Christina Lake volumes increased 55% as phase D reached full production capacity and phase E, the company’s 10^th oil sands phase, began production in July. The company expects to achieve full production capacity from this phase in the first quarter of 2014.

Cenovus expects Christina Lake to achieve production of between 124,000 bbls/d and 136,000 bbls/d gross this year. This represents production volumes of 95% of design capacity, which the company is targeting for the current phases.

Higher production at Christina Lake more than offset an 8% year-over-year decline in volumes at Foster Creek. The decrease at Foster Creek was partially the result of catching up on well maintenance that was deferred in 2012. In addition, the evolution to common steam chambers in the initial project areas at Foster Creek prompted Cenovus to evaluate its long-term reservoir management plan and apply new techniques to optimize production performance. This includes determining the optimal reservoir pressure, drilling more wells using Wedge Well technology and moving more wells to the final stage of production, which is called the blowdown stage. Blowdown enables the company to move steam from older well pads that no longer need it for continued production to new areas of the reservoir. For the fourth quarter of 2013, Foster Creek output was in line with company expectations.

Total conventional oil production, including the heavy oil operation at Pelican Lake, averaged almost 77,000 bbls/d for the year, up 1%.

The company’s proved bitumen reserves increased 8% to more than 1.8 billion bbls at the end of 2013, according to its independent reserves and contingent resources evaluation. Total proved reserves reached almost 2.3 billion barrels of oil equivalent (BOE) in 2013, up 5% from the previous year, resulting in a 214% production replacement ratio.

Proved plus probable bitumen reserves increased 6% to more than 2.5 billion bbls, while the company’s total proved plus probable reserves increased 4% to 3.2 billion BOE. Economic bitumen best estimate contingent resources increased 2% from 2012 to 9.8 billion bbls.

Expanding market access. In 2013, the company committed to move 200,000 bbls/d on the proposed Energy East pipeline. It has additional shipping capacity of 175,000 bbls/d on proposed pipelines to the West Coast and 150,000 bbls/d on planned pipelines to the US Gulf Coast, which is evenly split between Enbridge’s Flanagan South and TransCanada’s Keystone XL systems.

In addition to using pipelines, the company sold an average of 6,150 bbls/d of conventional oil that was transported by rail in 2013. By the end of 2013, Cenovus had rail capacity to transport 10,000 bbls/d of oil. Cenovus plans to begin using additional rail cars to transport some of its oil sands production by mid-2014 and expects to start taking delivery of 825 coiled and insulated leased rail cars in late 2014.

As part of its rail strategy, Cenovus entered into two multi-year terminal agreements in 2013. The company has contracted with Canexus for bitumen blend and unit train loading services at Bruderheim, Alberta as well as for rail loading services with US Development Group/Gibson Energy’s Hardisty, Alberta facility. Ultimately, the company expects to have the capacity to move up to 30,000 bbls/d of its blended oil volumes using rail by the end of 2014.