# Canadian Oil Sands (COS)



## bigpun87

Any thoughts on this stock? Been hit pretty hard lately, 52 week low, 5% dividend. Thinking about taking a position soon.


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## Betzy

Only thing stopping me is that if Recession goes this and all oil will take further hits.
Right now I am waiting...
I owned it in Dec 2010, sold for 28.10.


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## dubmac

I own some COS - it truly is getting beat up. I may buy more at the end of Sept (when more reporting is due) - also, closely watching SU


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## peterk

If you're looking for yield, go for it. But I'd prefer suncor or cnrl over COS. Perhaps I'm biased because I work at Syncrude. I don't like the joint venture structure, and I believe they're having trouble reigning in costs compared to other producers. One way they are cutting costs is an employee reduction program through attrition and limiting new hires.


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## bigpun87

anyone know why they dropped 3-4% today?


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## Dmoney

Reviving another old thread. People's thoughts? Yield looks tasty at 6%+.
Where does oil price need to be for this to turn around some?


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## Sherlock

Looks like a bargain but I already have enough of my money in oil and gas.


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## arc

looks like they're hitting a new 52 week low: buying time?


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## Dopplegangerr

I have a decent size position in them from months ago at around the $21.50 mark. I will just collect my giant dividend until it pops back up high


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## Spidey

Recent drop is probably due to the stock going ex-dividend last Wednesday. I think these type of stocks are far too beaten up and trading at similar prices to the 2008 financial crisis when oil was half the price it is now. I won't be "backing up the truck" but I'll probably continue to add to my position if the price goes lower. Fundamentals look much better than with many other energy stocks.


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## Ethan

http://seekingalpha.com/article/528561-canadian-oil-sands-is-undervalued

I picked up 100 shares earlier this week to bring my position to 200 shares. As my article suggests, this stock is way undervalued.


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## Kaitlyn

The dividend yield on this stock right now is very enticing!

Dividens have also increased siginificantly - looks like from $0.05 to $0.30 and very recently up to $0.35...!


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## Ethan

Kaitlyn said:


> The dividend yield on this stock right now is very enticing!
> 
> Dividens have also increased siginificantly - looks like from $0.05 to $0.30 and very recently up to $0.35...!


Despite the dividend increase the payout ratio is only 60%.


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## PMREdmonton

The 6.8% divy is very enticing.

Does anyone know whether they are one of the operations that does their own refining and thus is not penalized by the Cushing discount? I think Suncor has this advantage but IMO doesn't if I recall correctly.

CNQ is also looking very cheap these days but they are penalized more by the low price on natural gas than the others here. They are growing the divy at a fairly high rate but it is still very low on an absolute basis and it looks like they have room to grow it.

Athabasca oil is also very cheap considering the assets they have to develop over time. 

I think the true scarcity of oil is being underestimated these days because Iran is still producing and Saudi Arabia is in overdrive. Many of the newer sources that are being found are very expensive to develop and really need a floor price of $80-90/barrel to be considered economic. I wouldn't be surprised if there is some cutback upcoming in the development of the oil shales given the faster rate of depletion than is currently appreciated.

I do feel the Canadian oil operators are going to be selling artificially cheap so long as we lack the ability to get the oil to a refinery with access to the sea for export.

The government needs to step up and dictate rules to all the parties that are in the way (re: Native Indians on the West Coast). This resource is needed so we can fund their welfare programs and it is for the good of all Canadians including them. A fair settlement will be dictated for rent of the landspace for the pipelines and the companies will be responsible for paying any environmental damages that are incurred.


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## Kaitlyn

Ethan said:


> Despite the dividend increase the payout ratio is only 60%.


Sorry... kind of new to things. What do you mean the payout ratio? Payout is 60% of the earnings? Why does that even matter? You saying it should be even higher...?


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## humble_pie

PMREdmonton said:


> ... The government needs to step up and dictate rules to all the parties that are in the way (re: Native Indians on the West Coast). This resource is needed so we can fund their welfare programs and it is for the good of all Canadians including them. A fair settlement will be dictated for rent of the landspace for the pipelines and the companies will be responsible for paying any environmental damages that are incurred.



oh, my. This point of view prevailed from 1542 to the 1970s, but i didn't think anyone today would offer it in serious mode.

no one today would label first nations "in the way," when they are, in fact, living upon their own hereditary lands.

no government or oilco today would "dictate" a "fair settlement ... for rent of the landscape."

fortunately, enbridge itself is lightyears ahead of this dated view. The pipeline-to-kitimat consortium is offering partnerships to first nations who join them.

http://www.northerngateway.ca/aboriginal-engagement/benefits-for-aboriginals/

_" Northern Gateway is offering Aboriginal people a 10% share in a $5.5 billion project. The long-term financial benefits for participating Aboriginal shareholders will be significant. Aggregate equity ownership is expected to generate approximately $280 million in net income to neighbouring Aboriginal communities, over the first 30 years.

" Becoming an owner in this project means Aboriginal groups are going to see cash flow within the first year of operations. Through equity ownership, Aboriginal people will be able to generate a significant new revenue stream that could help achieve the priorities of their people – such as improved health care, education and housing._"

however, the campaign to recruit first nations as enbridge partners is not going well. First nations have become polarized. Some oppose the use of their land for cultural & spiritual reasons. Others holding out may be looking for bigger royalties & a higher level of skilled hiring along with training for the same, plus the holdouts probably want bigger remediation bonds.


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## Jungle

Yup, pe in the 8's, it's on a limit order right now. Already own in the 19's, don't have a problem doubling or tripling position at these prices. 
With Greece leaving the Euro, this is possible.


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## Ethan

Kaitlyn said:


> Sorry... kind of new to things. What do you mean the payout ratio? Payout is 60% of the earnings? Why does that even matter? You saying it should be even higher...?


Payout ratio is dividends/net income. A payout ratio of 60% is healthy, the dividend is not so large that it is restricting the cash flows of the corporation. A payout ratio over 100% is scary because the company is paying out more than they are earning, the only way to finance future growth and operations is either by taking on debt or issuing equity, neither of which are good.


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## Ethan

PMREdmonton said:


> Does anyone know whether they are one of the operations that does their own refining and thus is not penalized by the Cushing discount?.


Syncrude upgrading facilities convert raw bitumen to synthetic crude oil (SCO). SCO is comparable to light sweet oil that is immune from the heavy oil discount. North American light sweet oil is typically measured at West Texas Intermediate (WTI) pricing, during 2011 SCO averaged a sales price $7.32 greater than WTI due to selling in certain US markets that price oil on other measures (such as Brent and Louisiana Light Sweet).


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## Jungle

Hopefully this goes under $20 tomorrow, I will start buying again.


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## KaeJS

I'm thinking about buying this one tomorrow.


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## arc

a payout ratio of 60% is....not good. Typically below 40% is good because sufficient profits are being reinvested into the company. 

What do you think of COS vs. SU? Are there other companies that are a better pay for oil sands?


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## bettyboop

I will probably pick up some tomorrow also. I've been waiting for less than $20. a share and it's close enough for me.


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## londoncalling

arc said:


> a payout ratio of 60% is....not good. Typically below 40% is good because sufficient profits are being reinvested into the company.


Depends on the size and opportunity for growth of the company. I would rather see a payout ratio of 60 than a payout of 40 and the company making acquisitions in an area they know nothing about. Some companies should use cash flow for payout and others should use earnings for payout. I am even fine with certain companies paying out 90% provided it is growing earnings . You have to compare the payout ratio to the rest of the industry. You also have to compare other variables. It's not just here's a line in the sand. why 40%? why not 42%? But yes the lower the payout the better to a point.


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## Spidey

60% seems quite good when compared to COS's peers. Many energy companies are currently paying well over 100%.


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## londoncalling

my point exactly


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## Jungle

Never hit my limit today 

Read cos's disclaimer on their dividend policy, they make it sound like it can be cut based on cash flow needs, oil market price and/or growth.


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## PMREdmonton

It makes sense as they aren't as steady a business as PG or KO. In principle as they expand and produce more oil and oil prices continue on their upward trajectory it makes sense that they should have more FCF over time to pay out their dividend. I don't think anyone can reliably count on them to pay an ever increasing dividend yield like clockwork but I think a tranche bought now at this price should set you up for a good dividend play with potential for capital appreciation once the discount on resource stocks settles down.


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## arc

With europe and slowing growth in China, would it be possible for the price of oil to drop so low that it becomes no longer profitable for oil sands? 

What's your expectation for when COS will turn around?


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## bettyboop

pulled the trigger at 19.22


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## Dopplegangerr

I have a limit order at 19.00, I am hoping it will hit that before the end of the day. Already have 300 shares but going to average down


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## al42

I'd be careful here, looks like the oil patch is starting to get worried.

http://www.calgaryherald.com/busine...g+wary+price/6708508/story.html#ixzz1wVUJKNX8


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## Axcell

This is a falling knife. I'd wait for some indication of an upward trend before opening a position. It could easily fall below $19 next week.


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## blin10

Axcell said:


> This is a falling knife. I'd wait for some indication of an upward trend before opening a position. It could easily fall below $19 next week.


love these comments, what is the indication of upward trend? you mean when it goes back to 22$ that's an indication? or if markets rally tomorrow 200 points that's an indication? please share with us your expertise


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## Abha

blin10 said:


> what is the indication of upward trend? please share with us your expertise


I don't know if he is speaking from a technical perspective, but if he is I can answer his question. The real issue is that you need to approach this or any stock with a timeframe in mind. If it's a short swing/daytrade then traders look for uptrends or a reversal candle to show that the downside has been stemmed. Longer term investors generally value the investments based on fundamentals so you want to get in cheaply or at a fair value. Neither he or you are wrong in what you've said, but it's just a disagreement based simply on timeframe.


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## Financial Cents

I'm with Spidey. Good call.


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## KaeJS

Glad I didn't buy into this yet, however, it is still on my radar.

I might be in for 100 shares soon. I said I was going to buy the other day, but I changed my mind at 9:30am.


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## blin10

Abha said:


> I don't know if he is speaking from a technical perspective, but if he is I can answer his question. The real issue is that you need to approach this or any stock with a timeframe in mind. *If it's a short swing/daytrade then traders look for uptrends or a reversal candle to show that the downside has been stemmed.* Longer term investors generally value the investments based on fundamentals so you want to get in cheaply or at a fair value. Neither he or you are wrong in what you've said, but it's just a disagreement based simply on timeframe.


