By Andrew Willis
There’s a deafening silence surrounding ConocoPhillips (COP) as the U.S. oil company fields offers for its stake in the Syncrude oil sands property.
Since the U.S. oil company put the holding on the block in late October, there’s been no news on who is bidding, but all sorts of speculation. Most fingers point to Canadian Oil Sands Trust (COSWF.PK) as the likely buyer, and as time passes, analysts are getting increasing comfortable with what’s likely to be a $4 billion acquisition.
“We continue to believe that the sale of ConocoPhillips' 9% interest in Syncrude is Canadian Oil Sand’s to lose,” said a report Thursday from RBC Dominion Securities energy analyst Greg Pardy.
“As much as bigger is not always better, the transaction could make logical sense on two fronts. First, it would enable Canadian Oil Sands to buy oil sands assets headed into what we believe will be a continuation of a bull market for crude oil as demand recovers,” said Mr. Pardy. “Second, Canadian Oil Sands could be picking up additional interest in Syncrude before the operational improvements have fully surfaced.”
Mr. Pardy has a ‘sector perform rating on Canadian Oil Sands, and a $35 target price on its units.
