CVE’s cost structure continued to decline in 2Q16, even prior to ramp-up of two large projects in 2H16e. Our go-forward CFPS estimates are modestly improved as is our RENAV. Target price increased $0.50 to $18.50/share. The stock looks inexpensive relative to our longer term views, but expensive at US$60/bbl WTI. CVE’s core assets are currently generating low margins (bitumen, mid-west U.S. refining).