A second-quarter loss for the Canadian oil company, Cenovus, might come to a surprise to many due to the measures taken by the company to prevent such a thing from happening.
The Calgary-based company bumped up its productivity as well as cut oil sands operating costs but were helpless against the fall in oil and gas prices.
The loss Cenovus suffered in Q2 is in contrast to a profit it gained a year ago. By the end of June last year, the company recorded net profits of $126 million CDN or 15 cents per share but surprisingly suffered losses of $267 million CDN or 32 cents per share a year later.
However, the company did do well in cutting its expenses. Cenovus probably would have recorded profits if only an equally impactful drop in oil prices didn’t factor in. The company did successfully manage to boost production by 9%, cut oil sands operating costs by 24% as well as effectively reduce its workforce. The latest job cuts now also mean that Cenovus have now cut up to 31% of its initial workforce since 2014.
On the other hand, losses could have been avoided if only West Texas Intermediate oil prices didn’t fall by 24%.