Cenovus Energy Inc. reported a smaller-than-expected quarterly loss as operating costs fell, while oil sands production rose.

Oil and gas companies have sharply cut costs and have been consolidating assets following a two-year slump in crude prices.

In April, Cenovus agreed to buy most of ConocoPhillips' (NYSE: COP) Canadian oil and gas assets in a CA$17 billion deal that effectively doubled the size of the Canadian oil company.

Cenovus, which has laid off nearly one-third of its workforce since the end of 2014, said operating costs for its oil sands fell 6% to CA$8.97 per barrel in the first quarter of 2017.

The company said on April 26 that the operating margin was CA$450 million, a threefold increase from 2016, helped by higher commodity prices.

Total oil production rose about 19% to 234,914 barrels per day.

The company's net profit was CA$211 million (US$155.54 million), or 25 Canadian cents per share, in the first quarter ended March 31, compared with a loss of CA$118 million, or 14 Canadian cents per share, a year earlier.

Operating loss was 5 Canadian cents per share, while analysts, on average, were estimating a loss of 8 Canadian cents per share, according to Thomson Reuters I/B/E/S.

The Calgary, Alberta-based company has lost nearly one-fifth of its value since the deal with ConocoPhillips was announced in late March. (US$1 = CA$1.3566)