I fully know all technicals and rely on them as well, but even technicals can get you in more trouble then if you didn't know them... bottom line is if technicals were even 60-80% right then everyone would make money and that's not the case... sometimes technicals tell you downtrend is starting by cracking through major 200ma, braking down major support levels so you load up on shorts and the next day we get a market pop... usually indication of upward trend means you already too late, and when people say that to sound like they know what they talking about I just laugh

ps.. all those candle patters are complete BS.. just follow support lines, MA's and volume


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## Abha

blin10 said:


> ps.. all those candle patters are complete BS.. just follow support lines, MA's and volume


I disagree with this. Again the issue is timeframe. There are many traders (even on here) who can use candles and technical indicators to scalp trade and make decent money. But that's just my opinion =)


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## blin10

Abha said:


> I disagree with this. Again the issue is timeframe. There are many traders (even on here) who can use candles and technical indicators to scalp trade and make decent money. But that's just my opinion =)


what I meant is patterns like dark cloud, shooting star, etc is BS, but patters like W for win, head and shoulders, bull flag, etc, etc are legit...


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## HaroldCrump

blin10 said:


> patterns like dark cloud, shooting star....W for win, head and shoulders, bull flag, etc


Wait, is this the astrology thread? ;o)


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## gibor365

Why COS dividends extremely unstable?! In last 5 years they range from 1.25 to 0.15... imho it just increases stock volatility....


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## Toronto.gal

HaroldCrump said:


> Wait, is this the astrology thread? ;o)


LOL.

Here is a term closer to earth: 'Market Correction: the day after you buy stocks'. :livid:


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## Axcell

blin10 said:


> love these comments, what is the indication of upward trend? you mean when it goes back to 22$ that's an indication? or if markets rally tomorrow 200 points that's an indication? please share with us your expertise


Hope you enjoy your losses this week by trying to play hero and catch this falling knife...
I'll wait till I see a sign that things are getting better before jumping ship.


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## blin10

thanks for your good wishes, i'm still in gain from catching falling knife back in October and selling it later on and a divi... wish you well as well lol



Axcell said:


> Hope you enjoy your losses this week by trying to play hero and catch this falling knife...
> I'll wait till I see a sign that things are getting better before jumping ship.


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## Toronto.gal

If one has the time horizon, catching certain falling knives of deeply discounted companies that are not broken [and there are many at the moment], is not necessarily a bad strategy, especially since most of us would not be able to pick them up all at once [whenever the upward trend would start].


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## Spidey

Axcell said:


> Hope you enjoy your losses this week by trying to play hero and catch this falling knife...
> I'll wait till I see a sign that things are getting better before jumping ship.


I agree with Toronto.gal's comments. In my experience, timing the bottom or being ensured that all potential drops are over because "things are getting better" is next to impossible. All an investor can really do is look at the fundamentals and try to invest at an attractive valuation. In the short-term I agree that one can get their "hands cut" (mine are bleeding a little), but as long as one doesn't panic, over the long-term it will usually work out well.


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## blin10

naw you're wrong, you should follow Axcell strategy, wait with your 200k when everything falls and pick up companies at exact all time low and ride the wave up, that dude is a genius... :biggrin: 



Spidey said:


> I agree with Toronto.gal's comments. In my experience, timing the bottom or being ensured that all potential drops are over because "things are getting better" is next to impossible. All an investor can really do is look at the fundamentals and try to invest at an attractive valuation. In the short-term I agree that one can get their "hands cut" (mine are bleeding a little), but as long as one doesn't panic, over the long-term it will usually work out well.


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## Axcell

blin10 said:


> naw you're wrong, you should follow Axcell strategy, wait with your 200k when everything falls and pick up companies at exact all time low and ride the wave up, that dude is a genius... :biggrin:


That's not what I'm saying.. I said to wait until there is a visible uptrend. I'm not saying I can time the bottom... but right now it looks like this thing is on a free-fall. I'll wait until it stabilizes before picking up shares.
Anyway, we'll see how well you guys do. :encouragement:


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## Jungle

Not everyone is going to have the same buying strategy. I like to buy when beaten down or catch the falling knife with a 3 purchase stage. I have no problems with this and it's worked out in fine in the past. At some point in 30 years, companies will increase profit and value will go up. 

If it's just market noise being scared, take advantage and buy at a discount.


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## Toronto.gal

Jungle said:


> take advantage and buy at a discount.


You forgot the word 'deep'.


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## blin10

can you tell me, what is a visible uptrend to you? when euro will be sorted out ? 



Axcell said:


> That's not what I'm saying.. I said to wait until there is a visible uptrend. I'm not saying I can time the bottom... but right now it looks like this thing is on a free-fall. I'll wait until it stabilizes before picking up shares.
> Anyway, we'll see how well you guys do. :encouragement:


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## gibor365

blin10 said:


> can you tell me, what is a visible uptrend to you? when euro will be sorted out ?


This one I also don't understand.  Usually when I wait to "visible uptrend" and buy - it's too late....
Let me ask you ...if COS tomorrow jumping 2-3% -> is it a "visible uptrend"?! or it should go up more than 2 or 3 days?


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## Jungle

Maybe we should ask in the astrology thread. I saw on the news that Venus is flying in front of the Sun, and it looks like a full moon is coming too.  There could be hidden signals in the stars, telling us when to buy stocks. They are sent out by aliens in a world we can't comprehend. I was there, I promise.


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## PMREdmonton

There is a mistake that most investors are making in terms of how they think about this stock. They are letting the politics and the economy interfere too much in their valuation of this company.

It is solidly profitable with oil around $80 but is certainly more profitable at higher oil prices. Oil prices will be rising in the future but there is a floor to how much they can drop from decreased use in the Western Nations because that pool has been decreasing since 2007. All the new growth has been coming from the industrialization and upward movement of the emerging markets that has caused demand to increase permanently without any increase in new global supplies. One could actually argue that overall supply of oil has been decreasing due to the high cost of production of the new uncoventional oil (deep seawater, shale and oil sands).

So I know in the future that COS will be very profitable and has lots of oil they have yet to extract and they don't have to waste money doing a bunch of exploration to replace reserves that other companies have to do. They spend their money on R&D for extraction of oil sands instead. But the point I'm making is the supply is there and known. As oil becomes harder and harder to find the floor of oil prices is going to fly up higher and higher which is going to lead to higher and higher profits for a company that is highly sensitive to oil prices.

I don't think anyone can go wrong buying here and the dividend is really nice. 

I'm not sure this is the bottom but I would suggest people try to average in a bit starting now and buy about 1/3rd of what you want to make sure you lock up some at very low prices. This way you still have some funds to buy more at better prices if they fall some more.

Personally, I like PBN better in the Canadian oil dividend space and it is also a screaming buy at $11 right now with a 8% dividend yield and a single digit P/E and P/B << 1. They also have lots of wells to dig due to their abundance of land leases so there is little exploration risk for them in the future.

In a couple of months people will be kicking themselves for worrying about Europe and Greece and not buying highly profitable dividend paying Cdn oil companies at a large discount.


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## GOB

For anyone underexposed in energy this is a good time to increase it with stocks such as COS and PBN. Gives a nice boost to portfolio yield too. Of course we may not be at the bottom but that's why you keep cash on hand and enter in tranches.


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## Jon_Snow

GOB said:


> For anyone underexposed in energy this is a good time to increase it with stocks such as COS and PBN. Gives a nice boost to portfolio yield too. Of course we may not be at the bottom but that's why you keep cash on hand and enter in tranches.


This is my current strategy in a nutshell. I have been buying COS on the way down. Will look into PBN now. My cash stash is shrinking steadily with all of this buying.


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## londoncalling

most of the energy stocks are looking very attractive right now. PBN, COS, LNV not to mention uranium stocks.... oh the choices... I hope these bargains will last till the end of the month.


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## PMREdmonton

Uranium is also looking good.

If you want safety, buy CCO (Cameco) as they have lots of long-term contracts in place at good prices no matter what happens in the short-term in the world uranium markets. So CCO won't get hurt much by low Uranium prices but they also won't be very levered to an increase in Uranium prices when the price skyrockets due to under-investment in uranium mines because of the low price from salvage of Russian nuclear warheads. That supply is going to run out next year according to my understanding.

In the meantime there is still no viable replacement for nuclear power in the developed world. The natural gas potential is overstated due to rapid depletion of drilled wells in the new shale plays. Alternative energy still isn't there without subsidization for solar and wind. So that leaves nuclear to fill the void but current uranium production isn't even close to meeting current world demand and that doesn't account for all the Chinese and Indian nuclear power plants that are being built or are currently planned.

So if you are a real Uranium bull you are better off with something like UEC which is a smaller mining company out of the USA that does in situ recovery of uranium mostly in Texas. They are a very young firm but are in production and ramping up supply. They should be going at a good clip when the supply crunch hits and the beauty of this one is it has been badly beaten up from Fukushima and from this most recent stock market dip and are selling at quite a bargain right now when many people thought it wasn't going to see 3.50 again anytime soon. The other really good thing about this one for a bull is they sell all their uranium in the spot market so they will skyrocket if the uranium crunch plays out as expected with them feeding in the needed supply in a very inelastic market.


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## al42

Almost everything on sale these days and will probably get cheaper. Just wish I had raised some cash earlier to buy now
when things are really on sale.


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## marina628

I don't own this stock at all and not sure why it is not attractive to me .Maybe my crystal ball is broken?lol


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## blin10

hey axcell, so is visible uptrend today? just curious


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## PMREdmonton

al42 said:


> Almost everything on sale these days and will probably get cheaper. Just wish I had raised some cash earlier to buy now
> when things are really on sale.


That's what margin is for :biggrin:


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## arc

NEWS!: 
11:33 AM Canadian Oil Sands (COSWF.PK), largest owner of the Syncrude Canada JV, says syncrude production dropped 41% in May because of work on the 8-3 coker unit at its upgrader in Alberta. 

Will COS possibly drop further on this bad news? below $18?


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## blin10

if anything it should go up, once they fix it production will be back to normal



arc said:


> NEWS!:
> 11:33 AM Canadian Oil Sands (COSWF.PK), largest owner of the Syncrude Canada JV, says syncrude production dropped 41% in May because of work on the 8-3 coker unit at its upgrader in Alberta.
> 
> Will COS possibly drop further on this bad news? below $18?


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## al42

PMREdmonton said:


> That's what margin is for :biggrin:


No Thanks...I already have trouble sleeping at night with my money in the market never mind borrowed money!


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## Toronto.gal

I sleep very well at night! :biggrin:

No matter how tempting it might be sometimes, I have never borrowed money to invest.

*al:* great minds think alike. :wink:


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## al42

Thanks TGal, and I have never been tempted. I know to many people that have been severely burnt using this strategy and they will be paying
for this for many years to come.


