Wed, Nov. 18, 11:49 AM
- Suncor Energy (SU -4.3%) is downgraded to Hold from Buy with a price target of C$43 at TD Securities following the company's disappointing 2016 guidance.
- Despite SU's strong structural advantages in this market, the firm says its downward adjustments to its 2016 estimates after the company's update precipitate the downgrade.
- TD says SU's relative value suggest it is now the most expensive large-cap on a price/NAV basis, and recent share price outperformance has resulted in the highest total return of any large-cap since the beginning of the oil price rout.
Wed, Nov. 18, 10:27 AM
- Suncor Energy (SU -3.2%) opens sharply lower after announcing a larger capital budget for 2016 even as it forecasts lower production volumes.
- SU says it plans to boost capital spending to as much as C$7.3B (US$5.5B) next year, an increase from ~C$6.3B this year; SU says the program is flexible, within a range starting at C$6.7B, to respond quickly to any further deterioration in market conditions.
- SU sees 2016 production of 525K-565K bbl/day, below earlier guidance of 540K-580K bbl/day for the current year, citing scheduled maintenance at its oil sands plants for the reduction.
- Oil sands production is expected to total 400K-425K bbl/day, not including an additional 30K-35K bbl/day from its interest in Syncrude; the range is below this year’s estimate for oil sands output of 410K-440K bbl/day, not including 32K-36K bbl/day from Syncrude.
- As a result of cost-cutting efforts, SU says its oil sands cash operating costs would fall to C$27-C$30/bbl next year, below the C$28-C$31 it projects for this year.
Mon, Nov. 16, 7:46 AM
- The latest 13F from Berkshire Hathaway (BRK.A, BRK.B) shows a new 59.3M share stake in AT&T (NYSE:T), and the GM stake taken up to 50M shares from 41M. At least part, if not all of the T stake is the result of shares received in the DirecTV merger.
- Phillips 66 (NYSE:PSX) is up to 61.5M shares from about 30M; Kraft Heinz (NASDAQ:KHC) 325.6M shares from zero; Suncor (NYSE:SU) 30M shares from 23.3M, John Malone (LMCK, LMCA) a total of about 24M shares from about 13M.
- Buffett trimmed his Wal-Mart (NYSE:WMT) position to 56.2M shares from 58.3M.
- AT&T +1.4% premarket
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.
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.”
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
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, 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.
Tue, Sep. 22, 11:56 AM
- Teck Resources (TCK -9.2%) slumps to a 52-week low after Total's (TOT -2.8%) sale of its 10% stake in the Fort Hills oil sands project to Suncor (SU -1.3%) raises several questions for 20% stakeholder TCK.
- TCK's stake is valued at $620M, based on yesterday's deal, while TCK's net carrying value for the position at the end of June was $2.3B.
- But that does not mean a writedown is coming, TD Securities analyst Greg Barnes says, because TOT's sale was based on its desire to cut capital spending, not a valuation of the project.
- If TCK were to write down its Fort Hills stake, Barnes says the company's debt covenants would cause concern, causing its debt-to-capital ratio to tumble to 32% as of the end of June.
- Thus the odds of TCK selling its Fort Hills stake are "minimal," according to Barnes, while acknowledging the company's participation in the project will remain unpopular with investors in the current macro environment.
Mon, Sep. 21, 12:58 PM
- Teck Resources (TCK -5.8%) is reiterated with an Outperform rating at FBR following Suncor Energy's (SU +1.2%) announced agreement to purchase an additional 10% interest in the Fort Hills oil sands project from Total (TOT -1.3%) for C$310M; TCK has a 20% interest in the project.
- FBR analyst Lucas Pipes values TCK's share at C$1.945B, with today's transaction "right in-line with our valuation when considering Suncor’s incremental capital increase."
- Pipes believes TCK’s interest in Fort Hills greatly reduces its overall risk profile, and is encouraged by SU’s continued commitment to the project; he also likes TCK for its low-cost exposure to met coal and zinc, two commodities he sees as "better positioned in the current market environment."
Wed, Sep. 16, 11:31 AM
- Canadian Natural Resources (CNQ +5.8%) is the latest Canadian oil sands producer looking to cut costs, saying it plans to cut operating costs by $390M more than currently budgeted this year.
- CNQ, which has operating costs of ~US$30/bbl, hopes to lower that figure to $25-$27 within the next few years, to shield itself from U.S. crude prices that have been stuck below $50 in recent months.
- Cenovus Energy (CVE +6.5%) also says it is looking to aggressively slash costs, not satisfied with total costs of $11-$14/bbl and targeting a $1-$2/bbl reduction.
- Suncor Energy (SU +4.2%) has seen its cash operating costs fall to $28.20/bbl in H1 of the year, compared to $33.80 last year.
Thu, Aug. 13, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Thu, Jul. 30, 2:59 PM
- Suncor (SU +5.7%) CEO Steve Williams says prices for oil and gas asset have fallen enough to make acquisitions more attractive, but that his company is not actively pursuing any specific targets.
- Williams says SU is focused on developing its own assets and buying back shares, but that strategic acquisitions are a third option for making use of its growing cash reserves, especially as asking prices decline.
- SU's Q2 earnings fell to C$0.63 on lower oil prices, but the result was well above analyst expectations; the company cut another C$400M from its 2015 capital spending budget, and now plans to spend C$5.8B-$6.4B as it lowers its range from up to C$6.8B previously and an original target of up to C$7.8B.
- With a C$4.9B war chest, Williams says SU would consider boosting its 40.8% interest in the 180K bbl/day Fort Hills oil sands project in Alberta to assure its startup by 2017.
Wed, Jul. 22, 2:56 PM
- In contrast to his upbeat analysis (I, II) of Exxon Mobil (XOM +1.2%), Goldman's Neil Mehta thinks investors should sell Chevron (CVX -0.2%) and Cenovus Energy (CVE -2.2%) on concerns about dividend sustainability.
- Believing too many investors are focusing on absolute yield when an ability to post dividend growth is more important long term, the analyst ranks CVX a Sell given low dividend growth, weak free cash flow and E&P volume risk, while CVE is a Sell because of limited dividend growth, lower returns and a premium valuation.
- XOM and Suncor Energy (SU -0.4%), on the other hand, "are set to deliver the highest dividend growth through the end of the decade - and now offer solid valuation upside from current levels."
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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