Canada’s Cenovus Energy said on Wednesday it would double its dividend and begin buying back shares after the Calgary-based oil sands major posted a quarterly profit versus a year-ago loss.

Cenovus posted a net income of C$551 million (US$444.5 million) for the quarter ending 30 September compared to a C$194 million loss a year earlier.

Citing increased production and higher oil demand, the company announced it will commence a share buyback programme of up to 146.5 million of the company’s common shares, representing approximately 10% of its public float, as it expects to “imminently” achieve its interim net debt target of less than C$10 billion.

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According to Cenovus, it expects, at current commodity prices, to execute the planned share buyback in 2022, while achieving net debt under C$8 billion by mid‐year.

Third-quarter production averaged 804,800 barrels of oil equivalent per day, up 71% compared to 471,799 boepd a year ago.

The production increase was driven by record average daily oil sands production at the company’s Christina Lake and Foster Creek assets.

“Production at Christina Lake average is about 243,000 barrels per day in the third quarter, a 5% increase over the prior record set in the second quarter,” said Cenovus chief executive Alex Pourbaix on the third quarter earnings call.

“This reflected re-development and re-drill wells coming online in the quarter. These re-development wells are high returns, short cycle projects we have included in the capital budget this year and reflect the kind of opportunities that exist for Christina Lake,” he added.

Pourbaix noted that emulsion treating issues at Foster Creek in the second quarter impacted production into July. However, he highlighted that Foster Creek was returned to full production in mid-July.

“With our Q3 results, we are pleased to report that the teams not only recovered Foster to full rates but went on to deliver production of over 200,000 barrels per day from the asset in each of August and September,” he said.

“For perspective, Foster Creek is an asset with a nameplate capacity of 180,000 barrels per day. This is just another demonstration of our industry, leading asset quality and operating expertise in the oil sands.”

The total upstream operating margin was C$2.4 billion, up from C$1.9 billion in the second quarter. Cenovus continues to expect 2021 total upstream production volumes to range between 750,000 boepd and 790,000 boepd.

Cenovus reported output from its offshore business averaged 73,700 boepd, generating an operating margin of C$328 million.

The company’s Asia-Pacific assets had production of 59,800 boepd with total realised sales pricing of C$71.99 per boe in the quarter, based on long‐term contracted pricing for natural gas and annual contracted pricing for natural gas liquids.

“Our Asia Pacific operations continued performing well with daily production of 60,000 barrels of oil equivalent per day in the third quarter, which was in line with the second quarter,” said Pourbaix.

“Production rose in Indonesia in response to strong demand, offsetting production impacts of planned maintenance of assets in China during the quarter.”

In respect to its Atlantic business, Pourbaix reiterated that the company received about C$75 million during the quarter from “exiting partners as a contribution towards future decommissioning liabilities with the restructuring of working interests in the Terra Nova field,” as was previously announced.