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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.
Tue, Oct. 20, 2:30 PM
- Canada's oil patch may have lost a major energy opportunity with the defeat of the Conservative government, but Canadian energy stocks are mostly higher despite the surprise mandate won by Justin Trudeau's Liberals that promises less favorable energy policies and increased environmental stewardship.
- The Liberal majority at least removes the uncertainty of a widely speculated minority government and gives the changing industry political stability in Ottawa, the president of the Canadian Association of Petroleum Producers says.
- Energy proponents in Alberta may be relieved that last May’s provincial NDP victory did not translate into a federal win by Tom Mulcair’s NDP, which would have brought far tougher anti-oil policies that the winning Liberals.
- Trudeau is opposed to Enbridge's (ENB +1.1%) Northern Gateway pipeline, but has expressed qualified support for TransCanada's (TRP +1.4%)Keystone XL and Energy East and Kinder Morgan’s (KMI +0.5%) TransMountain projects, though he would also bring in tougher environmental review processes and a national plan to tackle greenhouse gases.
- Some say an Obama administration veto for Keystone XL would make the job easier for the new Prime Minister in an effort to reset a relationship with the U.S. he says was damaged by the outgoing Stephen Harper.
- Also: SU +1.3%, IMO +1.1%, CVE +1.1%, CNQ +3%, OTCPK:HUSKF +0.6%, CNI +1.9%, CP +3.8%.
- Earlier: Canadian energy stocks to turn red if Harper fails to win upcoming election (Oct. 14)
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, 6:45 PM
- Canadian National Railway (NYSE:CNI) and Canadian Pacific Railway (NYSE:CP) are cutting rates for shipping crude oil by as much as 25%, shippers and terminal operators tell Reuters, as the railroads struggle to compete with pipelines for a share of shrinking crude shipments across Canada, where an anticipated boom in oil sands traffic has fizzled with lower oil prices.
- Shipments from Canada to the U.S. have plunged by more than a third this year to 112K bbl/day in July, thwarting industry forecasts made before the oil price crash that total Canadian crude by rail volumes could hit 700K bbl/day by year-end 2016.
- Canadian oil sands producers that ship their crude by rail include Cenovus Energy (NYSE:CVE) and Suncor Energy (NYSE:SU).
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. 14, 7:37 PM
- Canadian energy companies grow increasingly nervous as Canada’s Liberal Party appears to be moving ahead of the incumbent Conservative government in the final days of a tight race ahead of Monday’s national election.
- "A non-Conservative federal government would likely be viewed in a negative light given the NDP and Liberal parties’ policies on environmental legislation, regulatory oversight and export pipelines,” Canaccord analysts write.
- Among potential winners and losers, analysts say stricter emissions rules favored by the Liberals and NDP could hurt shares of companies such as Suncor (NYSE:SU) and Imperial Oil (NYSEMKT:IMO), while those that produce greener energy and could sell credits or avoid new taxes may benefit, such as Brookfield Renewable Energy Partners (NYSE:BEP).
- Harper is the only candidate to favor all four pending major pipelines - TransCanada’s (NYSE:TRP) Keystone XL and Energy East, Enbridge’s (NYSE:ENB) Northern Gateway and Kinder Morgan’s (NYSE:KMI) Trans Mountain - and further delays could hit share prices.
- But more delays likely would mean higher crude-by-rail shipments, a potential benefit to Canadian National Railway (NYSE:CNI) and Canadian Pacific Railway (NYSE:CP).
Mon, Oct. 12, 3:45 PM
- Barclays maintains a Neutral rating on the group of 10 Americas-based oil majors, expecting the group to miss consensus expectations in the light of lower crude oil and gas prices, while it reduces the ratings and price targets of several of the companies.
- Although the refining companies have benefited from a modest widening of the key North American crude differentials and stronger product cracks, the firm says higher operating costs and lower than expected margin capture rate at several refiners due to unplanned outages have partially offset these benefits.
- Barclays downgrades Petrobras (PBR -3.7%) to Equal Weight from Overweight, as the company’s unsustainable levels of debt, cash flow outlook and concerns surrounding the corruption investigation cannot be ignored even as shares appear attractively valued; Imperial Oil (IMO -2.1%) also is cut to Equal Weight from Overweight.
- The firm maintains Suncor Energy (SU -0.5%) and Husky Energy (OTCPK:HUSKF -1.9%) at Overweight, saying the two stocks offer the best value over the next 12 months on a risk-adjusted basis, while maintaining Chevron (CVX -0.9%), Hess (HES -2.8%) and Murphy Oil (MUR -3.2%) with Equal weight ratings; it cuts price targets slightly for all five companies.
- Earlier: Exxon upgraded to Equal Weight at Barclays
Mon, Oct. 12, 7:52 AM
- Exxon Mobil (NYSE:XOM) is upgraded to Equal Weight from Underweight with a $85 price target, raised from $80, at Barclays, citing the company's relative dividend yield.
- However, the firm says it still prefers ConocoPhillips (NYSE:COP) and Suncor (NYSE:SU) over XOM among oil majors.
- XOM +0.8% premarket.
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."
Mon, Oct. 5, 7:28 AM
- Suncor Energy (NYSE:SU) says it has offered to acquire all outstanding shares of Canadian Oil Sands (OTCQX:COSWF) for ~C$4.3B ($3.3B), a 43% premium over Friday's closing price.
- Including the company’s estimated outstanding net debt of C$2.3B as of June 30, the total transaction value would be ~C$6.6B.
- The offer for CPSWF, which owns 37% of the Syncrude oil sands consortium, comes as the company struggles with a slumping stock price due partly to low crude prices.
- For SU, the deal would give it a growing presence in the Canadian oil sands after recently boosting its stake in the Fort Hills oil sands project in Alberta to just over 50% by buying a 10% stake from project partner Total.
- SU -1.6% premarket.
Thu, Oct. 1, 3:58 PM
- Canadian light synthetic crude and North Dakota Bakken crude for November delivery are rising sharply after Enbridge (ENB +0.4%) gained approval from regulators late yesterday to open its Line 9 crude pipeline.
- ENB has not said when the 300K bbl/day pipeline will start operating but traders say there is demand for light crude in anticipation of the line being filled in the next month or so.
- Light synthetic crude from the oil sands trades at ~$1/bbl above the WTI benchmark, up from $0.10/bbl below WTI yesterday, while Bakken crude delivered to Clearbrook, Minn., trades $0.70 below WTI, up $1.
- Suncor Energy (SU -0.6%), which owns a refinery in Quebec and is one of Line 9's biggest customers, and Valero Energy (VLO +3.6%), which also has a refinery in Quebec, are expected to benefit from being able to replace imported crude with cheaper inland barrels.
- The newly reversed Line 9 will ship mainly light inland crude from Sarnia, Ontario, to Montreal, after previously flowing in the opposite direction, taking imported crude to Ontario.
Suncor Energy Inc is an integrated energy company. Its operations include developing petroleum resource basin, Canada's Athabasca oil sands. It explores for, acquires, develops, produces & markets crude oil & natural gas in Canada and internationally.
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