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Msg  341059 of 353324  at  7/23/2021 1:15:24 PM  by

Riskyinvestor


 In response to msg 341033 by  romm
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Re: MEG - Quick read through to CVE

 Romm,
 
The 96 FCF number does not include the 44 million from real estate sales.   
 
THis is easily seen by looking at the income statement.  NI = 68. Depreciation = 108.  Operating CF = 180.  Makes sense right!  Subtract 20 million in WC.  Add back 6 for Onerous contracts (whatever that is.)  Subtract Capex of 70. FCF = 96  
 
I add back the hedging losses of 87 million.  Remember, I was trying to read through to CVE earnings and CVE is unhedged. 
 
So on an unhedged basis, 180 million FCF is about right. 
 
Again, my post wasn't about MEG, it was about estimating CVE's Q2 FCF, which we will see next week. Look, MEG put hedges in place when the oil outlook was highly uncertain. It cost them dearly in Q2 and will cost them again in Q3 and Q4.  They are basically unhedged in 2022 and on the call they said they weren't hedging 2022 given the backwardation.  
 
At 70 oil, MEG is guiding to 1 billion in FCF annually. 
 
So I stand by my estimate for CVE of a minimum of $1 billion in FCF for Q2 with upside to 1.35 billion.  I'm framing a house here not building a piano.


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Msg # Subject Author Recs Date Posted
341070 Re: MEG - Quick read through to CVE Pipeless_Pauper 3 7/23/2021 1:50:25 PM


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