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## KaeJS

Toronto.gal said:


> No matter how tempting it might be sometimes, I have never borrowed money to invest.


Me either! 

Borrow money to invest? What's that? :biggrin::rolleyes2::tongue:


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## londoncalling

for your sake you better hope this is nearing the bottom. for me I hope it is flat till I can deploy more cash margin free. I'll guess hind sight will tell us which is the right choice.... to leverage or not to leverage? that is a question...:biggrin-new:


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## KaeJS

I alleviated $6k of margin today.

If things go as planned tomorrow (if), I will sell off another $29,000 worth of stock, which would actually give me about a $1000 cash balance, zer0 margin.

But, since I have been investing, I have always been on margin. Always. There was only about a week where I wasn't. LOL!

Imagine how big my returns would be if I weren't paying hundreds and hundreds in interest? :tongue:


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## Spidey

There were a couple of recent insider public market buys on this one at $18.80.


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## Young&Ambitious

I stumbled across this article recently which discusses two Yale professors who have proven borrowing to trade (when you're young) will get you ahead (historically speaking).

http://www.milliondollarjourney.com...-the-benefits-of-diversifying-across-time.htm


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## KaeJS

Leverage seems to be working for me so far. I am up 8.5% YTD. TSX down 3% YTD. Stressful, though.

Interesting article. Problem is that the article is made with assumptions. Assumptions are bad.

Ironically enough, I sold everything this morning that I had on margin. I am no longer borrowing. lol.


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## Young&Ambitious

Curious, what made you change you change your strategy? I am buying right now, lots of 52 week lows and good yields to cover margin interest


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## Abha

Young&Ambitious said:


> I am buying right now, lots of 52 week lows and good yields to cover margin interest


What are you buying?


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## KaeJS

Young&Ambitious said:


> Curious, what made you change you change your strategy? I am buying right now, lots of 52 week lows and good yields to cover margin interest


Common sense.

I know I can beat the market consistently. I also know that I would be happy with earning 10% each year.

As I am up ~8% YTD right now, I rather not take the risk. If everything plays out, dividends will place me at ~10% for the year by 2013, At which time I will start the process over again. I am young, so it's best if I waste less time fooling around and more time producing results. If I can produce consistent results starting now, I will be well off in the future.

Margin has too much risk.

My strategy hasn't changed much, though. I'm just taking a "breather".


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## Young&Ambitious

Abha I've purchased COS.TO and LNV.TO at 8% yields. I've also done some short term trades with junior mining companies, so many of those are at their 52 week lows. 

KaeJS kudos to you


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## Dopplegangerr

I bought another 200 shares today averaging down to $20.59, this is now my most heavily owned stock. I believe we are at a bottom here and it could take off any day


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## Jon_Snow

Dopplegangerr said:


> I bought another 200 shares today averaging down to $20.59, this is now my most heavily owned stock. I believe we are at a bottom here and it could take off any day


I hope you are right... and more importantly, my 1000 shares of COS hope you are right. 

But to be honest, I would rather Suncor take off (got 3000 of those!).


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## AltaRed

A rather heavy bet in oil sands stocks. Granted the pressure on differentials should dissipate some as soon as the Cushing bottleneck is solved.


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## Dopplegangerr

Wow you ether have a MASSIVE portfolio or you just love energy stocks. Ether way I think those are both excellent companies.


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## Jon_Snow

The way I see it, if you are going to go BIG on a stock, why not Suncor at $27, COS at $19... Also got 1000 PBN at around $11. When these holdings get back close to their 52 week highs, however long that might take, I will have made a tidy sum. Dividends as well!


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## Kaitlyn

Jon_Snow said:


> When these holdings get back close to their 52 week highs, however long that might take, I will have made a tidy sum. Dividends as well!


IF, not WHEN


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## Jon_Snow

Kaitlyn said:


> IF, not WHEN


Belguy's female counterpart?


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## blin10

she is right, there's a good chance there will be another recession and this one might be much longer since all bail out resources are wasted already therefore energy might stay low... all it takes greece leaving euro and more problems for spain/italy and tsx will be at 8000... I know how fast this can go down, I watched 08/09 markets sink every day (that was most valuable lesson to me)



Jon_Snow said:


> Belguy's female counterpart?


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## Uranium101

blin10 said:


> she is right, there's a good chance there will be another recession and this one might be much longer since all bail out resources are wasted already therefore energy might stay low... all it takes greece leaving euro and more problems for spain/italy and tsx will be at 8000... I know how fast this can go down, I watched 08/09 markets sink every day (that was most valuable lesson to me)


What are you going to do about another recession?

Even if Greece leave Euro, it won't be as severe as 2008-2009.
Back then, it was a surprise, but this time people have been talking about it almost everyday.
I don't remember people talking about Lehman Brothers collapsing back then.

It might not be a bad thing if Greece leave Euro.
Issues will get ironed out,it just takes time.


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## blin10

a lot of major banks will loose a lot of billions if greece sinks, all euro countries invested a ton of bail out money that they will loose... imf will not have same firepower anymore to contain it and everyone will be worried about spain/italy next, that's a lot worse then 2008 when it was unexpected but world had all the money to pump into the system... 



Uranium101 said:


> What are you going to do about another recession?
> 
> Even if Greece leave Euro, it won't be as severe as 2008-2009.
> Back then, it was a surprise, but this time people have been talking about it almost everyday.
> I don't remember people talking about Lehman Brothers collapsing back then.
> 
> It might not be a bad thing if Greece leave Euro.
> Issues will get ironed out,it just takes time.


----------



## Uranium101

blin10 said:


> a lot of major banks will loose a lot of billions if greece sinks, all euro countries invested a ton of bail out money that they will loose... imf will not have same firepower anymore to contain it and everyone will be worried about spain/italy next, that's a lot worse then 2008 when it was unexpected but world had all the money to pump into the system...


I believe all banks have written off most of their Greek debts, was it 80%+?
Greece was shut off from the capital market long ago. Their sole method of financing was all those bailout funds.

The world still have money pumping into them, just run the printing presses lol.
You heard what the central banks said? We will run the printing presses over time should situation gets worse.
You just sits back and relax and enjoy the inflation.
The PIIGS going bankrupt has already been priced in, at least most of them.


----------



## Dopplegangerr

I bought last week at 19.08 guess I was to early again. Todays low of 18.68. We are amazingly close to 52 week low


----------



## Axcell

blin10 said:


> hey axcell, so is visible uptrend today? just curious


I guess now you know your answer...... glad I haven't picked up shares yet. But if tomorrow's price action is good I might be more tempted. But I'd still wait for more of a visible uptrend to add to my position.


----------



## Young&Ambitious

Dopplegangerr said:


> I bought last week at 19.08 guess I was to early again. Todays low of 18.68. We are amazingly close to 52 week low


I hear ya, I bought LNV.TO at 7.10 and then it went down to 7.00 (past earlier 52 week low of 7.14). My COS.TO average purchase price is around 19.30. I've decided to hold off until resistance is hit for a day and thinks start to turn around. Timing the bottom is just tough! But long term we can hope that those prices we will have been happy to have purchased at


----------



## Kaitlyn

Young&Ambitious said:


> I hear ya, I bought LNV.TO at 7.10 and then it went down to 7.00 (past earlier 52 week low of 7.14). My COS.TO average purchase price is around 19.30. I've decided to hold off until resistance is hit for a day and thinks start to turn around. Timing the bottom is just tough! But long term we can hope that those prices we will have been happy to have purchased at


I'm sure hoping this ship turns around. Picked up some more today. If I can get a great dividend return AND cap gain out of this... well, win/win


----------



## doctrine

LNV looks like really great value. May take a while to pay off though.


----------



## londoncalling

Young&Ambitious said:


> Timing the bottom is just tough!


I would say nearly impossible... I would say close is good enough when it comes to finding the bottom.... Pick your price and live with it... I am hoping for more flat or declining prices over the summer before I get in... Mostly due to incoming funds not in any attempt to time... I hate that I hate sitting on cash... :rolleyes2:


----------



## blin10

I like how you only reply when things go down... I asked you this 10 times now, what is a visible uptrend?



Axcell said:


> I guess now you know your answer...... glad I haven't picked up shares yet. But if tomorrow's price action is good I might be more tempted. But I'd still wait for more of a visible uptrend to add to my position.


----------



## donald

With oil dropping and expecting to stay there why not play the reverse trade?Won't you likely have to wait a few quaters before the profits start rising again(cos)I'm looking in the other direction-Like Mullen or canadian helio-gas is getting cheap and revenue should be up because there business(transports,wheels,fleets,air)are so capital intense with oil costs,which is a positive-I was looking at these kind of compaines in the past few days-good divs.Anybody see the reverse?Atleast for a few quaters.Seems like everybody is into the oil stocks(the bottoming).....they will seesaw for awhile.to early.?


----------



## Axcell

blin10 said:


> I like how you only reply when things go down... I asked you this 10 times now, what is a visible uptrend?


Google is your best friend if you don't know what a visible upward trend is...


----------



## blin10

Axcell said:


> Google is your best friend if you don't know what a visible upward trend is...


if there was an actual visible upward trend everyone would be on a huge boat in the middle of Caribbean with 10 hot chicks drinking don and not on canadianmoneyforum... dude you killing me with this uptrend sh#t lol


----------



## PMREdmonton

If oil drops more this share price can go down even more.

For a long-term holder, you will do well at this entry price and can collect the dividends until it reverses. You probably can even collect more income if you sell some covered calls which will give some protection in a downward market as your calls will decrease in value and can be bought back whereupon you can sell another call at a lower value. This would be one way to play some of the volatility here.

In general, I'm not in favor of buying puts to hedge. However, another way to play this with puts is to sell slightly out of the money puts at a price you are comfortable with. If the share price declines and puts you in the money you can try to roll the put forward in time. I think the value is solidly there so you could even choose to accept the put and then collect dividends and sell calls. Of course, vanilla buy and hold is also perfectly fine for this company IMO. They have decades of oil production with no exploration risk.


----------



## PMREdmonton

Some people use different ones to describe what a true uptrend is.

One definition that I have liked is when the 50-day SMA stops declining. If you want to think in shorter time frames than you could use the 20-day SMA but you will be more prone to catching stocks that are just having short-term bounces before another leg down.

I would always just suggest focusing on the company and deciding when they are well valued based. There is a clear projected income stream for COS as well as long-term targets for oil price and oil extraction costs. The fundamentals of oil production suggest an overall increasing price as the emerging markets continue to grow their demand for oil while new supply is mostly in the form of expensive unconventional sources - deep water drilling, oil shales, oil sands and now the arctic sea. All these new plays are expensive to explore and drill so you need a high cost for a barrel to generate the interest in exploration from the oil companies.

