Fri, Nov. 27, 1:48 PM
- The increasingly bitter fight over Canadian Oil Sands' (OTCQX:COSWF) potential to attract bids to rival Suncor Energy’s (NYSE:SU) $4.3B hostile takeover offer led to tense exchanges at yesterday's Alberta Securities Commission hearing.
- A representative with J.P. Morgan, SU's advisor and supporting the company’s position that COSWF should not be allowed to change its shareholder rights plan in an attempt to fight off the takeover offer, said no one was likely to make a competing bid for COSWF.
- The rep said the possibility that Imperial Oil and its parent company Exxon Mobil, long rumored as suitors, was remote since neither had made an offer to date, even though either could do so quickly given IMO's ownership of 25% of Syncrude.
- The Canadian Oil Sands rep RBC, however, said 25 interested parties were reviewing the "opportunity," with four signing confidentiality agreements and "a good prospect" for at least one proposal.
- The Commission is expected to issue its decision on the COSWF shareholder rights plan before SU’s Dec. 4 deadline; if it rules in favor of COSWF, then shareholders would have until early April to make a decision if the SU bid is not withdrawn before then.
Tue, Nov. 24, 12:49 PM
- Canadian oil producers may say they are on board with Alberta’s new climate change policy goals, but the requirement that companies reduce their methane emissions by 45% will add costs "in the tens or hundreds of millions of dollars over the next five years," the Canadian Association of Petroleum Producers says.
- Alberta’s oil and gas sector produced 30.4 megatons of methane emissions in 2013, accounting for 70% of the province’s overall methane emissions.
- National Bank Financial analyst Kyle Preston calls Alberta’s climate change policy “fair and accommodating” for oil and gas companies, and says newer energy projects such as Canadian Natural Resources' (NYSE:CNQ) Horizon oil sands project and MEG Energy’s (OTCPK:MEGEF) Christina Lake facility emit less greenhouse gas than older facilities, which will be hit harder by the new policies.
- Other related tickers: TRP, ENB, IMO, XOM, RDS.A, RDS.B, OTCQX:COSWF, OTCPK:HUSKF, CVE
Mon, Nov. 23, 8:19 AM
- Alberta's government announces plans to cap oil sands emissions for producers, phase out coal power plants and implement a carbon tax in an effort to curb pollution.
- The provincial government in impose a limit of 100 megatons/year of carbon emissions, above current annual emissions of ~70 megatons, phase out coal power plants by 2030, and set a carbon price of C$20/metric ton (US$15) by 2017 which rises to C$30 in 2018.
- The Canadian Association of Petroleum Producers supports the initiative, saying it could help improve Alberta’s image in markets to which oil sands producers hope to expand access.
- "This will create a wealth of opportunities and jobs for generations to come. We in Alberta want to take a leadership role on climate," says Suncor (NYSE:SU) CEO Steve Williams.
- Coal producers criticized the new policy, however, saying it will raise electricity costs in Alberta and cost Canadian jobs.
- Other relevant tickers: TRP, ENB, IMO, XOM, RDS.A, RDS.B, OTCQX:COSWF, OTCPK:HUSKF, CVE, CNQ
Thu, Nov. 12, 10:54 AM
- Suncor Energy (SU -0.6%) sends a letter to Canadian Oil Sands (OTCQX:COSWF -0.6%) shareholders urging them to disregard their board of directors and accept its hostile C$4.7B ($3.5B) takeover offer.
- SU says COSWF shareholders should accept its offer, given the later's "track record of underperformance, financial challenges and significant vulnerability in a 'lower for longer' oil price market."
- SU says the potential premium of its offer has increased to 57% from 43% compared with the pre-offer trading price of $6.19 because of the substantial increase in the price of SU shares, which closed at $38.97 on the TSX on Nov. 9 from a pre-offer closing price of $35.37 on Oct. 2.
Fri, Nov. 6, 7:57 AM
- Suncor Energy (NYSE:SU) says its effort to get the poison pill adopted by Canadian Oil Sands (OTCQX:COSWF) thrown out will be heard on Nov. 26 by Alberta’s securities regulator, following SU's application for an order to stop the new shareholder rights plan.
- SU launched its hostile takeover bid for COSWF in early October, prompting the target company’s board to implement the rights plan that requires bids to be open for 120 days; SU’s bid expires Dec. 4, and it calls the move by COSWF a stalling tactic and wants the Alberta Securities Commission to strike it down.
- COSWF calls SU's move a "smokescreen" intended to obscure a weak offer and says it will oppose the application.
