Cenovus Energy Inc. will redeem its 2.577% Series 1 and 3.948% Series 2 preferred shares on March 31, 2026, paying $25.00 per share for a total cash outlay of $300 million that will be funded primarily from cash on hand.
The redemption removes preferred‑share debt that has been outstanding since 2019, reducing long‑term liabilities and improving the company’s leverage profile. By eliminating the fixed dividend obligations associated with the preferred shares, Cenovus can redirect capital toward shareholder returns—such as dividends or share buybacks—or toward strategic investments in its upstream and downstream operations.
Cenovus reported strong Q4 2025 results, with net earnings of $934 million versus $1.3 billion in the prior quarter and full‑year 2025 net earnings of $3.9 billion compared with $3.1 billion in 2024. The company achieved record upstream production of 917,900 barrels of oil equivalent per day and downstream crude throughput of 465,500 barrels per day, operating at an overall utilization rate of 98%. With a current ratio of 1.57, a debt‑to‑equity ratio of 0.35, a BBB credit rating, and a preferred‑shares rating of Pfd‑3, Cenovus demonstrates strong liquidity and a solid balance sheet. In Q4 2025, the company returned $1.1 billion to shareholders and has maintained dividend payments for 18 consecutive years.
The final dividends on the preferred shares will be $0.16106 per Series 1 share and $0.24337 per Series 2 share. The record date for the dividend is March 13, 2026, and the payment will be made on March 31, 2026, the same day the redemption takes effect.
This redemption is part of Cenovus’s ongoing strategy to streamline its capital structure. The company previously redeemed Series 3 in November 2024 and Series 5 in Q1 2025, underscoring its confidence in cash flow and its commitment to reducing capital‑structure complexity. Investors are likely to view the move favorably as it signals a focus on liquidity, balance‑sheet strength, and enhanced shareholder value.
The action aligns with Cenovus’s broader focus on maintaining a robust cash position, improving leverage, and providing a clearer path for future shareholder returns or strategic investments.
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