Energy Investing - Link - Eric Nuttall on BNN this past Friday - Energy Investing - InvestorVillage


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Msg  354170 of 373114  at  9/26/2021 4:02:11 PM  by

gopats

The following message was updated on 9/26/2021 4:14:24 PM.

 In response to msg 354159 by  ycdv
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Re: Link - Eric Nuttall on BNN this past Friday

  
 
I'm assuming ycdv that you were just talking in generalities.  One aspect of stock analysis where Suncor hits the ball out of the park is in its share count.
 
 
Suncor IS an excellent company that used to outperform expectations.  Syncrude always underperformed causing some buying opportunities at Syncrude.  Suncor now has a controlling interest and has been transitioning to taking over operations at Syncrude.  I looked up news on this and the latest I can find is Nov 2020 with a few other stories referencing the Nov 2020 news.  I'm not sure why this hasn't been updated.  
 
So during this time of decreasing share count one might assume a sale of production or a decrease of production.  Nope.  Other than the pandemic year production has been increasing - just not as quickly as management and analysts thought it would.   Even with the significant challenges this past few years production still is almost 700,000 barrels per day (the same as 2019 level), the share count and debt levels are substantially lower yet the stock price is WAY below the level it was in 2019.
 
 
One thing that is baffling about Suncor is their lack of promotion.  Their website contains quarterly results but no real investor presentation on company guidance - note my charts didn't come from Suncor but from other sources.  They SHOULD promote these things.
 
I reduced exposure to Suncor when the market was giving them no love and when I heard about the challenges with the maintenance.  It ended up working out.  I know that I need to reallocate some money back that direction as I agree with doom, Nuttall and many others that this is seriously undervalued.  What to sell, what to sell?  Good problems to have. 
   
 
Here's their guidance from Dec 2020.  "Suncor’s average expected upstream production of 740,000 to 780,000 boe/d represents a year over year production increase of approximately 10% compared to the midpoint guidance range of 2020.
Suncor’s Oil Sands operations cash operating costs(1) per barrel are expected to reduce by 8% to $26.00 – $28.50 when compared to the 2020 guidance midpoint. These costs include the impact of the five-year major planned maintenance turnaround at Base Plant Upgrader 2. The turnaround activities will begin in the second quarter of 2021. A portion of the reduced synthetic crude oil volumes will be offset by increasing bitumen sales and optimizing the value of the interconnecting pipelines between our Base Plant and Syncrude."
 
So clearly they've fallen short of that guidance with the challenges they've faced.  That said I think it is fairly obvious that they will get to that production number but it'll just take a bit of time with the rejigged mine plan at fort hills etc.  It's better to do things right than to have an unstable mine and a much larger problem.  I've read that over the next few years the synergies of incorporating Syncrude will really reduce costs there.  Things will improve and in the meantime they are buying a significant number of shares each month. 
 


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Replies
Msg # Subject Author Recs Date Posted
354174 Re: Link - Eric Nuttall on BNN this past Friday vxmike 1 9/26/2021 4:32:00 PM
354190 Re: Link - Eric Nuttall on BNN this past Friday ycdv 0 9/26/2021 5:53:47 PM


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