IMO, sub-$80 barrels of oil cannot persist for long as exploration will dry up and there will be a shortfall in production. The demand for oil is still very inelastic in the short-term.


----------



## jtc

Any thoughts on this one? I bought last year at 22.15 its been pretty much tanking since(although paying a nice dividend along the way). Had a nice recovery this week. After dividends, I'm now up about 1% since purchased, but I've seen this sucker drop more times than I care to recall. 

Is it dead money for the next few years? Or should I continue to hold since it like looks like the keystone pipeline will go through?


----------



## dubmac

jtc said:


> Any thoughts on this one? I bought last year at 22.15 its been pretty much tanking since(although paying a nice dividend along the way). Had a nice recovery this week. After dividends, I'm now up about 1% since purchased, but I've seen this sucker drop more times than I care to recall.
> 
> Is it dead money for the next few years? Or should I continue to hold since it like looks like the keystone pipeline will go through?


I have shares & I'm holding
it's been a bit of a disappointment - but - at least it cranks out a good dividend.


----------



## thompsg4416

Anyone look at this recently? It's been pretty flat over the years but has a low pe and a decent div at a relative low payout ratio....


----------



## Synergy

Still holding - ACB of $19.78. Trades in a range $19-21. Pays a good dividend but I don't expect much capital appreciation, unless oil prices continue to rise from here. I've thought of swapping it out for something with a little more growth but I think I'll hang on to it for a few more years. Holding it in a non-reg account, if I had it in a registered account I would likely trade the range.


----------



## dubmac

COS is one of my worst performers - If it ever hits 25 again - I'll sell in a heartbeat.


----------



## OurBigFatWallet

Relatively low payout ratio but cant seem to hit $22. Trades in a range of around $19-21. Nothing too exciting but good as a long term dividend stock


----------



## Canadian

Earnings are heavily dependent on the Syncrude project, which seems to frequently overrun its budget. I'd say the dividend is safe if it's yield you're chasing, but I'd avoid it if you're seeking a capital gain.


----------



## doctrine

COS definitely has my attention at $20, when the yield hits 7%. Long term assets and a willingness to raise the dividend when they can. Rare to see such a solid yield in a large cap. They're getting through a lot of capital expenditures which should free up more money in the medium term.


----------



## thompsg4416

Yeah good yield... I had some money sitting around so I just ran a screen for div's over 5 with a payout under 100 and a PE under 15. This popped up. A 6-7 percent ROI isn't too bad - beats the hell out of a GIc


----------



## My Own Advisor

Also own and will continue to hold it. Would like to see it come down in price (to buy more) but such is life. Enjoying the 6.5% yield and DRIPs.


----------



## Fain

My Own Advisor said:


> Also own and will continue to hold it. Would like to see it come down in price (to buy more) but such is life. Enjoying the 6.5% yield and DRIPs.


Great stock to hold and a great stock to trade in and out of. I've gotten about 10% buy and hold + covered calls. And a great return with selling $19 and $20 strike price puts.


----------



## My Own Advisor

Nice work fain.


----------



## Synergy

Any thoughts on COS - do you think it will finally break out of it's trading range? The yield is good but I'm tempted to take some profits and look for something with a little more growth or trade the range - BUT, according to Normine Levin we may start to see some capital appreciations and dividend increases going forward:

TOP PICK - March 21st, 2014


> Starting next year, capital expenditures start to plummet as the expansion becomes complete. Thinks production will start to go up. Unlike a lot of other producers, Syncrude produces light sweet crude, which gets a slight premium to market price, not a discounted price. They are not subject to Keystone. 6.4% dividend yield.


----------



## My Own Advisor

I'll bite, I think it will shoot up. I hope to buy a few hundred more shares in this range before it jumps. Just a guess that it will of course....


----------



## doctrine

I liked it more at the 7% yield it had for most of last year, but not all good deals last forever.


----------



## Eder

I think sell here and buy back under $20.... I own a bunch but don't trade it ... I do think you can make money swing trading this thing though. Good luck to all!


----------



## NoWayMe

My Own Advisor said:


> I'll bite, I think it will shoot up. I hope to buy a few hundred more shares in this range before it jumps. Just a guess that it will of course....


Did just that today with 200 shares (on top of the 500 I've been holding the past half year @ 20.26). Guess it could go either way but the activity recently seems positive and I see this as a long term hold anyways


----------



## thompsg4416

Eder said:


> I think sell here and buy back under $20.... I own a bunch but don't trade it ... I do think you can make money swing trading this thing though. Good luck to all!


I like the looks of it - cheap with a good div my kind of stock. I even picked some up a little while ago but only held it for a week before selling it thinking I bought a bit too high and wanting to get in around 20. Now its at a 52 week high - the upper band of its trading range since late 2011. We'll see if it finally pops. I hope not - I am actually comfortable buying it just for the div since its pretty stable.


----------



## Synergy

COS in the green again today +0.94%.

Brian Acker bullish on COS (March 26, 2014).



> We are starting to get movement in the energy patch, especially in Canada. His model price is $38.11, a 70% upside. 6.25% dividend yield.


----------



## Longwinston

Synergy said:


> COS in the green again today +0.94%.
> 
> Brian Acker bullish on COS (March 26, 2014).


Here's hoping he knows what he is talking about!


----------



## My Own Advisor

I would like to buy more shares....just no $$ right now.


----------



## Synergy

Longwinston said:


> Here's hoping he knows what he is talking about!


Tough call, another coin toss IMO ;o) - place your bets!


----------



## My Own Advisor

I'll go on record and say it will be a $24 stock by Christmas 2014.

That would be a 20% gain from January.

We'll see what the future holds


----------



## Jon_Snow

This one has tempted me. But maybe its just me, but I feel like its time to raise cash rather than go on a buying spree right now. Though with it's yield, I am torn - maybe I'll just buy a little.


----------



## PatInTheHat

Appears to have finally broken out. I'd be happy buying here if I had more cash.


----------



## Fain

Goddam, I regret my covered calls now lol


----------



## dubmac

PatInTheHat said:


> Appears to have finally broken out. I'd be happy buying here if I had more cash.


sweet!
Had no idea this one moved up from 20. Hasn't been above 23 in 2 years! Made my morning a lil brighter! Does anyone know why it went higher?


----------



## Synergy

Another 52 wk high today. All my energy holdings are starting to take flight. It's getting harder and harder not to book some profits - especially considering "Sell in May & go away" is approaching.


----------



## bmoney

Call it prudent but I took half off the table today and booked a healthy profit that I'm Happy with. It keeps making new highs and is a core holding for me, but it's had a nice run in a short time. I'm content to buy again on a pull back.

Raymond James increased their price target to $21 from $19, but I think the move is related to Fed, BoC low interest rate policy, and positive news from China.


----------



## PatInTheHat

Synergy said:


> Another 52 wk high today. All my energy holdings are starting to take flight. It's getting harder and harder not to book some profits - especially considering "Sell in May & go away" is approaching.


I'm trimming a few that are grossly overbought. COS while overbought isn't quite as bad as some.


----------



## Synergy

^ Which stocks in the energy sector do you feel are "grossly overbought". Thanks.


----------



## PatInTheHat

Synergy said:


> ^ Which stocks in the energy sector do you feel are "grossly overbought". Thanks.


TOG, LEG, CPG, POU all above 80 RSI. Almost all the CDN energies are above 70 RSI though. I should note I'm not experienced enough to know how long these trends are sustainable or how much room they could still have. CDN Energy stocks have been so undervalued for so long this may very well be the new normal and they all may just be playing catchup.


----------



## Canuck

what a couple of months for TOG, WCP, PPL, ALA, CPG, ERF, SGY & BTE. Getting a bit nervous, but they just keep going up!

Of course they won't now cuz I just said that...


----------



## OurBigFatWallet

I sold some CPG at 44 and might sell more at 45 if it gets that high. I am planning to sell some SGY at 7.50 but will keep some as a long term hold. Colborne is a very good leader and I think the markets are starting to see that


----------



## My Own Advisor

ALA and PPL have been flying! Sadly, I don't own either.....


----------



## Nemo2

My Own Advisor said:


> ALA and PPL have been flying! Sadly, I don't own either.....


Thankfully, we own both. :biggrin:


----------



## Time4earlyretirement

Canuck said:


> what a couple of months for TOG, WCP, PPL, ALA, CPG, ERF, SGY & BTE. Getting a bit nervous, but they just keep going up!
> 
> Of course they won't now cuz I just said that...


Sold my WCP on Thursday, but will definitely buy back in on the next pull back, hopefully I didn't pull the trigger too soon, most reports I've seen have targets around 16-19
Holding onto my TOG though.


----------



## Killer Z

SGY, WCP and ALA are all stocks I have wanted to start positions in for the last few weeks but I cannot find myself to do so during these rises ........will there be pullbacks, or are we just experiencing the beginning of a long climb? Million dollar question.


----------



## Synergy

Canaccord Genuity Upgrades Canadian Oil Sands to “Buy” (COS) 



> Canadian Oil Sands (TSE:COS) was upgraded by research analysts at Canaccord Genuity to a “buy” rating in a report released on Monday, Stock Ratings Network.com reports. The firm currently has a C$28.00 price target on the stock, up from their previous price target of C$21.00. Canaccord Genuity’s target price would indicate a potential upside of 15.80% from the stock’s previous close.


Thoughts on what is driving current oil prices higher? Ukraine unrest? Rotation back into the CDN energy sector - US / Int investors? Seasonal Trend?


----------



## Longwinston

The Coker at syncrude is down and is expected to have a 5 million barrel production hit for the fiscal year. Bad news, especially for COS. No link, was on financial post I think.

Tomorrow will probably be a good day to add some shares as they will likely be on sale. :/


----------



## Synergy

^ Unplanned maintenance sees Canadian Oil Sands (T.COS) production revision



> As a result, COS has revised its estimate for the annual Syncrude production range of between 95 million and 105 million barrels for 2014, which equates to 35 million to 38.6 million barrels net to COS, the largest owner of the Syncrude mine with a 36.74 per cent incerest.


http://www.stockhouse.com/news/news...-canadian-oil-sands-t-cos-production-revision

I'm not sure this will be a huge issue:



> COS has revised its estimate for the annual Syncrude production range to 95 to 105 million barrels with a single point estimate of 100 million barrels for 2014.


----------



## Synergy

I stand corrected, COS is taking a little beating this morning - down close to 5%.


