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COMMENT
Market Outlook 2018 was a disaster year for energy investors. What we didn't see was the narrative around the Saudi production ramping up in support of the the Trump Administration Iranian embargo. However, exemptions were allowed for Iran and there was a clear long position for supply and traders sold oil and energy stocks. The late season tax loss selling was the most vicious he has seen in his career. This year is a year of rebuilding confidence for energy investors. He sees this as an opportunity for investors as upsides are easily 50-100%.
Unknown
HOLD
So little interest in the sector, but 70% of the index is in 7 names and Suncor is the largest. No fund manager would ever be fired for holding Suncor. The new CEO is liked by the street. It is a free cash flow story and share buybacks. If you are bullish on oil going forward, this is not the one to one -- there are higher beta names out there.
integrated oils
COMMENT
Venezuela impact on Canadian energy? Setting aside the humanitarian issues, this has the biggest impact on Canadian heavy companies. They have struggled with PDVSA, the national oil company, suffering from a massive brain drain. Fields have been under invested for years. Even a change of government will not allow them to turn around production quickly -- it may take several years. As their production has been falling it has been bullish for Canada and has contributed to the $9 differentials now.
Unknown
DON'T BUY
A fine company, but there are concerns over their total inventory. It comes down to what is the problem with Canadian energy market as a whole. There are only about 5 active analysts in the sector now. When money comes back it may be Cenovus, Baytex or MEG. Canadian light oil producers have a hard time competing against US Permian producers and there is not that much difference in value -- so investors are slow to return here as well. There is just not the depth of investors for this space.
0
COMMENT
What happened with Husky? He has to be vague. HSE-T stepping away from its tender of MEG-T was not about Alberta curtailment risk. It was not about the lack of pipeline progress. Rumours suggest 60% of the shares were tendered. So it makes him think it was something too sensitive to be officially released. Perhaps there could have been an outside entity or government that would not allow Husky to purchase MEG. That is as far has he is going. MEG has been a huge winner for the production curtailment as the WCS differentials have tightened.
oil / gas
COMMENT
What happened with Husky? He has to be vague. HSE-T stepping away from its tender of MEG-T was not about Alberta curtailment risk. It was not about the lack of pipeline progress. Rumours suggest 60% of the shares were tendered. So it makes him think it was something too sensitive to be officially released. Perhaps there could have been an outside entity or government that would not allow Husky to purchase MEG. That is as far has he is going. MEG has been a huge winner for the production curtailment as the WCS differentials have tightened.
oil / gas
COMMENT
He would not own SGY-T. There are other companies that hold better assets and purchase them at better levels. He would choose TOG-T if you are looking for a sustainable yield instead.
oil / gas