Cenovus Energy (CVE.TO)

What has scared him from owning this is the rising cost structure of the Christina Lake and Foster Creek oil sands projects as they got into the later stages of their life spans. Steam/oil ratios have gone up. Third-quarter earnings came out and were a big beat on expectations, in spite of some down time. This was a modest positive for the story. He is most interested in seeing, in the coming quarters, what their plan is for their fee simple lands. He is looking for $3 billion of value to be realized in a transaction similar to Encana (ECA-T) spinning out of Prairie Sky royalties.

Sold his holdings. This is a well-run company. The last little fall has been really because of the price of oil. Have some very good assets and thinks they will continue to do well.

(A Top Pick Oct 22/13. Down 5.81%.) Still likes this. It has a long-term production profile that is going to increase going forward. Extremely well managed and well financed. This would be a Buy at these levels.

Oil Sands producer. These companies can have really, really long lives. Once they get going, they produce. The question really is, getting going. There is a lot of cost inflation that could affect the company. Once they get the projects on stream, they tend to work and tend to be good producing long-life assets. They are affected by the price of oil, so the price of oil coming down makes the economics a little harder. Until you are very, very constructive on the price of oil, there are better producers out there that don’t have those long, long life assets, that don’t have the exposure to the price of oil.

A couple of bad years in terms of an oil sands asset to be developed over decades are okay. They doubled production since being spun out of ECA-T. The company is going in the right direction, but the stock price has not followed. Their commitment to their dividend is superior.

Thinks there is good long term value in this stock but their “steam to oil” ratio has been moving higher, which is not good. Expects this to peak in Q3 and fall to more normalized levels, which should help the stock. Ultimately he would be using weakness to be buying. Good balance sheet and debt to cash flow at about 1 times. Trades in line with its peers. Nice safe dividend.

Oil has come down, but take the exchange rate into account and these guys are going to make money. Prefers CNQ-T and SU-T however.

Will it spin off its royalty assets? A number of companies have done so and the market is prepared to pay up. This company could do so. This has quite a good growth profile. He would prefer Suncor (SU-T) and Canadian Natural Resources (CNQ-T).

This is more the oil side of the old Encana (ENC-T). Good company. Hasn’t done much because of the commodity price. She is getting a little more interested in Canadian Natural Resources (CNQ-T).

(A Top Pick Aug 15/13. Up 20.54%.) The catalyst for them was bringing production on. There was a bit of concern on their steam/oil ratio which spiked up, but has now flattened out. It will take a little while for it to go back down, but it is under control now. Getting great cash flow from their refinery on the joint venture.

Thinks this stock was punished because of operational issues. There are higher costs at Foster Creek. Thinks this is going to recover. Likes the growth profile as well as the integration with the downstream.

We are going to see them going from about 270,000 barrels a day to over 300,000 in the next couple of years. They have a target of over 500,000 in 2020-2021. The growth profile is never guaranteed, but they have already identified projects where this could come to light. They have not really participated with the other oil companies in the energy boom. He sees earnings going well over $2-$2.20 in the next year or two. Yield of 3.13%.

This is expensive, relative to CNQ and Suncor (SU-T). Yesterday’s close was $33.23 and his model price is $32.37, a negative 2%, so it is basically trading right on where he believes FMV is. A nice yield at 3.2%.

Had liked this for a while because it was a bit slower in growth, but the last quarter was really impressive. Production growth has started to come back, and on the heavy side the spreads have narrowed a little bit. 3.2% dividend yield.

Has lagged the seniors. Struggled with production targets. Using more steam to get the oil out. He thinks a lot of that is behind it. It is going to be dull and boring, but for a two to three year hold you will do quite well. Prefers CNQ, but don’t sell it if you own it.