----------



## Canadian

Was watching BNN this morning - one analyst thinks the dividend can be sustained by FCF and will be raised in a couple years. CIBC recently downgraded the stock and says that future dividend payments will be funded by debt. Anyone have thoughts on this?


----------



## bmoney

Call me a conspiracy theorist, jaded investor or both but POT and COS were hammered on bad news immediately after making 52 week highs. :rolleyes2: Glad I took some profits when I did. I'm still long COS @ $21.50 and will happily continue to collect the dividend, but I will re-evaluate adding to the position following the investor CC on April 30th


----------



## peterk

Delete


----------



## SkyFall

I think imma buy in I don't think it's that risky...COS has very good financial


----------



## Jon_Snow

Pretty terrible Q1 numbers - if this falls enough I might be in at some point.


----------



## Canadian

Don't hope for it to fall too much, Jon! It's still a few cents higher than where I bought in the other day :biggrin:


----------



## Synergy

Considering the following, it may not drop all that much in the near term. We may even see a dividend increase at some point if oil prices stay elevated.



> Canadian Oil Sands reported results last night and while they came in below expectations, CanaccordGenuity notes that given lower capex, weaker C$ and stronger oil prices, free cash flow numbers will be substantially above previous expectations


----------



## Gumball

Jon_Snow said:


> Pretty terrible Q1 numbers - if this falls enough I might be in at some point.


Jon, the numbers may not be the greatest but I wouldnt say theyre pretty terrible either, they cut spending and raised revenue... I happily bought at 22.99 and will gladly collect 6% yield on this one. Im also hoping for some capital appreciation in the next 18 months and will hold long term...


----------



## Canadian

Oil prices seem to be trending higher. Maybe this summer will buck the trend. Either way - if the price drops more I'm happy to add to my position.


----------



## My Own Advisor

I will happily take my dividends on this one....

As always when O&G stocks rise, I just wish I bought more sooner!


----------



## bmoney

I've dipped a toe back in today and happy to have made some profits on the swing. Still have 1/4 of my original position left to re-purchase, but I will do slowly on the dips.


----------



## dubmac

I'd like to add more COS to my position - but not sure what to pay for it. 
Morningstar dropped it's fair value from 21 to 19 in late March 2014.
what do mst consider a good price to buy this one?


----------



## My Own Advisor

Under $20 would be good but I'm not sure we'll see that again, just a hunch.


----------



## Karlhungus

Where were u guys last year when the share price was $18?


----------



## Jon_Snow

Karlhungus said:


> Where were u guys last year when the share price was $18?


Buying 2500 shares of CPG for $35. :biggrin:


----------



## OurBigFatWallet

I regret not buying more at $19.75 when it was low last year


----------



## 1980z28

I would guess if most of our oil as I understand goes to the US

The US is building there own wells for the future consumption

My question is that because there is so much oil,opec reduced output to try to keep oil at 100 us a barrel

where do we go


----------



## AltaRed

My take is oil will trend lower subject of course to any Russian hiccups vis-a-vis export restrictions in retaliation for sanctions. That said, they can hardly cut back oil exports since existing sanctions are hurting (cutting gas exports to western europe would be way more effective). I see all oil stocks trending lower over coming months. The energy sector rally this year could be totally erased.


----------



## Eder

But if you buy into COS you are not buying into an energy rally....you are buying into over 5 billion barrels of risk free oil....thats enough to last the next 30 boom and bust cycles I would think.


----------



## My Own Advisor

I hope COS tanks (pun intended) so I can buy some more!


----------



## doctrine

I like COS - it has probably the best value and dividend on the TSX 60. I'd *really* like it at or below $20 though, like it was early in the year.


----------



## AltaRed

Eder said:


> But if you buy into COS you are not buying into an energy rally....you are buying into over 5 billion barrels of risk free oil....thats enough to last the next 30 boom and bust cycles I would think.


I didn't say that. What I did say is oil stocks are likely to slump near term due to the oil overhang. COS price tends up or down depending on the margin they get and/or capital efficiency. COS could trend below $20 if oil prices get stuck in the $80-90 range for some time. That said, it is a sure winner long term... as long as they do not have a major plant catastrophe.... the problem with a one trick pony. I owned it for well over 10 years and would own it again under $20.


----------



## OurBigFatWallet

I agree with My Own Advisor - I hope COS continues to slide so I can buy at a decent price


----------



## Pluto

Just curious what people think is a good price/value for this stock?


----------



## My Own Advisor

Happy to DRIP COS for now Pluto, but I would also be happy to _buy more_ under $20 (re: 52-week low)


----------



## Pluto

Interesting. It's 2009 low was about 20. This seems to be a dividend play, not really growth prospects? Any way a payout ratio of 67% and, a decent yield, tons of assets, It seems fine.


----------



## OurBigFatWallet

Pluto said:


> Interesting. It's 2009 low was about 20. This seems to be a dividend play, not really growth prospects? Any way a payout ratio of 67% and, a decent yield, tons of assets, It seems fine.


I agree, not a whole lot for growth with COS as far as upside on the price but a steady dividend with a reasonable payout ratio. Im hoping to buy more under $20


----------



## AltaRed

OurBigFatWallet said:


> I agree, not a whole lot for growth with COS as far as upside on the price but a steady dividend with a reasonable payout ratio. Im hoping to buy more under $20


COS has not been a growth play at least since Suncor bought out Petro-Canada and became a significant owner of Syncrude. Along with Imperial Oil's interest, both SU and IMO probably can block expansion plans and why would they want Syncrude to expand production when they want to expand their own proprietary majority owned oilsands operations? COS is a cash cow and technology source to them and while they will want Syncrude to sustain their production and/or slightly increase it via debottlenecking and improved efficiencies, they likely don't want any major capex spending at Syncrude competing with them. Conclusion: Own COS for its dividend and cash flow. It wil go on and on like the energizer bunny for decades to come.


----------



## dubmac

I bought COS in Dec 2010 - and have held the original shares ever since. It seems I'm always in the red (down about 15% on the original cost presently) with COS, but closer analysis shows I'm actually up 10% on my orginal purchase because of accumulating dividends! Classic no-growth, dividend cow. I can't be too boastful though - seeing that the 10% stretches over almost 4 yrs - I'd probably have done better with a 4 yr compounded GIC..


----------



## humble_pie

black mac i too have examples like this. One recent one was temple reit, i bought it recently, it's down 40-45 cents, one might comfort oneself by thinking Ah, Dividends!

but the prob is that it will take a year to recover those pennies via dividends plus - here's the killer - the divvies are going to be taxed in non-registered. Yes there's an eligible dividend tax credit but still there's a taxable grossed-up amount, at least for me.

i think it's ok in a registered account to console oneself with dividends that mean a total holding is breaking even. But then, we don't normally put dividend payors in registered accounts, do we? because if we do, we will lose the dividend tax credit, right?

(sigh) (no free lunch)


----------



## Jon_Snow

I keep meaning to pick up some COS... but it just keeps falling. Going to wait a bit longer.


----------



## AltaRed

Jon_Snow said:


> I keep meaning to pick up some COS... but it just keeps falling. Going to wait a bit longer.


Smart idea. It is a dividend play for the most part and purchase price should be based on where you draw the line at yield. FWIW, COS has been good to me. It was close to a 5 bagger having bought it back in circa 2002 and then selling 80% of my holdings after it went up circa 475% and split 5 to 1. I will be back in at the right (lower) price as one of my income* generators (like REITs). COS management has no way to do really 'stupid' things since SU and IMO control its destiny.

* It's primary risk is a dividend cut due to an operational disaster like a major fire or prolonged low (light) oil prices.


----------



## peterk

AltaRed said:


> COS management has no way to do really 'stupid' things since SU and IMO control its destiny.


Exxon really. CEO, president, and most VPs are all Exxon transfers who do a couple years in Fort Mac and then get transferred out, replaced by new Exxon management.

Exxon processes have been phased in. Exxon networks and computer systems used.

If you like Exxon and wished they had more going on in the oil sands then COS should be your investment of choice


----------



## Jon_Snow

Not that you are biased in any way, Peterk? :biggrin:


----------



## humble_pie

altaRed speaking of dividends, some time ago i came across a fascinating form of dividend on common stock that is being paid out by a few alberta oil companies. Prominent among these are husky & arc energy.

it's a stock dividend, but not the DRIP kind. Instead, it's used to write down cost base. In other words, dividend income gets converted into capital gains.

this is only of interest to a) wealthy folks who are attracting AMT, b) very high income earners like atrpdocbiz, who's already declared he seeks zero dividend high-capital-gain-potential stocks only, or c) seniors wishing not to chow down their Old Age payments because of too-high grossed-up dividend income.

here are some interesting features of these newish stock dividends:

1) no T5s are ever prepared or sent, nor certainly T3s. The investor must instead keep his own records & adjust his cost base down by the amount of each dividend;

2) CIBC is said to be the only broker that will allow this type of plan. Other brokers have reportedly informed the energy companies that they have their hands full administering the regular DRIP dividends & their administrations cannot take on the task of yet a 3rd form of dividend;

3) clients at other brokers who wish to receive this type of stock dividend must therefore open accounts with the transfer agent - usually computershare - & have their shares in the pertinent energy company transferred over from the broker where they bought the shares in the first place (the usual fee for this is $50 per transfer.)

as mentioned, the approach is of interest to hi net worth individuals only, not to anyone else. There are several alta energy companies issuing this type of dividend in addition to husky & ARX; however some do not mention the plan on their websites.

reportedly husky is one that does not mention (i haven't looked) so i imagine an interested shareholder would have to contact husky IR.


----------



## AltaRed

peterk said:


> Exxon really. CEO, president, and most VPs are all Exxon transfers who do a couple years in Fort Mac and then get transferred out, replaced by new Exxon management.


Yes, I am aware it is IMO (XOM) that essentially runs Syncrude but I was referring to COS ownership only, circa 37% of Syncrude Ltd voting interest. I don't really trust their expertise so it is good that SU and IMO voting interests on the Syncrude Board can likely block the Syncrude "owners" from making stupid investment decisions. After all, Syncrude management must do what the directors (Owners) directs them to do.

For those not aware, most joint ownership operations are managed via joint venture agreements with one party being the operator and the one which brings all major decisions to the non-operating joint venture owners for votes. There is typically no intermediate corporate entity like what exists at Syncrude Ltd, itself a limited company.


----------



## peterk

Jon_Snow said:


> Not that you are biased in any way, Peterk? :biggrin:


What ever do you mean? I hold no shares of COS or XOM, though have owned both in the past...


