Petro-Canada Announces New Oil Sands Breakeven: $50 a Barrel 3 comments
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Specifically, Fort Hills apparently would earn an 8.2% annual return on owner’s investment at a light, sweet crude oil price of US$53 a barrel, after we adjust to take account of today’s value of the Canadian dollar. In contrast, the current quote of US$72 a barrel for the next six years implies either a higher return on investment or a higher present value of a third more than full capital cost of C$134,000 a daily barrel.
Taking account of the risk in achieving construction success, we suggest a half weighting in PCZ stock in the illustrative McDep Energy Portfolio. Noting that the stock market prices a fully completed plant, Syncrude, at a low C$122,000 a daily barrel, we suggest a double weighting in the stock of buy-recommended Canadian Oil Sands Trust (COSWF), a pure play on Syncrude.
PCZ vs. COSWF 6-mo chart:

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The operators know this because they talk about nukes to deliver the heat needed. If nukes are ever needed the tar sands operations will die.