Cenovus Energy (CVE.TO)

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.

A lot of issues with this. In Q4 they upped their dividend 10%. Great balance sheet. Valuation is reasonable relative to the group. What he doesn’t like is that it has pretty sluggish production growth for the next couple of years. Continue to have operational challenges at Foster Creek. The steam to oil ratio is stubbornly high.

Likes this because it has been depressed. Has gone down with the oil sands effect. Oil sands have a 50 year deposit and you want to buy when assets are cheap. This company is quite cheap because they’ve had some issues with Foster Creek SAGD production. They are going to fix this and in the meantime you have a shareholder friendly management team, a great return on assets and it is now relatively on sale. 3.6% dividend yield.

Had problems at Foster Creek with their SAGD operations and this is finally getting fixed. The back half of this year, each quarter now, should get better. Margins are widening. His one-year target is $33-$35.

(Top Pick Feb 6/13, Down 9.15%) But he really likes this one. A lot of development in the oil sands. Significant additions to production in the next half decade. Decent dividend.

Bought yesterday. In around these price levels it offers tremendous values. Terrific growth profile going forward. One of the better managed companies. Production pace has kept pace with expectations. A little over 6 times forward cash flow. Good balance sheet and an efficient operator. Expects dividend increases.

Rising oil prices are generally good and this one benefits from rising WTI. The key here is that it is a great company, however it has struggled as of late. He would lighten up unless you have a very long term investment horizon. Their guidance has been discouraging even though they bumped the dividend.

Increased dividend at year-end. Markets got spooked about guidance regarding steam/oil ratios at Foster Creek. He has seen this stumble coming for some time so got out.

Has had its troubles. Two refineries in the US lost cash flow because of squeezed margins and they had to pay for renewable identification numbers for ethanol plants. We are down to a base building pattern but it has not picked up at this point. He would wait. There are better opportunities. You want to see it break through its trend line.

Very well run business. Have been struggling a little bit with their Foster Creek project but that is one of the highest class oil sands projects that we have in Canada right now. Cheap to produce and the project has a long life. This will considerably add to their growth in the next few years. A lot of the issues have been short term. You want to hold this for 2-3 years as they ramp up Foster Creek.