_This communication was sent from an Exxon Mobil device_


----------



## 1980z28

I asked on the 15th of sept if COS was a buy

I was told no 

Now with it close to the $20 mark

Would now be a good time


----------



## GoldStone

There is a glut of oil supply on the market, and not enough demand.

http://www.bloomberg.com/news/2014-10-02/wti-crude-slips-below-90-for-first-time-in-17-months.html


----------



## Synergy

1980z28 said:


> I asked on the 15th of sept if COS was a buy
> 
> I was told no
> 
> Now with it close to the $20 mark
> 
> Would now be a good time


Wait and see how the markets react today. Futures are showing a 2.3% decline in oil pricing. If you can pick some up in the 18 dollar range I think it would be a good long term dividend play.


----------



## 1980z28

Looks like the below 20 is here


----------



## My Own Advisor

My hunch is, it will go lower still. I DRIP COS, happy to do so at these prices!


----------



## Jon_Snow

Dipped my toe in with 200 shares... May add more as it drops.


----------



## liquidfinance

Overall sentiment seem very sour at the minute. There doesn't seem to be any good news coming out. At the moment I will probably keep cash on the sides an reinvest dividends into index etf's

Although these juicy yields are tempting.


----------



## bmoney

Im happy to pick up another 250 myself, will add more if it goes lower. This is a long term hold, and I'm happy to collect 7%/yr.

Many more good reasons to buy. The masters of the universe will eventually say enough and oil prices will stabilize and reverse course. Too many billions at stake. Saudis already talking about reducing output. Also interest rates are bound to stay low with weakness in Europe/China, CDN stinks and sentiment on Energy stocks is very negative.


----------



## GoldStone

What happens if oil goes to $80? Below $80? The market seems to be pricing this in. Oil sands producers would be in a world of hurt.


----------



## My Own Advisor

Agreed GoldStone. I hope they've (Oil Sands producers) planned for this...the cyclical nature and all...


----------



## rikk

rikk said:


> 1000 COS at $19.65 into my wife's account ... assumption ... 4 decades of dividends. Ok, now I can shut this thing down for the day, go help that new boarder get settled in :cheerful:


Update: well that was not fun, put in a buy ... Qtrade went dark, for me anyway ... anyone else? ... just came back ... all's well ... add 2000 to that 1000 ... could not resist.


----------



## My Own Advisor

Geez, nice Rikk, I wish I had the coin to get more...I'll need to wait.


----------



## rikk

After a bit of reading I'm thinking this could be the new norm (fingers crossed) for a while anyway, if so, no hurry. It's just for me I'm away (no smartphone) for the next few days so it was today or not was my thinking ...


----------



## bmoney

If oil continues to drop there are two certain outcomes. 

1) the looney will drop and this is good for domestic producers exporting in USD.
2) Producers will curtail production and stabilize the price. They can always leave it in the ground or park reserves in tankers, there is already evidence of this happening. 

As a long term investor, I'm happy to wait this out in the short run, collect my dividends and let scarcity takes its course in future when Oil is twice the price.

There is a floor, are we closer to the floor or to the ceiling? I like the risk / reward here.


----------



## AltaRed

I think with all these high yield oil plays, that until there is support at the bottom and a definite turn up (not just a few days or a week), the slide could continue. All one has to do is look at a 1 year chart of COS, BTE, CPG et al to see that the downward trend has not been arrested. There might be support at last year's 4Q13 lows and that is where I would focus attention for a bottom.


----------



## OurBigFatWallet

AltaRed said:


> I think with all these high yield oil plays, that until there is support at the bottom and a definite turn up (not just a few days or a week), the slide could continue. All one has to do is look at a 1 year chart of COS, BTE, CPG et al to see that the downward trend has not been arrested. There might be support at last year's 4Q13 lows and that is where I would focus attention for a bottom.


I hope the slide continues for the next week or so - more buying opportunities for us all


----------



## AltaRed

If commodities are in a sector funk due to slowing global economies and 'oil supply everywhere', we could easily see a 6 month drift downwards.

Added: And possibly dividend cuts to high yielders AND more pullback on energy infrastructure.


----------



## My Own Advisor

You might be right AltaRed...the downturn...

Does this mean you're going to dip your toe in?


----------



## GoldStone

bmoney said:


> If oil continues to drop there are two certain outcomes.
> 
> 1) the looney will drop and this is good for domestic producers exporting in USD.
> 2) Producers will curtail production and stabilize the price. They can always leave it in the ground or park reserves in tankers, there is already evidence of this happening.


High-cost producers like oil sands will be _forced _to curtail production. Low-cost producers don't have to.



bmoney said:


> As a long term investor, I'm happy to wait this out in the short run, collect my dividends and let scarcity takes its course in future when Oil is twice the price.


How short is "the short run"? How safe is the dividend if they are forced to curtail production?

I'm just playing some devil's advocate here. I own a few shares of COS and SU.


----------



## AltaRed

My Own Advisor said:


> You might be right AltaRed...the downturn...
> 
> Does this mean you're going to dip your toe in?


I will dip my toe in somewhere sometime but I don't know that it will be anytime soon. SU is definitely on the list. Maybe COS or BTE if they fall far enough.


----------



## thompsg4416

Cos looks attractive at this price for more so then SU. Pe of 12 vs 15 for SU. Not to mention the div is 7 vs 2.x..... Might get some capital gains on SU tho.


----------



## AltaRed

thompsg4416 said:


> Cos looks attractive at this price for more so then SU. Pe of 12 vs 15 for SU. Not to mention the div is 7 vs 2.x..... Might get some capital gains on SU tho.


SU is a growth stock that can increase its production and book value. It also has a downstream business to capture refining margins if crude prices slump disproportionately. Total return is what is important. Not just dividend yield. IOW, they are not really all that comparable.


----------



## rikk

My Own Advisor said:


> Geez, nice Rikk, I wish I had the coin to get more...I'll need to wait.


Well, I just bailed ... even though there seems to be no glut in NA, markets just too uncertain at the moment :hopelessness: And cash is always good ...


----------



## gardner

I doubled down on my COS position at 19.77 this morning. Hope it was a sound move. It's dropped again to 19.70.
Greedy when others are fearful, and all that...


----------



## My Own Advisor

It keeps going lower which is great. I hope to invest more in November. Wish I had the coin now...ah well...need to be patient.


----------



## AltaRed

There is nothing on the charts that suggests the slide is reaching a bottom (resistance/support or whatever the TA types call it). Maybe there is support at the multi-year low of $19.40. That said, quibbling about 50 cents here or there probably means nothing over the long term.


----------



## My Own Advisor

Agreed AltaRed. I don't have any money to invest until Nov. anyhow, so hopefully the slide continues...on this and other O&G stocks.


----------



## rikk

Buddy here ... http://www.bloomberg.com/news/2014-10-02/wti-oil-seen-falling-by-most-accurate-forecaster.html ... is predicting $86 through 2015. I myself think he's just looking at the current futures ... http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html ... And just to say, if I can pick up 5000 shares at $0.50 to $1.00 less than I almost did, that's a potential extra $5K for me if I decide to sell. If the dividend was forthcoming, I'd be taking that into consideration ... hate to miss a dividend.


----------



## Pluto

COS s trading near it's 2009 lows when, for sure, the world came to an end. Yield about 7%. So my guess is, this is a good price - about 19.75, that is. Oil isn't going out of style in a hurry.


----------



## rikk

2000 at $19.62 just before market close ... no one appeared from the future to stop me, so I guess it isn't that bad eaceful: Will I be selling ... again ... tomorrow ... who knows ...


----------



## blin10

Pluto said:


> COS s trading near it's 2009 lows when, for sure, the world came to an end. Yield about 7%. So my guess is, this is a good price - about 19.75, that is. Oil isn't going out of style in a hurry.


if it's trading near it's 2009 lows when TSX is almost at all time high, that is not a good price then, what will happen to COS if markets/oil sink hard ? it might be an ok price to start small position, but no way it's a good price to go all in


----------



## Pluto

blin10 said:


> if it's trading near it's 2009 lows when TSX is almost at all time high, that is not a good price then, what will happen to COS if markets/oil sink hard ? it might be an ok price to start small position, but no way it's a good price to go all in


The main thing that comes to mind is that back in 09 oil was trading in the 30's per b for a while. It's no where near that now. And yes, going all in is premature.


----------



## AltaRed

Pluto said:


> The main thing that comes to mind is that back in 09 oil was trading in the 30's per b for a while. It's no where near that now. And yes, going all in is premature.


Operating costs and replacement capital (new mines) cost a lot more now. Cannot relate 2009 to today though certainly Syncrude has an edge on a lot of amortized equipment and a synthetic product.


----------



## rikk

Well, it's 9:28 here in Ottawa, wti futures $90.20 for November, more in the news there's lots of oil ... COS bid/ask via Qtrade is $19.65 ... I'll be putting in a sell at market and will be saying adios COS, see you in oh I dunno, maybe May at I'm thinking $86 oil ...


----------



## 1980z28

in for a 1k shares at 19.41

long hold ,,will add later

dividend still looks good ???


----------



## blin10

Pluto said:


> The main thing that comes to mind is that back in 09 oil was trading in the 30's per b for a while. It's no where near that now. And yes, going all in is premature.


i don't get your logic... so if in 09 oil was in 30's and cos was at 19.5, and now oil is in 90's and cos is at 19.5, so what will happen to cos if lets say (theoretically) oil goes back to 30's?


----------



## Pluto

blin10 said:


> i don't get your logic... so if in 09 oil was in 30's and cos was at 19.5, and now oil is in 90's and cos is at 19.5, so what will happen to cos if lets say (theoretically) oil goes back to 30's?


There is always a "what if" no matter what. 
If someone would have bought back in the summer at around 24, no one would say what if oil drops to 30? that's because back then things looked more rosy for oil. The logic of buying would not be questioned. Now that things look less rosy, and the share price is lower, and the yield is higher, the logic of buying is questioned. The two differing perspectives 1. a positive perspective in the summer, and 2 a negative perspective currently, are all psychological. The reality is that the assets COS is turning into income are still there. And given the volatile nature of oil prices, and the popularity of oil, not to mention our dependence on it, the price of oil will recover and COS share price as well. So there is a price war going on: apparently Russia is dumping oil at lower prices and Saudi Arabia is lowering prices to keep market share. I'm assuming that the price wars will end. In the meantime, US gasoline prices have dropped considerably giving consumers extra cash they never expected. that can't hurt their consumer economy. 

Your premise seems to be oil could never get to 100+ again. My premise is, it will, and in the meantime share holders get some income, and later, a capital gain.


