Once the war is over we do expect the sector to correct somewhat, but likely not by the same amount it rose. In other words, we think the sector outlook remains decent, one way or the other. The war certainly is dragging on. EPS beat estimates by 3%, though revenue slightly missed. Cenovus' record upstream output, higher crude prices and a full-quarter MEG contribution point to further cash-flow acceleration in 2Q and into 2026, assuming oil prices avoid a sharp pullback. Guidance calls for 945,000-985,000 barrels a day of upstream production for the full year, with growth projects at Christina Lake North, Sunrise and West White Rose adding momentum. Shareholder returns should remain central after the 10% dividend increase and 1Q buybacks, though repurchases may be more measured than in 2025 as Cenovus balances excess cash returns with MEG-related leverage and its C$4 billion net-debt goal. It remains one of our favourites in the sector.
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