Cenovus Energy (CVE.TO)

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.

Definitely a good stock to hold. He has it because of their very, very well defined business plan. Shareholder friendly in that they return money in the form of dividends. Likes the growth opportunities. Good balance sheet.

His favourite play in the oil sands. The PrairieSky (PSK-T) thing got him really thinking about all the drillable land this company has. They can do exactly the same kind of a sell-out, and it would be a great idea for them. There is hidden value here. Have a great spread of properties. He could see $37. There is a 3% dividend yield.

He would like to own this for older clients, but the yield is only 3%. Has been looking at the ones that would give him more of a yield, but at the same level of growth. However, on the overall energy picture, he thinks this is a great investment. Reserve life is big and is going to continue.

Short Term? Northern Iraq has impacted the price of oil. If you are looking for fast money, don’t go to this one. Hampered by operational challenges. It comes down to cash flow growth. Compare to CNQ-T where it will grow faster, or SU-T.

Still around the same price it was a year ago. If you have hung in, continue to hold. They’ve had problems at their Alberta Foster Creek project, which is why it is flat. You get paid to wait with a dividend of about 3%. This company and Canadian Natural Resources (CNQ-T) both have a fairly large royalty portion of their business. Based on what PrairieSky Royalty (PSK-T) is trading at, then this company’s case is roughly $3 a share. That is 10%. There is a really good chance they will look at it now, and possibly spin some of that off, and realize the value. Given that it is low, he thinks the stock would bump on that.

Had operational difficulties and their costs went up and has badly lagged. Prefers Crescent Point (CPG-T). If he was looking at any other names, Canadian Natural Resources (CNQ-T) would supersede this one. He sees a bigger capital gain in it.

It is finally doing well. They put a lot of money into it and production is going up significantly. As they worked into the fields, the steam ratio went up, so higher cost, but it has peaked in that field. A lot of it is geology. They have to get the cost back down again. Increased dividend 10% a year since they started paying and he thinks they will continue doing so.

Stock vs. Stock: CVE, CNQ or SU for an oil sands play. Do very little in terms of oil sands, mostly a refining company.

Oil sands volumes were up, but conventional volumes were down. Nat Gas volumes were down, too. Was a disappointment to the street. The issue has been their recovery rates. Balance sheet is in good shape, though. Makes sense to investors in high $20s to $30.

They are working through recent issues. They have great assets and are normally great executors. Thinks this is a stock you can buy and sleep well at night with. Less torquy than other integrated oil names. You have to make sure issues are not with a fundamental asset.