Thu, Oct. 29, 6:25 PM
- Canadian Oil Sands (OTCQX:COSWF) reiterates its rejection of Suncor Energy's (NYSE:SU) hostile takeover offer, and says it is considering alternatives including a potential sale of the company or a merger or partnership with a strategic or financial partner.
- In its Q3 earnings, COSWF says cash flow from operations fell 73% Y/Y to C$82M, or C$0.17/share, from C$302M, or C$0.62/share, a year ago, partly due to a 41% drop in realized selling prices for synthetic crude oil from Syncrude to C$60.20/bbl from C$102.58/bbl.
- The company cuts its full-year cash flow from operations forecast to C$340M from a July estimate of C$474M, as it expects continued low crude oil prices.
- COSWF says its overall Q3 total sales volumes fell partly because of an August fire at Syncrude’s main oil sands plant, which reduced output by 7M barrels Q/Q to 86,687 bbl/day and by 2.6M barrels Q/Q net to the company.
- COSWF holds the largest stake in the Syncrude oil sands project, while joint venture partner SU owns 12%.
Wed, Oct. 28, 10:22 PM
- Suncor Energy (NYSE:SU) is the first major Canadian energy producer to post Q3 earnings, and its weak results are expected to be replicated by the others when they report later this week.
- SU's unadjusted Q3 loss totaled C$376M, including a C$786M unrealized foreign exchange loss on the revaluation of U.S. dollar-denominated debt; a year ago, the company recorded a C$919M profit.
- Cash flow from operations fell to C$1.88B from C$2.28B a year ago, which the company said reflected “the lower upstream crude oil price environment.”
- SU says overall Q3 production rose to 566.1K boe/day from 519.3K boe/day a year ago, primarily the result of increased production in the U.K.; oil sands output rose to 430.3K bbl/day from 411.7K bbl/day a year ago.
- SU's average Q3 sales prices for its oil sands output was C$47.93/bbl, down from $60.81 in Q2 and $89.38 in Q3 2014.
- SU maintains its full-year production forecast of 550K-595K boe/day and keeps its full-year capex outlook unchanged at C$5.8B-C$6.4B, although its original spending target was C$7.8B; the dividend is maintained at $0.29/share.
- The company touts its oil sands performance in support of its hostile bid for Canadian Oil Sands (OTCQX:COSWF), saying it has managed to run its upgrading operations that process bitumen into light crude at more than 90% of capacity this year, compared with an average 70% for Syncrude.
Tue, Oct. 27, 7:37 PM
- Energy-dependent Alberta today unveiled its 2015 budget, the first under the new NDP government, projecting a record deficit on falling revenue linked to the sharp slump in crude oil prices.
- It's a spend and borrow budget that will see the province borrowing for operating for the first time in two decades, promising to spend an additional C$4.5B above previous commitments over the next five years for infrastructure such as new transportation projects and hospitals.
- As for the oil sector, which is pleading for a three-year lag before royalties are changed, Finance Minister Ceci indicated no letup from the NDP's promise of royalty increases and tougher climate change regulations once reviews now underway are completed over the next few months.
- Relevant tickers: SU, ENB, TRP, KMI, IMO, CVE, CNQ, OTCPK:HUSKF, OTCQX:COSWF.
Wed, Oct. 21, 2:38 PM
- Analysts now expect Suncor Energy (SU -1.2%) to increase its hostile takeover bid for Canadian Oil Sands (OTCQX:COSWF -1.9%), with several increasing their price target for COSWF shares to reflect a higher value than the $8.65/share SU offered when it took its deal directly to shareholders on Oct. 5.
- FirstEnergy Capital analyst Michael Dunn says SU "very likely" would extend a higher bid, raising his price target on COSWF to $11.85, roughly the price SU had offered privately in the spring.
- Dunn thinks Syncrude’s Lease 29 is more valuable to SU than it is saying, but that is not critical to SU’s future.
- Barclays raised its price target on COSWF to $10 following the target company's rejection.
Mon, Oct. 19, 3:45 PM
- Canadian Oil Sands (OTCQX:COSWF -2.7%) expects strong interest from other suitors following its rejection of Suncor Energy's (SU -2.6%) hostile takeover bid, CEO Ryan Kubik tells Reuters.
- "There's interest from a broad range of buyers... whether it be private equity, whether it be pension funds, or international oil companies," Kubik says while adding that COSWF has not yet been approached with any other offers.
- The CEO tells Bloomberg that several groups would have an interest in COSWF because the company has managed to cut costs and sustain cash flows even with U.S. oil at less than $50/bbl.
Mon, Oct. 19, 7:58 AM
- Canadian Oil Sands' (OTCQX:COSWF) board recommends shareholders reject Suncor Energy's (NYSE:SU) proposed C$4.3B takeover offer, which it calls "opportunistic and exploitive" and undervalues the company.
