Investing

is now the time to invest in oil stocks?

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Deal Fanatic
Jul 12, 2008
6047 posts
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GTA
CNQ, Suncor, Imperial all up big time. In the US, Chevron, Exxon Up as well with Halliburton up almost 10% as well.

So the article is just coincidence but good news as well.
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Sep 21, 2007
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...
Suncor Energy reports second quarter 2020 results

https://finance.yahoo.com/news/suncor-e ... 00012.html

Suncor’s second quarter 2020 operating loss was $1.489 billion ($0.98 per common share), compared to operating earnings of $1.253 billion ($0.80 per common share) in the prior year quarter. In the second quarter of 2020, crude oil and refined product realizations decreased significantly, with crude oil and crack spread benchmarks declining by more than 50% compared to the prior year quarter due to the impacts of the COVID-19 pandemic and OPEC+ supply issues. The decline in consumer demand for refined products resulted in lower crude oil demand and lower overall upstream production volumes and refinery crude throughput as the company managed its operations to meet demand levels. Operating losses were minimized by the decrease in costs associated with lower production as well as cost reduction initiatives executed in the second quarter of 2020. The second quarter of 2020 was also impacted by the realization of $397 million in after-tax hydrocarbon inventory losses, recognized in net earnings in the first quarter of 2020, and a FIFO inventory valuation loss of $146 million after-tax on the decline in value of refinery feedstock.

Net (Loss) Earnings

Suncor’s net loss was $614 million ($0.40 per common share) in the second quarter of 2020, compared to net earnings of $2.729 billion ($1.74 per common share) in the prior year quarter. In addition to the factors impacting operating (loss) earnings discussed above, the net loss for the second quarter of 2020 included a $478 million unrealized after-tax foreign exchange gain on the revaluation of U.S. dollar denominated debt but excluded the $397 million after-tax hydrocarbon inventory loss that was recognized in net earnings in the first quarter of 2020.

Net earnings in the prior year quarter included a one-time deferred income tax recovery of $1.116 billion associated with a staged reduction to the Alberta corporate income tax rate of 1% each year from 2019 to 2022, an after-tax gain of $139 million on the sale of the company’s interest in Canbriam Energy Inc. (Canbriam) and a $221 million unrealized after-tax foreign exchange gain on the revaluation of U.S. dollar denominated debt.
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
Deal Guru
Aug 17, 2008
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Update to OVV post

Energy’s Winning Wagers: Against Natural-Gas Prices, for Natural-Gas Producers - WSJ
July 23, 2020 5:30 am ET
https://www.wsj.com/articles/energys-wi ... 1595496600
Images
  • Natural-Gas Prices Drop, Producer Shares Rise p1.JPG
  • Natural-Gas Prices Drop, Producer Shares Rise p2.JPG
  • OVV.JPG
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Guru
Aug 17, 2008
10943 posts
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I didn't start TRP here nor here so a couple of dollars higher must be the right price :rolleyes: https://invst.ly/rn21r

Earnings were out yesterday, https://www.tcenergy.com/announcements/ ... l-results/

Update
Rinse and repeat or does it breakout? https://invst.ly/rn3bc
Last edited by MrMom on Jul 31st, 2020 4:23 pm, edited 1 time in total.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Sr. Member
Apr 7, 2017
555 posts
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Brantford
Added HSE & SES today into my portfolio again
Loosing money on CNQ & SU
Deal Guru
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Sep 21, 2007
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all of them are bleeding.. i'm buying back into HSE when it's low 3's again.
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
Deal Guru
Aug 17, 2008
10943 posts
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MrMom wrote: I didn't start TRP here nor here so a couple of dollars higher must be the right price :rolleyes: https://invst.ly/rn21r

Earnings were out yesterday, https://www.tcenergy.com/announcements/ ... l-results/

Update
Rinse and repeat or does it breakout? https://invst.ly/rn3bc
* It broke out higher on the 15 min chart, https://invst.ly/rob3p
* Longer term look, https://invst.ly/rob4r
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Guru
Aug 17, 2008
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Canadian Natural buys Painted Pony for $344 mln to boost Western Canada acreage

Aug 10 (Reuters) - Canadian Natural Resources Ltd said on Monday it will buy smaller rival Painted Pony Energy Ltd for about C$461 million ($344.26 million) including debt, as Canada's biggest oil and gas producer seeks to expand its Western Canada acreage.

Natural gas prices have come under pressure from reduced consumption as efforts to tackle the COVID-19 pandemic resulted in a drop in manufacturing activities, while cancelled LNG exports have led to high natural gas inventories.

"This transaction also allows us to further insulate against natural gas costs in our oils sands operations and has minimal impact on the company's low overall corporate decline rate," said Canadian Natural President Tim McKay in a statement.

Canadian Natural said the deal includes Painted Pony's properties in Northeast British Columbia areas of Blair, Daiber, Kobes and Townsend, which together produce about 270 million cubic feet per day of natural gas and 4,600 barrels per day of natural gas liquids (NGLs).

According to the terms, Canadian Natural Resources will acquire Painted Pony's outstanding shares for C$0.69 per share in cash, a premium of 17% to Friday's closing price on the Toronto Stock Exchange.

Canadian Natural will also take on about C$350 million of Painted Pony's debt. The companies expect to close the deal in the second half of the year.

The slump in oil and gas prices has also sent energy stocks to record lows, providing larger companies with a chance to increase their holdings by buying smaller rivals for cheap.

