of well and pipeline
construction; our ability to secure adequate product transportation; changes
in the regulatory framework in any of the locations in which we operate,
including changes to the regulatory approval process and land-use
designations, royalty, tax, environmental, greenhouse gas, carbon and other
laws or regulations, or changes to the interpretation of such laws and
regulations, as adopted or proposed, the impact thereof and the costs
associated with compliance; the expected impact and timing of various
accounting pronouncements, rule changes and standards on our business, our
financial results and our consolidated financial statements; changes in the
general economic, market and business conditions; the political and economic
conditions in the countries in which we operate; the occurrence of unexpected
events such as war, terrorist threats and the instability resulting therefrom;
and risks associated with existing and potential future lawsuits and
regulatory actions against us.

Readers are cautioned that the foregoing lists are not exhaustive and are made
as at the date hereof. For a full discussion of our material risk factors, see
“Risk Factors” in our most recent annual information form, Form 40-F,
available at www.cenovus.com. Readers should also refer to “Risk Management”
in our annual MD&A for the year ended December 31, 2011, our current MD&A and
to the risk factors described in other documents we file from time to time
with securities regulatory authorities, available at www.sedar.com,
www.sec.gov and www.cenovus.com.

With respect to the particular year being valued, the net asset value (NAV)
disclosed herein is based on the number of issued and outstanding Cenovus
shares adjusted for the dilutive effect of stock options or other contracts as
at December 31. We calculate NAV as an average of (i) our average trading
price for the month of December, (ii) an average of net asset values published
by external analysts in December following the announcement of our budget
forecast, and (iii) an average of two net asset values based primarily on
discounted cash flows of independently evaluated reserves, resources and
downstream data and using internal corporate costs, with one based on constant
prices and costs and one based on forecast prices and costs.
Wedge Well™ is a registered trademark of Cenovus Energy Inc.

Cenovus Energy Inc.
Cenovus Energy Inc. is a Canadian, integrated oil company. It is committed to
applying fresh, progressive thinking to safely and responsibly unlock energy
resources the world needs. Operations include oil sands projects in northern
Alberta, which use specialized methods to drill and pump the oil to the
surface, and established natural gas and oil production in Alberta and
Saskatchewan. The company also has 50% ownership in two U.S. refineries.
Cenovus shares trade under the symbol CVE, and are listed on the Toronto and
New York stock exchanges. Its enterprise value is approximately $30 billion.
For more information, visit www.cenovus.com.

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Director, Media Relations
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