- COSWF says the price underestimates the value of the companies’ combined stakes in the Syncrude partnership and does not reflect a premium to potentially acquire operational control through the deal, and says SU is aware of several yet-to-be-disclosed cost-reduction and value-enhancing initiatives at Syncrude that are not reflected in the bid.
- COSWF also revises its FY 2015 guidance, now estimating a production range for Syncrude of 92M-97M barrels and raising its 2015 estimate for cost savings at Syncrude to $1.3B ($480M net to COSWF) from $900M ($330M net), having exceeded the previously estimated $900M in savings during the first nine months of 2015, and has identified further opportunities to reduce costs.
Thu, Oct. 15, 11:58 AM
- Suncor Energy’s (SU -1.1%) offer to buy Canadian Oil Sands (OTCQX:COSWF -2%) is "ill advised" because of low oil prices and the potential for further share price declines, Venator Capital's Brandon Osten tells Bloomberg.
- Any purchase of Canadian Oil Sands needs $70/bbl oil, Osten says; his hedge fund has shorted SU since Q1.
- Osten expects Exxon Mobil affiliate Imperial Oil - Syncrude’s second largest owner behind COSWF - to make a counter-offer with either cash or shares, but "either way, I think Canadian Oil Sands gets taken over in the next six months.”
Wed, Oct. 7, 5:56 PM
- Suncor Energy (NYSE:SU) criticizes the move by Canadian Oil Sands' (OTCQX:COSWF) board to adopt a poison pill defense two days after receiving SU's unsolicited takeover offer, predicting the effort to block a deal would fail based on the price premium offered to COSWF shareholders.
- Before SU’s offer, the COSWF stock price had fallen 41% YTD, a reflection of its struggle with lower oil prices, production problems at Syncrude and a surging debt load.
- On a conference call, SU CEO Steve Williams said his company made a few overtures to its target in the spring, but was rebuffed.
- SU says its offer will stay open until Dec. 4, although it could be withdrawn or the deadline could be extended.
Wed, Oct. 7, 10:26 AM
- Canadian Oil Sands (OTCQX:COSWF +1.4%) adopts a poison pill takeover defense calling for 120 days to consider offers, two days after Suncor Energy (SU +2.7%) launched a hostile bid for the company.
- The rights plan, which is in addition to one already in place, would be triggered upon the purchase of 20% or more of the company’s shares outstanding by any person.
- COSWF says the shareholder rights plan is meant to give its shareholders and board adequate time to evaluate SU’s C$4.3B ($3.3B) all-stock offer and any other unsolicited bid or strategic options.
- SU expected its bid to be rejected initially and would work to win over shareholders in several meetings, CEO Steve Williams told Bloomberg yesterday.
Mon, Oct. 5, 7:45 PM
- Suncor Energy's (NYSE:SU) C$4.3B hostile takeover bid for Canadian Oil Sands (OTCQX:COSWF) is "not a low-ball offer, it’s a no-ball offer,” according to billionaire Seymour Schulich, who owns 25M shares, or 5%, of the company and says he is not selling at the offer price.
- Schulich says SU's proposal is worth less than half the replacement value of the Syncrude Canada joint venture, of which COSWF owns 37%, and that Imperial Oil (NYSEMKT:IMO) recently built the Kearl oil sands project at a cost of $13B, which produces lower-grade oil than the Syncrude project.
- Analysts are split on whether the deal was a good one for COSWF shareholders; National Bank Financial's Kyle Preston calls the bid “a positive deal" and raises the possibility that IMO, along with parent company Exxon Mobil (NYSE:XOM), could launch a competing bid, but Barclays’ Paul Cheng, among others, does not believe IMO will make a bid.
- Earlier: Reuters: Canadian Oil Sands to reject Suncor bid, unlikely to engage
Mon, Oct. 5, 3:58 PM
- Canadian Oil Sands (OTCQX:COSWF +55%) is prepared to reject the hostile takeover bid made by Suncor Energy (SU -1.6%) and is unlikely to engage with SU on the basis of the current proposal, Reuters reports.
- Earlier this afternoon, COSWF said it was reviewing the offer and asked shareholders to wait until it has time to respond.
- SU earlier today shook up Canada's oil industry by forwarding an all-stock offer for COSWF, which owns a large stake in Canada's Syncrude project in Alberta.
- "Maybe Suncor comes back with a small sweetener, to maybe save some face and make it look a little bit better, but I don't know if they even need to do that," says 3Macs energy analyst Robert Mark, adding that "my guess is that this deal gets done at the current price."
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