Last month, U.S. oil major ConocoPhillips agreed to buy land from Kelt Exploration Ltd in Canada's Montney shale oil play for $375 million, expanding its existing position in the region at an attractive price.

PR: https://www.cnrl.com/upload/media_eleme ... y-ltd..pdf
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Guru
Aug 17, 2008
10943 posts
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This week, sold MEG in one acct @ $4.15 & still hold in another. Added to WCP @ $2.79 & considering BIR.

Update: Aug 18
Back on the bid for small MEG to test a theory.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Guru
Aug 17, 2008
10943 posts
13445 upvotes
Stopped out myself on TRP https://invst.ly/rxsie
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Addict
Sep 12, 2004
1575 posts
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Ajax
Bought CPG @ 2.35 Aug 21.
Deal Fanatic
Mar 21, 2013
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Canada
Anyone liking XOM at this point? I heard a rumour they are laying off 40% of head office staff, and they already suspended 401k matching. Doing a lot to rein in expenses in many areas.

It's at an over 50% discount and 8.5% dividend yield. Still a very fiscally responsible supermajor overall, despite a few screwups in recent years. It seems like full lockdowns are over from a demand perspective.
Deal Addict
Feb 26, 2017
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Blubbs wrote: Anyone liking XOM at this point? I heard a rumour they are laying off 40% of head office staff, and they already suspended 401k matching. Doing a lot to rein in expenses in many areas.

It's at an over 50% discount and 8.5% dividend yield. Still a very fiscally responsible supermajor overall, despite a few screwups in recent years. It seems like full lockdowns are over from a demand perspective.
I think they're eventually going to cut the dividend like the European majors oil companies did. I'm starting to believe that were in an era of an over abundance of oil. As soon as prices go up shale producers ramp up production which then keeps prices low. A different issue is you also have a lot of institutional investors pulling out the sector.

I think this article is pretty good at presenting the bear case for oil/xom.
An RBC analyst recently posted a note that highlighted the fact that XOM's cash flows do not cover its dividend. Instead, the company is essentially forced to raise debt to maintain its dividend aristocrat status. XOM bulls will argue that this is a short-term phenomenon; however, when I look at the deterioration of XOM's balance sheet over the last 5 years or so, the trend looks rather systemic to me.

Earlier in the year, I wrote an article saying that I thought XOM would be forced to cut its dividend. Thus far, that thesis hasn't proven correct. But, XOM's cash pile is dwindling and the company's long-term debt is nearing $50b. XOM's long-term debt was only $18.7b or so in 2015, meaning that the leverage on the company's balance sheet has more than doubled during the last 5 years. This debt increase comes during a period of time when net income and cash flows have been slashed as well. Eventually, this rising debt load will weigh too heavily on this well-known name.
https://seekingalpha.com/article/436969 ... retirement
Jr. Member
Jan 30, 2020
149 posts
185 upvotes
CVX is a good buy. Great balance sheet and is/can pick up assets from over extended minor players for pennies on the dollar.
Deal Fanatic
Mar 21, 2013
6097 posts
10646 upvotes
Canada
Chance7652 wrote: I think they're eventually going to cut the dividend like the European majors oil companies did. I'm starting to believe that were in an era of an over abundance of oil. As soon as prices go up shale producers ramp up production which then keeps prices low. A different issue is you also have a lot of institutional investors pulling out the sector.

I think this article is pretty good at presenting the bear case for oil/xom.



https://seekingalpha.com/article/436969 ... retirement
Yeah, I saw that thanks though. I guess the dividend sustainability will depend on the success of the huge sweeping cost cutting program they are doing. I think they need a better vision for the future but at the same time I feel like their cost cutting is going to be highly successful.
Deal Addict
Feb 26, 2017
2891 posts
4551 upvotes
Blubbs wrote: Yeah, I saw that thanks though. I guess the dividend sustainability will depend on the success of the huge sweeping cost cutting program they are doing. I think they need a better vision for the future but at the same time I feel like their cost cutting is going to be highly successful.
I'm unlikely to invest in another E&P energy company after taking losses in 2016. I'm getting more bearish on the sector but I still long with ENB with a 2x position.
Deal Guru
Aug 17, 2008
10943 posts
13445 upvotes
M&A in Cdn O&G Face Screaming In Fear
WCP up and MFC down, although financials are down in general.

Canadian oil producer Whitecap to buy NAL Resources for nearly $119 million
https://www.reuters.com/article/us-nal- ... SKBN25R1NB

"Whitecap said it would issue 58.3 million of its shares to Manulife in exchange for all the issued and outstanding shares of NAL, which operates in Canada’s Saskatchewan and Alberta.

Insurance and financial services provider Manulife will own about 12.5% of the combined company."

Update #1

Saw this first, but didn't give it much thought.

Obsidian Energy proposes merger with Bonterra Energy in share-swap deal

https://www.theglobeandmail.com/busines ... hare-swap/

Update #2

Endangered species: Canadian small oil and gas companies under pressure to merge or die
Sep 04, 2020

https://financialpost.com/commodities/e ... db9385636/
Last edited by MrMom on Sep 5th, 2020 12:33 am, edited 1 time in total.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Member
Nov 25, 2009
305 posts
290 upvotes
Toronto
Keeping an eye on Suncor. Might pick up couple hundred shares if the slide continues. Would like to see it touch oversold levels - was oversold on the intraday.
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Jun 1, 2006
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Anyone know Enbridge drop so much today? Like almost a dollar and 2 dollars since last week.
Have a nice day!


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