Thu, Apr. 7, 5:46 PM
- Spending in Canada’s oil and natural gas sector has fallen by a record C$50B (US$38B) over the past two years, a 62% drop that marks the biggest two-year decline since 1947 when data was first collected, according to the Canadian Association of Petroleum Producers.
- The group predicts total capital investment in the oil and natural gas sector will fall to C$31B in 2016, down from C$48B in 2015 and a record C$81B in 2014.
- CAPP also forecasts that the total number of wells drilled in Canada’s western provinces, home to the world's third largest oil reserves, will fall to 3,500 in 2016 from 10,400 drilled in 2014 and that capital spending there will drop to $17B this year, about half of 2014 levels.
- Relevant tickers: SU, CVE, IMO, XOM, RDS.A, RDS.B, CNQ, ENB, TRP, PDS, OTCPK:HUSKF, OTCQX:COSWF, OTCPK:MEGEF
- Now read Canada's biggest oil producers sitting on near-record cash pile
Tue, Mar. 22, 11:31 AM
- Suncor (SU +0.3%) is reinitiated with a Neutral rating and C$34 price target by J.P. Morgan's Phil Gresh as it integrates Canadian Oil Sands (OTCQX:COSWF) into the company after minority shareholders voted in favor of the takeover.
- "Through its capital allocation approach, SU has clearly demonstrated its longer term positive view on oil markets, having been one of the more aggressive companies... on both M&A and organic growth capital, at a time when others have significantly pared back,” Gresh writes.
- SU has maintained the highest production compound annual growth rate among its peers for 2014-18 at 4.5%, while also being able to leverage its “relatively normalized” 2018 balance sheet, driven by higher debt and potentially lower downstream benefit, according to the analyst.
- COSWF will be delisted from the Toronto stock exchange tomorrow following Monday's shareholder vote.
Fri, Feb. 12, 6:18 PM
- Canadian Oil Sands' (OTCQX:COSWF) credit rating is downgraded by three notches to junk at Moody's, making it the first large Canadian oil producer to receive a junk rating in at least a decade.
- Moody's cites COSWF's very high cost base and the expectation of very high leverage and weak interest coverage in 2016 and 2017 amid continuing weak oil prices in dropping its debt rating to Ba3, down from the lowest level of investment-grade credit of Baa3.
- Moody's says COSWF's new status as an affiliate of Suncor (NYSE:SU) kept its credit two notches higher than its stand-alone assessment of the company, but the junk rating reflects SU’s decision not to guarantee ~$1.5B in outstanding debt.
- The ratings firm also cuts SU by one notch to Baa1 from A3; the ratings outlook for both companies is stable.
Mon, Feb. 8, 2:43 PM
- Canadian Oil Sands (OTCQX:COSWF -1.2%), preparing to be taken over by Suncor Energy (SU -1.6%), is overhauling its senior leadership team and board of directors.
- In as the new CEO is Sandy Martin, SU's VP of strategy and commercial development; out are Ryan Kubik, who was CEO during the takeover fight, and Donald Lowry, who was chairman during the period.
- New Chairman Harry Roberts was a senior VP at SU before his retirement in 2010, and the four other directors also are connected to the acquirer.
Mon, Feb. 8, 10:15 AM
- Suncor Energy (SU -3.4%) says nearly 73% of Canadian Oil Sands (OTCQX:COSWF -3.5%) shares and accompanying rights have been tendered to its C$4.2B takeover offer.
- SU says that as a result, it will be able to ensure that the deal will be completed and it will acquire the remainder of the outstanding COS shares.
- SU succeeded in winning over resistant COS management and shareholders after sweetening its offer last month.
Thu, Feb. 4, 8:49 AM
- Suncor (NYSE:SU) -1.2% premarket after posting a Q4 loss of C$0.02/share, well below the consensus forecast for an operating profit of ~C$0.13/share and the C$0.27 it earned in the same quarter last year.
- SU says it is cutting its FY 2016 spending plans to C$6B-C$6.5B, down from C$6.7B-C$7.3B budget projected in November, due in part to deferring planned maintenance at its Firebag oil sands project in Alberta to 2017 from this year.
- Despite the reduced spending plans, SU maintains its 2016 production forecast for 525K-565K boe/day; the company's 2015 output totaled 577.8K boe/day.
