10:58 AM EST, 12/12/2024 (MT Newswires) -- (Adds National Bank commentary in sixth paragraph)

Cenovus Energy ( CVE ) on Thursday released its 2025 corporate guidance that envisions $4.6 billion to $5 billion in capital spending.

The company expects to deliver upstream production of 805,000 barrels of oil equivalent per day (boe/d) to 845,000 boe/d, a 4% increase from 2024 levels, and downstream crude unit utilization of 90% to 95%.

Capital spending will include about $3.2 billion of sustaining capital. An additional $1.4 billion to $1.8 billion will be used to advance upstream growth projects.

General and administrative costs are expected to remain flat relative to 2024.

"Cenovus will deliver important milestones on our major growth projects in 2025, including achieving first oil from Narrows Lake, installation of the West White Rose offshore facilities and commencement of drilling, and preparations for first steam at the Foster Creek optimization project," Cenovus President and CEO Jon McKenzie said.

Cenovus kept its Outperform rating and $31 price target at National Bank of Canada in the bank's first look at the news. The price target is based on a 2025 6.0x EV/DACF multiple.

The bank said overall Cenovus' capital spending and production guidance is largely in line with both its estimates and street forecasts.

National Bank is currently forecasting 2025 free cash flow (FCF) of near $3.9 billion on a payout ratio of 61%. The bank will be publishing its revised estimates in tandem with its 2025 Outlook next week.

Cenovus' share price was down more than 1% at last look to $21.48 on the TSX.

Price: 21.48, Change: -0.23, Percent Change: -1.06