----------



## daddybigbucks

i got out of canadian oil companies 2 years ago and never looked back. Big foreign oil is much more stable with much more upside.

I think its because canadian oil are always short-sighted to WOW the next quarterlies cuz everyone wants a big stock jump and then move on. 
While foriegn oil are just huge machines that have long term stable growth in their sights.

my opinion anyways.


----------



## Synergy

Starting to get quite attractive again. I will bite if it breaks into the $18 range.


----------



## AltaRed

daddybigbucks said:


> I think its because canadian oil are always short-sighted to WOW the next quarterlies cuz everyone wants a big stock jump and then move on.


Maybe for most Cdn oils, but that is not the case for COS. Everyone knows COS does not have real growth, is primarily a cash flow machine, destined to crank out as much oil production as they can at the least cost so they can to feed the needs of the other key shareholders such as IMO and SU. 

The issue then is how much sustaining/development capital do they really need to keep their machine going, is it reasonable, and how well can they safely operate to avoid disasterous catastrophies such as a major facility fire. IMO and SU want the cash flow so they are keeping their hands on the tiller. But it is also clear that building new mine trains every so often to access new areas of their reserves is extremely costly. Second quarter alone, COS share of dev capex was almost $400 million...or grossed up to 100% working interest.... about $1 billion.... in one quarter! It is obviously very expensive to build new mine trains. Fortunately that new train comes on production sometime this calendar year we think. Will their dev capex needs then drop off in a big way and then there is a ton of cash that can be re-directed to debt retirement and/or dividend increases? I haven't studied COS enough to know....but anyone buying in should be looking.


----------



## GoldStone

AltaRed said:


> Will their dev capex needs then drop off in a big way and then there is a ton of cash that can be re-directed to debt retirement and/or dividend increases? I haven't studied COS enough to know....but anyone buying in should be looking.


You can see capex profile on Slide 12 here:

http://www.cdnoilsands.com/files/Presentations/COS presentation_TD Securities_Calgary-FINAL_pdf.pdf

They expect a major reduction next year.


----------



## AltaRed

Thanks for that. I suspected dev capex would drop off considerably in 2015. Ultimately though, there will be another huge chunk of capex to develop the probable reserves of Aurora South many? years down the road.


----------



## rikk

Another bit of info for you guys ... Production is unhedged, giving investors significant exposure to fluctuations in oil prices ~ _Morningstar Analysis Report_.


----------



## Synergy

rikk said:


> Another bit of info for you guys ... Production is unhedged, giving investors significant exposure to fluctuations in oil prices ~ _Morningstar Analysis Report_.


That's the whole point, this is well known.


----------



## rikk

Synergy said:


> That's the whole point, this is well known.


Well excuse me ... perhaps well known by you and me but maybe not by others ... enjoy the day :stupid:

And while I'm here, could be when I'm back in May we'll be seeing $85 WTI, not $86 ...


----------



## Synergy

^ Sounds like a struke a nerve - sorry. Just sounded like you had been trying to point out something negative and new.


----------



## AltaRed

FWIW, I am not a fan of hedging. Hedging ultimately costs money (the counterparties ultimately have to make money on this activity over the long run). It is much better for a company to have the financial capacity (balance sheet) to borrow at low rates when they need to fund dev capex and to pay it back with cash flow. Hedging to cover a dividend simply tells me the company's balance sheet is thin and/or has reached too far on payout ratio. While the lack of hedging can make stock prices more volatile, it is also more likely to invoke discipline in dividend policy.


----------



## blin10

Pluto said:


> There is always a "what if" no matter what.
> If someone would have bought back in the summer at around 24, no one would say what if oil drops to 30? that's because back then things looked more rosy for oil. The logic of buying would not be questioned. Now that things look less rosy, and the share price is lower, and the yield is higher, the logic of buying is questioned. The two differing perspectives 1. a positive perspective in the summer, and 2 a negative perspective currently, are all psychological. The reality is that the assets COS is turning into income are still there. And given the volatile nature of oil prices, and the popularity of oil, not to mention our dependence on it, the price of oil will recover and COS share price as well. So there is a price war going on: apparently Russia is dumping oil at lower prices and Saudi Arabia is lowering prices to keep market share. I'm assuming that the price wars will end. In the meantime, US gasoline prices have dropped considerably giving consumers extra cash they never expected. that can't hurt their consumer economy.
> 
> Your premise seems to be oil could never get to 100+ again. My premise is, it will, and in the meantime share holders get some income, and later, a capital gain.


I don't go buy "what ifs", all I said is that it's an ok price (vs yours "it's a good price"). Obviously nobody knows, not me, not you, not CA who works at the bank, etc, I just go by numbers, if COS is at all time low when TSX is at all time high (almost) I would be VERY nervous holding this thing "hoping" oil will go back over 100. I also never said oil could never get to 100+ again, like I said nobody knows, it can get to 100+ in the next few weeks, who knows. Btw, watch financials, if they start to fall then oil and other sectors will follow.


----------



## Pluto

blin10 said:


> Btw, watch financials, if they start to fall then oil and other sectors will follow.


OK, thanks. I'll watch financial s.


----------



## Pluto

another thought: the average price of oil in the last three years, 2011 $87, 2012 $86, 2013 $91. COS does ok at these prices so apparently the sell off in share price isn't purely about the price of oil.


----------



## GoldStone

Interesting little post about oil futures:

http://www.creditbubblestocks.com/2014/10/crude-oil-futures-curve-has-flattened.html


----------



## AltaRed

That is a normal reaction based on the laws of supply and demand. If short term (<2 years) futures are lower, there is less cash to spend and oil companies cut back on dev capex, thereby reducing the amount of oil production that will be available a few years from now... and thus better prices 5 years out. This is classic economic theory.


----------



## Synergy

Nothing that hasn't been mentioned before but...



> Weakness in oil prices is overdone and further pressure could force OPEC to act to keep a floor under crude, according to FirstEnergy Capital's Martin King.


source: http://www.bnn.ca/News/2014/10/9/FirstEnergy-The-worst-is-over-for-oil-prices.aspx


----------



## My Own Advisor

If futures are lower...as AR says, this is great for the investor wanting to pick up O&G stocks at cheap prices.


----------



## lh0628

Does not anybody think this is to do with geopolitics? 

Put your tinfoil on, but with the tension between Russia-Ukraine/Europe/U.S. the economic sanctions that are imposed on Russia obviously isn't giving enough pressure on Vlad, what's one of Russia's main export? Natural resources, e.g. oil and gas. It's their life line, once oil prices start to fall, Russia will begin to go into deficit, declining market and economy is already starting.

I don't know what one should do as an investor, but I'm surprised no one has pointed this out. Supply and demand? Sure, but there's a bigger picture behind it all.

Disclaimer: long COS, LRE, ZAR.


----------



## Synergy

Started a 1/2 position at $18.00 this morning. Will consider buying more on further weakness.


----------



## jamesbe

18.08 here I think I'll hold this for ever


----------



## bmoney

jamesbe said:


> 18.08 here I think I'll hold this for ever


In for another 500 shares at 18.08 as-well. This stock is dropping as if the world will never need another barrel oil. I don't think it's been this low since 2008.


----------



## Jon_Snow

bmoney said:


> In for another 500 shares at 18.08 as-well. This stock is dropping as if the world will never need another barrel oil. I don't think it's been this low since 2008.


There are great opportunities in this sector if you have the stones (and the cash) to do it.


----------



## My Own Advisor

Hope to buy more in another month...trying to save up!!!

500 shares? Geez, just like that eh? Nice :biggrin:


----------



## bmoney

Agreed, all I'm looking for is steady dividend flow for the next 10 years and the rest is gravy. I'm hoping this volatility shelves some planned capex to bring supply more in-line with demand. 

Oil companies simply responded to high prices and a low cost of capital by adding supply, now we have too much capacity. Recall that just a few years ago people were mainly concerned supply would not be able to meet demand, well it did and now the price discovery mechanism is setting a new equilibrium. I think we are closer to the bottom here. The marginal cost of this new supply is at a much higher price per barrel. I don't think demand for oil is decreasing but maybe in 20 years we will all drive Tesla's, for now I'm content to hold and wait this out.


----------



## Synergy

bmoney said:


> I don't think demand for oil is decreasing but maybe in 20 years we will all drive Tesla's, for now I'm content to hold and wait this out.


Someday we will all be "driven" by Tesla / electric type contraption! But I agree, oil demand is not going away anytime soon.


----------



## FrugalTrader

I added to my position today.


----------



## Jon_Snow

Pretty much all my energy stocks just exploded higher.

This investing thing is pretty nutty. :stupid:


----------



## Synergy

Jon_Snow said:


> Pretty much all my energy stocks just exploded higher.
> 
> This investing thing is pretty nutty. :stupid:


Somebody has deep pockets! 

Job numbers in Canada came out pretty good today, perhaps that helped turn things around a little.
http://www.cbc.ca/news/business/can...bs-jobless-rate-drops-to-6-year-low-1.2794839


----------



## Toronto.gal

This is one I have wanted to own, but I'm so heavy in energy right now, that I don't want to add more. What I'm thinking of, is doing a swap, ie, trim what I already own in same space, and then start a position here.


----------



## lh0628

double post.


----------



## My Own Advisor

I think (hope) it will come down under $18. This might be the beginning...


----------



## Edgar

I got in at 18.32 for 200
It hurt me to watch the stock sitting at 17.9X, and not having a computer nearby


----------



## GOB

Edgar - smartphone app?


----------



## Edgar

downloading now


----------



## leeder

The dividend yield is nice. Judging by the number of comments on this stock in this forum, it's a favorite of many CMFers. But is this purely an income name? This stock has been stuck between $19 and $22 for the longest time. It did go above $22 a month or two ago, but now it's below $19. It hasn't grown its dividend for 3+ years and will likely not grow it based on the near 90% payout ratio. YTD, it has underperformed the likes of Suncor, which offers a high dividend growth. Valuation wise, COS has had negative earnings per share growth.

What's driving you all to this name?


----------



## GoldStone

leeder, take a look at the capex chart on slide 12:

http://www.cdnoilsands.com/files/Presentations/COS presentation_TD Securities_Calgary-FINAL_pdf.pdf

Note the hump from 2012 to 2014. This is the reason for the flat dividend and negative EPS growth. The capex should drop off dramatically in 2015. All else being equal, this should be a nice catalyst for this stock.

Of course, all else is never equal. Price of oil is the big question mark here.


