Buffett's Suncor stake may be "turning point" for oil sands stocks

Warren Buffett’s new 17.7M-share stake in Suncor (SU +1.7%) could spark investor interest in the battered stocks of Canadian oil sands companies, analysts say.

Canadian Natural Resources (CNQ), Cenovus Energy (CVE) and Imperial Oil (IMO) - with "scale and access to market and cost discipline" - may get a second look from investors as Wall Street reviews oil and gas plays beyond prolific shale plays in their own backyard.

SU produced a record 390K bbl/day in July, and its "new normal" would see output shoot up to 420K, First Energy Capital says.

SU is trading at some of the lowest cash flow multiples and, at 80 years, has one of the longest reserve lives in its peer group.

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Comments (9)
  • bakermre
    , contributor
    Comments (378) | Send Message
    How does this square with Buffett's many (Democratic Left) friends' opposition to the Keystone XL pipeline to carry more Canadian Oil Sands crude south into the USA? Sounds like they prefer his 20 times more dangerous trains, rather than safe pipelines, to carry the crude south.
    Lac Megantic was on a CP Rail route eastwards, so does CP get a pass too? Seems like now the crude origin is no problem, just the transport medium. What a crazy, upside down Pseudo-Green World the David Suzuki & Al Gore followers, and their cohort, have created. How much funding slips in, unheralded, from such liberal bastions of democracy and free speech as Saudi Arabia? Gifts to carry on funding the XL resistance army? Madness, I say, to believe these "benefactors".
    16 Aug 2013, 01:46 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (1696) | Send Message
    Actually, think it's the other way around. Pipelines have a worse long term track record than the trains.
    16 Aug 2013, 02:02 PM Reply Like
  • jjmc2001
    , contributor
    Comments (1357) | Send Message
    Please cite your source for that. I am not arguing I just cannot find data to support that argument.
    16 Aug 2013, 04:06 PM Reply Like
  • Guest1234
    , contributor
    Comments (85) | Send Message
    I mean, if you consider militants blowing up pipelines (in other regions of the world) then maybe you are correct
    17 Aug 2013, 09:46 AM Reply Like
  • rjj1960
    , contributor
    Comments (1471) | Send Message
    What the Canadian oil sands companies represent to the U.S in the form of STABLE reserves is an asset to the country. The powers that be in Washington think they are a liability.
    16 Aug 2013, 02:08 PM Reply Like
  • Energex
    , contributor
    Comments (951) | Send Message
    Lac Megantic disaster exceeded BPs gulf accident in terms of lives lost. A major railroad would face billions in damages and clean up cost. Rail companies including Buffet's are not immune to major accidents transporting oil at such high growth rate as seen in the last 2-3 years. Buffet probably understands that.
    He has bought SU... then may sell the railroad company... then lobby Obama to approve the K-XL. He is going to make money one way or another.
    16 Aug 2013, 02:16 PM Reply Like
  • RayofLight
    , contributor
    Comments (30) | Send Message
    I believe Suncor can refine it's own oil. If the XL Pipeline is cancelled, I would think Suncor's share prices would go up, as oppose to Canadian Oil Sands , which does require the pipeline to take it's product to the refineries in the south. I am a Canadian, and have been watching Obama's dithering on XL for the past three years. I think it is short sighted of him not to lock in a long term energy security plan for North America. I don't believe he will pass it. I am long Suncor, CNR and Trinity Industries (TRN)
    17 Aug 2013, 02:28 AM Reply Like
  • RayofLight
    , contributor
    Comments (30) | Send Message
    I believe Suncor does the refining also, so it doesn't need the XL Pipeline. Suncor share prices will most likely go up with a cancelled XL , unlike Canadian Oil Sands that needs to ship to a refiner that can handle the thick crude. As a Canadian, I am amazed by Obama's short term thinking. I am long Suncor,CNR and Trinity Industries.
    17 Aug 2013, 04:06 AM Reply Like
  • Guest1234
    , contributor
    Comments (85) | Send Message
    Buffett is a fake liberal, he has no moral qualms against "dirty oil" or oil sands and as mentioned above probably wants the trans xl pipeline banned just so he can profit from his railroad shipping market position (even though shipping crude by pipe is cheaper and safer)
    17 Aug 2013, 09:43 AM Reply Like
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