Cenovus Energy Stock (TSE:CVE) Gains as it Pulls Back Amid Wildfires

For those not already aware, wildfires are running rampant across northern Alberta right now, to the point where the smoke has prompted an air quality alert for half of Minnesota. For oil stock Cenovus Energy (TSE:CVE), the wildfires have prompted a pullback in operations. But that bit of caution was good enough for investors, who sent shares up nearly 1.5% in Monday morning’s trading.

Cenovus Energy has pulled back on its Christina Lake operation, where oilsands are currently being accessed and processed, leaving only a skeleton crew of “essential personnel” at the facility. The move was not taken in haste, either, as Cenovus started to pull back said operations on May 29. However, the move seems to have been more of an “abundance of caution” sort of thing than anything, as there has been no damage to any of its infrastructure in the area thus far, based on the latest inspections.

Cenovus plans to get back to normal once it is safe to do so, reports note. Right now, Cenovus is losing out on about 238,000 barrels of oil per day for every day the operation is shut down. With oil up around $65 per barrel right now—depending, of course, on variety—that represents tens of millions of dollars per day lost.

A Tale of Two Responses

And while Cenovus is pulling back on its operations, another company in the path of the wildfires, Foran Mining (TSE:FOM) is taking a different approach. It is not so much shutting down, but rather, fighting back. Part of its “asset protection plan,” it took 44 employees and a set of “specialized wildfire contractors” to construct “…fire attenuation systems and reinforced firebreaks.”

Thanks to Foran Mining, and some positive weather conditions, the active fire edge is now holding its distance from tailings storage, at just around one kilometer, and three kilometers from the main site. Indeed, the McIlvenna Bay site has sustained no damage so far, and both employees and contractors are all accounted for.

Is Cenovus Energy a Good Stock to Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:CVE stock based on 10 Buys, one Hold and one Sell assigned in the past three months, as indicated by the graphic below. After a 32.26% loss in its share price over the past year, the average TSE:CVE price target of C$25.46 per share implies 38.45% upside potential.

See more TSE:CVE analyst ratings

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