- Total Q4 upstream production rose to 582.9K boe/day, vs. 557.6K boe/day in the prior-year quarter; Q4 oil sands output rose to 439.7K bbl/day, vs. 384.2K bbl/day a year ago.
- SU says the average price realized from its oil sands operations fell to C$41.55/bbl in Q4, down from C$69.51/bbl in the year-ago period and C$47.93 in Q3 2015; oil sands cash operating costs fell to C$28/bbl, down from C$34.45 a year ago.
- SU’s share of production from the Syncrude oil sands consortium fell to 30.9K bbl/day, down from 35.1K bbl/day in Q4 2014, due to unplanned maintenance, a problem that has dogged Syncrude in recent years; the Canadian Oil Sands (OTCQX:COSWF) acquisition, pending shareholder approval, would increase SU’s stake in Syncrude to 49% from 12% currently.
Mon, Feb. 1, 3:15 PM
- Alberta's government says it will provide up to C$500M (US$357M) in subsidies to support new petrochemical plants, part of a plan to help diversify the province’s economy by creating higher value products from its resources.
- The subsidies are designed to attract two or three new petrochemical projects, each of which would be eligible for up to C$200M in credits for purchasing ethane or propane; the credits would be provided only once a facility is built and starts operating to reduce the financial risk to the province.
- The program follows Alberta’s review of oil and gas royalty charges, which was unveiled Friday and said there was an opportunity to encourage more petrochemical processing in the province.
- Relevant tickers: SU, CVE, OTCPK:HUSKF, OTCQX:COSWF, RDS.A, RDS.B, IMO, XOM, CNQ, ENB, TRP, PDS, OTCPK:MEGEF
Fri, Jan. 29, 2:15 PM
- Alberta's new government unveils its new oil and gas royalty framework that left rates unchanged on existing oil wells and oil sands projects, easing fears that it could lead to higher costs and job losses at a time when Canada's energy heartland is already staggering from collapsing oil prices.
- The highly anticipated royalty review keeps the current commodity price-based system, but will levy rates once the cost of a well has been recouped based on industry averages for drilling costs in Alberta, will apply only to new wells from 2017 onward; existing royalty rates will remain in place for 10 years on wells drilled before 2017.
- Relevant tickers: SU, CVE, OTCPK:HUSKF, OTCQX:COSWF, RDS.A, RDS.B, IMO, XOM, CNQ, ENB, TRP, PDS, OTCPK:MEGEF
Tue, Jan. 19, 6:28 PM
- Suncor’s (NYSE:SU) expected takeover of Canadian Oil Sands (OTCQX:COSWF), which would boost its stake in the Syncrude Canada oil sands venture to 49% from its current 12%, is a "potentially positive” step that could improve output and productivity, says Brian Tuffs, head of Sinopec’s (NYSE:SNP) Canadian operations.
- SNP is the fourth-largest owner of Syncrude, with a 9% stake, and has invested C$10B in Canada, including the Syncrude stake, and Tufts says the company sees its Canadian assets as “core” to its long-term strategy.
- SU CEO Steve Williams has said the company would devote more resources to boosting Syncrude’s output.
Mon, Jan. 18, 8:29 AM
- Suncor Energy (NYSE:SU) and Canadian Oil Sands (OTCQX:COSWF) have reached a friendly deal after the former agreed to raise its takeover offer to about C$4.24B ($2.92B).
- The new all-stock transaction, which boosts the overall bid value from about C$3.78B, consists of 0.28 of a Suncor share for each Canadian Oil Sands share, up from 0.25 of a share previously.
- The revised offer, which will remain open until Feb. 5, is also subject to at least 51% of Canadian Oil Sands' shares being tendered and includes a C$130M breakup fee.
- Previously: Suncor, Canadian Oil Sands in talks for friendly takeover (Jan. 18 2016)
Mon, Jan. 18, 4:07 AM
- Suncor Energy (NYSE:SU) is working on a friendly transaction to raise its all-stock offer for rival Canadian Oil Sands (OTCQX:COSWF), and an announcement about the deal could come as early as today, WSJ reports.
- The two companies have been working on a revised bid since Friday, sources said, but the value of the potential revised transaction couldn't be learned.
- Suncor's existing offer of 0.25 of a share for each share of Canadian Oil Sands is currently worth about C$3.78B ($2.59B).
