NEW YORK (TheStreet) -- Global oil prices may be going downhill but investors won't see a slowdown in Cenovus Energy's  (CVE - Get Report)  production growth.

Cenovus Energy, of Calgary, is one of the four largest Canadian oil and gas producers, which includes Suncor Energy (SU - Get Report) , Husky Energy (HUSKF) and Imperial Oil (IMO - Get Report) . Cenovus focuses on producing oil sands, a naturally occurring mixture of sand, water and an extremely viscous oil called bitumen, that are abundantly found in Canada.

Cenovus Energy's shares, at around $29, are down 3.4% for the year to date. 

Over the last four weeks, benchmark Brent and WTI crude oil prices have fallen by 9.8% and 5.1%, respectively. In a phone interview, Michael Dunn, analyst at FirstEnergy Capital, said "somewhat regardless of the oil prices," Cenovus Energy will continue to grow its oil production over the next few years.

That is because once the development work on the Cenovus projects approved several years ago gets started, it's not going to stop. "It's not like drilling at the Bakken where when oil prices go down, you are not drilling as many wells," Dunn explained, referring to North Dakota's oil and gas producing region. Moreover, the company's balance sheet is in a "good shape" which will allow it to pursue its expansion plans.

In an email to the TheStreet, Brett Harris, Cenvous Energy's spokesperson, said the ongoing weakness in the international oil prices has been largely offset by the strength in the domestic heavy oil prices in Canada.

Moreover, Cenovus Energy could continue making profits even if oil prices drop to $70 per barrel from the current levels of around $90. This is because the company's supply costs of between $40 and $65 per barrel "are globally competitive and place us in a strong position," Harris added. "So we have not adjusted any of our near-term growth plans."

Earlier in mid-September, Cenovus Energy said that it has achieved first oil production from the sixth phase of its Foster Creek oil sands project in Alberta, which will allow the company to gradually increase its output by 30,000 barrels a day within the next 18 months.

Meanwhile, the final two phases of Foster Creek, representing total capacity of 60,000 barrels a day, are on track to report first production by the end of 2015 and 2016. This will bring Foster Creek's total capacity to 210,000 barrels a day, which could increase by up to 35,000 barrels a day following project ramp-ups -- that is huge for Cenovus Energy whose oil sand production averaged 125,000 barrels a day in the second quarter.

Besides Foster Creek, Cenovus is working on two other major oil sand projects that will give a boost to the company's production in the coming years. One of these projects, called Christina Lake in northern Alberta, is about as big as Foster Creek in terms of potential daily production and the size of reserves.

Christina Lake is also undergoing phased development and has already made a big impact on the company's performance. In the previous quarter, Cenovus reported record cash flows and a better-than-estimated 85% jump in adjusted earnings mainly due to the 77% year-over-year increase in production from Christina Lake.

Harris said the company's expansion plans for Foster Creek and Christina Lake "remain on track."

"Given that all of our current expansion projects are being funded by internally generated cash flow, this should increase our production per share, and cash flow per share," Harris said. 

The Foster Creek and Christina Lake are two of the Canadian oil sands producer's largest projects and are 50% owned by the American oil giant ConocoPhillips (COP - Get Report) .

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.


TheStreet Ratings team rates CENOVUS ENERGY INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CENOVUS ENERGY INC (CVE) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

You can view the full analysis from the report here: CVE Ratings Report