(Bloomberg) -- Cenovus Energy Inc. is holding back on spending to increase oil and gas production even as Russia’s invasion of Ukraine keeps oil above $100 a barrel.

The oil sands company’s $300 million boost to total capital expenditures for the year will cover increased costs to complete the rebuild of the Superior Refinery in the U.S. Spending on oil sands and conventional oil and gas output was unchanged from previous guidance in December. The outlook for oil sands production was cut by about 3%, while forecasts for offshore and conventional oil and gas production were also unchanged. 

Cenovus is limiting growth even with oil prices in excess of $100 as buyers scramble to find alternatives to Russian crude after its invasion of Ukraine. Earlier this year, the Canadian government said the country could increase oil output by about 200,000 barrels a day to make up for lost supplies. 

Cenovus evaluates projects as viable if they generate returns when oil prices are low, around $45 a barrel, Jonathan McKenzie, chief operating officer, said on an earnings call. “We are kind of very religious on how we allocate capital.”

The company announced it would triple its dividend as it nearly doubled operating earnings guidance. Cenovus plans to use a windfall of cash to reduce its net debt to C$4 billion ($3.12 billion) as early as the end of this year, at which time 100% of excess free fund flows will be returned to shareholders through share buybacks and variable dividends. 

Cenovus is slated to add new gas production to its Malaysian operations later this year and the Terra Nova vessel, drydocked in Spain, is on schedule to return to operations off the Atlantic Coast by the end of this year, raising output by 10,000 barrels a day. Cenovus also plans to make a decision on its the West White Rose offshore project, which is 65% complete, in the “coming weeks.” The project off Newfoundland would add 45,000 barrels a day to Cenovus’ output in the years after it starts in 2026.  

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