Mon, Jan. 11, 8:39 AM
- Canadian Oil Sands (OTCQX:COSWF) calls on Suncor Energy (NYSE:SU) to disclose details of how shareholders voted in SU's hostile takeover offer for the company before the January 8 deadline was extended to January 27.
- COSWF says it believes SU is obligated to disclose material facts on its bid, including the actual tender results, and that a disclosure is required under Canadian and U.S. securities law in this situation.
- SU on Friday did not disclose the number of shares tendered to the offer, or provide a reason for the extension of the deadline.
Fri, Jan. 8, 10:37 PM
- Suncor Energy (NYSE:SU) extends its hostile takeover offer for Canadian Oil Sands (OTCQX:COSWF) to January 27 after failing to win the two-thirds support it was seeking from shareholders.
- "Since nothing about this bid has changed other than the date, we remain steadfast in our conclusion that there is more value for shareholders in a strong, independent Canadian Oil Sands,” chairman Donald Lowry says.
- COS shares closed today at $7.47 in Toronto, ~10% below the value of the bid based on SU’s closing share price, suggesting the bid likely would be unsuccessful.
Fri, Jan. 8, 10:49 AM
- Suncor Energy (SU +0.7%) likely would weigh its options over the weekend if it fails to convince enough Canadian Oil Sands (OTCQX:COSWF -3.4%) shareholders to accept its C$4.3B takeover offer which is set to expire tonight, Financial Post reports.
- SU must secure 50% of independent shareholders, which would blunt COSWF’s poison pill; the company then could extend the offer and squeeze out minority shareholders by calling a meeting, and Toronto-based lawyer Paul Davis of McMillan LLP believes CEO Steve Williams’ comments suggest SU would extend its offer if Williams feels the deal is close.
- COSWF shares have been volatile over the past few days and now trade made than $1 lower than SU's offer of C$8.82; “I would take from that people expect it [Suncor’s bid] would fail,” says Bill Gula, M&A lawyer at Hansell LLP in Toronto.
Thu, Jan. 7, 12:49 PM
- Suncor Energy’s (SU -2.1%) $4.3B takeover of Canadian Oil Sands (OTCQX:COSWF +1.3%) looks far from certain, with the target’s share price trading at a record gap to the bid just a day before expiring.
- COSWF closed yesterday at $7.47 in Toronto, putting SU’s $8.52/share offer at a record 14.1% premium since the deal was announced on Oct. 5.
- The market "seems to be pricing in a reasonably high probability it doesn’t happen, [which] reflects the fact that the market is concerned about the downside risk here if it doesn’t go ahead,” BMO Capital's Randy Ollenberger says.
- Shareholders against the deal, including Seymour Schulich, have been vocal in their opposition in claiming SU is making a low-ball offer, heightening speculation about how many shareholders agree with them.
- Others say SU ultimately will prevail, including Samara Fund president Ben Cubitt, who says “if this bid goes away, it trades probably at $5... These guys, I assume, have canvassed the world for someone willing to pay something more and haven’t found anyone. So it is impossible to argue that at this moment in time it is worth more.”
Tue, Jan. 5, 2:26 PM
- Suncor Energy (SU -0.1%) CEO Steve Williams says his company is “slightly ahead" of the tender numbers needed to secure its C$4.3B bid for Canadian Oil Sands (OTCQX:COSWF +1.6%).
- "We’ve been seeing some of the bigger shareholders this week again, and we’re getting a very clear message that there is no support for an independent Canadian Oil Sands,” according to Williams.
- Continuing the sniping between the two sides, Williams says "all Canadian Oil Sands is offering is hope for a price recovery that the market doesn’t see coming anytime soon and operational improvements at Syncrude which there unfortunately is simply no evidence."
- Major COSWF shareholder Seymour Schulich says he is not selling at the current offer price, and that 28% of shareholders are against the deal; Williams is "quite confident" that there is no such substantial figure aligned with Schulich.
- Earlier: Suncor not ruling out raising bid for Canadian Oil Sands, CEO says (Jan. 4)
Canadian Oil Sands is a pure investment opportunity in light, sweet crude oil. Through our 36.74% interest in the Syncrude project, we offer a solid, robust production stream of fully upgraded crude oil, exposure to future crude oil prices, potential growth through high-quality oil sands leases... More
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