Cenovus Energy Inc. (CVE Quick QuoteCVE - Free Report) has provided a glimpse of its capital budget for 2022.

For next year, Cenovus Energy has set a guidance for capital spending in the range of $2.6 billion to $3 billion. This suggests an improvement from this year’s capital spending guidance of $2.3 billion to $2.7 billion, as reported by CVE.

Of the total capital budget for 2022, Cenovus Energy allocated $1.7 billion to $2 billion toward upstream operations. In upstream, $1.35 billion to $1.6 billion will likely be invested by CVE for oil sand operations.

With higher capital spending, Cenovus Energy expects its production to improve year over year in 2022. From upstream operations, the company is expecting average production in the range of 780 thousand barrel of oil equivalent (MBoE) to 820 MBoE, suggesting an improvement of 4% from this year’s production guidance of 750 MBoE to 790 MBoE.

In downstream business, CVE is projecting throughput in the range of 530 thousand barrels to 580 thousand barrels, suggesting an improvement of 6% from 2021’s guidance.

Cenovus Energy also has a strong focus on returning capital to shareholders. CVE expects to allocate roughly 50% of excess free funds flow to shareholder returns in 2022. Next year's commitment to growing shareholders returns comprises the plan to buy back up to 146.5 million common shares.

Thus, it seems that Cenovus Energy will be banking on strengthening upstream and downstream operations to increase free funds flow and reward shareholders with buybacks. CVE is also focusing on reducing debt loads.

Cenovus Energy added that backed by its robust business model and asset base, in the next five years, it is committed to delivering sustained production along with growth in throughput. The five-year plan also comprises cutting absolute scope 1 and 2 emissions of greenhouse gases.

Cenovus Energy Inc Price

Cenovus Energy Inc price | Cenovus Energy Inc Quote

Currently, Cenovus Energy carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Whiting Petroleum Corporation ,Continental Resources, Inc. and Callon Petroleum Company . While Continental Resources and Callon Petroleum carry a Zacks Rank #2 (Buy), Whiting Petroleum sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Whiting Petroleum is a leading upstream energy company and is the top producer of crude oil in North Dakota. With oil price improving at a healthy pace, Whiting Petroleum expects to continue generating handsome cashflows while maintaining a healthy balance sheet.

Headquartered in Denver, CO, Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Looking at the price chart, WLL has gained 179.3% year to date, outpacing the 107.7% rise of the composite stocks belonging to the industry.

Continental Resources is also a leading upstream energy company with proven reserves in North Dakota and Oklahoma. The oil inventories of Continental Resources are among the best in the industry.

Headquartered in Oklahoma City, Continental Resources has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Considering the price chart, the company has gained 184.7% so far this year, outpacing the 107.7% improvement of the composite stocks belonging to the industry.

Callon Petroleum is also a leading exploration and production company with a strong presence in prolific unconventional resources that comprise Permian Basin and Eagle Ford Shale play.

Callon Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Looking at the price chart, CPE has gained 304.9% year to date, outpacing the 107.7% improvement of the composite stocks belonging to the industry.