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TSE:CNQ
Have owned for a few years. Is one of the highest costs producers of oil in the world. Can only be profitable if oil prices stay at the price they are now. Second problem is transportation, which has become much more prohibitive over the last 5 years. If we see natural gas replacing diesel, and shale oil being produced in the US, then CNQ is not in a good place.
Very well run company. Management team is exceptionally good. Have massive resources. Been struggling recently because of heavy oil differentials. Earlier had problems with the Horizon upgrader, which seems to be operating at a really, really good process now. Good balance sheet. They can sustain themselves through any economic cycle.
They have been increasing their dividends, but historically have not given out large dividends because they've deployed it, with the oil sands product. He likes CNQ, it's trading at a discount, and when the keystone pipeline goes through the discount will narrow. CNQ also deals with natural gas which has been down for about 5 years now, and drilling has slowed in the US. Over time the prices will normalize which will also help.