----------



## bmoney

Leeder, fund managers were right to stay away from this stock the past few years. With all the cap ex, there would be no dividend growth and little catalysts to move the stock other than oil prices. This is not a good risk/reward scenario, oil topped out and among supply disruptions there was no reason to own it other than the yield, and in a bull market like this there are much better options. I became interested this year because capex will be declining soon which should free up a lot of capital to increase the dividend, of course if oil prices cooperate. I also wanted a CAD hedge, and my allocation called for more fixed income but there's no way I'm buying long bonds at 3-4% yields, so I'm comfortable with the risk I'm taking on and content to collect 7% per year until oil recovers.


----------



## bmoney

Here's Doug Porter's take on oil prices, I think its a good read to put things in some perspective

http://www.bmonesbittburns.com/economics/amcharts/oct1014.pdf


----------



## My Own Advisor

I plan to buy some Tuesday, settled at $18.30. Still a good deal at that price, heck, anything under $19 is good I think.


----------



## OurBigFatWallet

leeder said:


> The dividend yield is nice. Judging by the number of comments on this stock in this forum, it's a favorite of many CMFers. But is this purely an income name? This stock has been stuck between $19 and $22 for the longest time. It did go above $22 a month or two ago, but now it's below $19. It hasn't grown its dividend for 3+ years and will likely not grow it based on the near 90% payout ratio. YTD, it has underperformed the likes of Suncor, which offers a high dividend growth. Valuation wise, COS has had negative earnings per share growth.
> 
> What's driving you all to this name?


For me it's about income; it seems to have a range of around 19-22 (as you mentioned) and would likely struggle to get much higher. Nothing wrong with it (yield is impressive and seems sustainable) but anyone looking for big capital gains might be better off with another O&G stock


----------



## Pluto

I don't think that COS sells the stuff/oil that had been dropping precipitously in price ie light oil. I suspect the stuff it sells is at a slightly higher price than it was last June and July. Maybe someone who is more expert is this area can clarify that. For the time being, I don't think COS pricing and cash flow is negatively effected by drops is WTI, and other light oil prices.


----------



## AltaRed

SCO can trade at either a premium or discount to WTI. There are many reasons for that, including transportation and the specific blends refineries want or need for their process configuration or differences in product demand, such as jet fuel or gasoline. Sometimes a refinery will pay more for crude X versus crude Y for these reasons. Every refinery has a sophisticated linear program for their refinery and staff that continuously run it. Look at COS's investor presentation for a comparison between WTI and SCO prices. They vary constantly.


----------



## GoldStone

SCO = Syncrude Crude Oil

Investor presentation slide 15. Eyeballing the chart, SCO was around $95-$97 Canadian in March 2014.
http://www.cdnoilsands.com/files/Presentations/COS presentation_TD Securities_Calgary-FINAL_pdf.pdf

Recent quote is $85.27 USD or $95 CDN. Pretty much the same price as in March.
http://www.dailyoilbulletin.com/


----------



## Synergy

This puts an interesting twist on things:



> Saudi Arabia has reportedly been telling oil-market investors and analysts that it is ready to accept oil prices below $90 per barrel, and even as low as $80, for up to a year or two. If true, it would represent a major change in policy for Riyadh, which may be looking to slow the expansion of rivals such as the U.S. Oil was -1.45% at $84.57 at the time of writing.


Source: Seeking Alpha - Wall Street Breakfast Report.


----------



## bmoney

Synergy said:


> This puts an interesting twist on things:
> 
> 
> 
> Source: Seeking Alpha - Wall Street Breakfast Report.


No surprise Saudi's are playing defence, the US and Russia are now the world's #1 and #2 producers. Lower prices are good in the short run for the Saudi's, they are the lowest cost producer and defending their turf. However, low prices in the medium to long term is not good for anyone, not the economy, nor the environment.


----------



## Pluto

Re: Saudi's. Reportedly they are going to keep prices low until many of the drillers fold their tent and go home. A lot of drilling projects depend on oil being higher than present, so many drillers will have to abandon their projects. The main bright side is lower gasoline prices for the yanks. Might be a good Christmas via diverting money that would have gone into gasoline into new iPhones and what not.


----------



## sags

On CNBC they reported that Kuwait would be happy with $77 a barrel oil prices.

One problem for Canada is billions of dollars in lost royalty revenues, and Alberta, Saskatchewan and Ottawa will have to do some recalculating in their budgets.

Another is the possible loss of jobs in the energy and construction sector.........if project construction is halted.


----------



## Eder

I doubt any in OPEC has the discipline to accomplish anything...most are 3rd world countries with iPhones. I for one am happy that we have the chance to erase them as relevant to Western interests. Have fun with your camels & stoning of women...thanks for playing. ( bit strong but I am getting fed up to here)


----------



## rikk

Well, I bailed again ... made $0.21 though :hopelessness: Waiting for things to settle a bit ...


----------



## Synergy

^ Stop Worrying About Oil Prices; Just Buy Canadian Oil Sands Ltd. and Suncor Energy Inc::biggrin:



> Stop trying to time it


source: http://www.fool.ca/2014/10/09/stop-...canadian-oil-sands-ltd-and-suncor-energy-inc/


----------



## rikk

Yeah, I read that too ... those posts seem to typically be followed a few days/weeks later by something like whatever you do, don't buy into COS or SU ... I'm not trying to time the market ... it's not just oil, it's economies in general that seem to me to be problematic at the moment ... and I am just not comfortable so I'm happily/comfortably on the sidelines again ...


----------



## Synergy

rikk said:


> Yeah, I read that too ... those posts seem to typically be followed a few days/weeks later by something like whatever you do, don't buy into COS or SU ... I'm not trying to time the market ... it's not just oil, it's economies in general that seem to me to be problematic at the moment ... and I am just not comfortable so I'm happily/comfortably on the sidelines again ...


I here ya, there's a lot of worry and fear in the markets lately. I still have a good size cash position so I'm happy to continue to buy a little here and there on the dips. I also have quite a long term time horizon so I'm okay with turning on the DRIP's and letting some shares accumulate at a discount.


----------



## bmoney

If I say "Uncle" will you make the pain go away?

Someone posted this in the Suncor thread

http://business.financialpost.com/2...rgy-stocks-as-wcs-prices-defy-global-decline/


----------



## My Own Advisor

Happy to run the DRIP taps for COS!!


----------



## doctrine

COS is now well below its 2009 lows. It looks really good here. The only question is timing..if oil goes back to $90-100 in the next 3 years, there could be a lot of dividend growth here.


----------



## Synergy

rikk said:


> I'm not trying to time the market ... it's not just oil, it's economies in general that seem to me to be problematic at the moment ... and I am just not comfortable so I'm happily/comfortably on the sidelines again ...


Everyone seems to have a different definition of market timing. I'm just wondering why this would not be considered market timing? If you're not selling to re-balance your portfolio or to reduce or eliminate a stock that you feel is overvalued, it looks somewhat like timing the market to me. Especially if you felt that COS had value at these levels. Sitting on the sidelines waiting for a better time seems somewhat like market timing? But, I guess one could argue that they are simply re-balancing to a new "risk tolerance" say from being a 70/30 split in equities / FI to say 50/50 or even 30/70. Just curious.


----------



## My Own Advisor

FWIW, 2009 lows are a good thing. If this is market timing then yes, I'm guilty, I do it when I see 20%+ corrections.

I hope to buy more this month...if I have to steal a bit of cash from our savings so be it. A good deal in my books!

Happy Capitalism!


----------



## Synergy

My Own Advisor said:


> FWIW, 2009 lows are a good thing. If this is market timing then yes, I'm guilty, I do it when I see 20%+ corrections.


If you're buying more of an existing position that tanked say 20% then one could in essence purchase up to 20% more and it would appear to be re-balancing, not necessarily market timing. Additionally, if you see "value" in a sector, equity, market, etc. that you don't currently own after a 20-30% correction then one could argue that this is not necessarily "market timing".

Personally I'd prefer the markets to continue going up and never look back!, but if the peaks and valleys are inevitable then I can understand why you'd be happy to see things at a discount while you're in an accumulation phase.


----------



## thompsg4416

Starting to look to good to be true. Going to,finally load up on some in both the TFSA and RRSP.


----------



## rikk

Synergy said:


> Everyone seems to have a different definition of market timing. I'm just wondering why this would not be considered market timing? If you're not selling to re-balance your portfolio or to reduce or eliminate a stock that you feel is overvalued, it looks somewhat like timing the market to me. Especially if you felt that COS had value at these levels. Sitting on the sidelines waiting for a better time seems somewhat like market timing? But, I guess one could argue that they are simply re-balancing to a new "risk tolerance" say from being a 70/30 split in equities / FI to say 50/50 or even 30/70. Just curious.


Started out as timing, e.g., I've traded COS in the past in the what ... $19 ~ $21 range. _Up until yesterday I felt COS had value, today I'm not so sure_ ... it's looking like could be a new paradigm that I don't yet understand so I'll just keep reading. Fwiw, this month was trading 5000 shares plus of COS, that's how confident I was in COS ... any way, no hurry ... as I said to someone who PMd me basically calling me an idiot ... why the concern with deciding to sell, or buy ... geez, $31.57 to trade 5000 shares with Qtrade.

Update: it's 09:35h, COS is at $17.31 ... am I glad I didn't hold at that bargain price of $19.65 ... yes, and I'm sleeping very well, slept in today actually, and that's what counts for me these days ...


----------



## Synergy

rikk said:


> Update: it's 09:35h, COS is at $17.31 ... am I glad I didn't hold at that bargain price of $19.65 ... yes, and I'm sleeping very well, slept in today actually, and that's what counts for me these days ...


Yup, the carnage continues this morning! No harm in watching from the sidelines.


----------



## rikk

Synergy said:


> Yup, the carnage continues this morning! No harm in watching from the sidelines.


Agreed ... and just to say, at this point in time I'm considering, when the dust settles, just going with something like CDZ ... zzzzzz :listening_headphone


----------



## birdman

Stocks were 28% of my investments and over the past week or so have reduced that to 20%. Now hold mostly banks and some utilities.


----------



## My Own Advisor

Hopefully prices will stay low until Jan. 1, 2015 - TFSA time


----------



## bmoney

Was anyone in on the CC this morning with the CFO?

I did some homework on the stock last night. The current cost of extraction is approximately $49 per barrel, $10 higher than in 2010 at roughly the same output. WTI was approx $80 in 2010 and COS was $28 a share for comparison. Natural gas is a significant component to production, they were much higher in Q1 and Q2 2014 compared to 2010, however nat gas prices has recently backed off about 20%. With lower expected capital costs, more efficiencies from the new rail mines in Q4, lower nat gas prices, I think the price per barrel should go down toward the end of this year and into 2015. The fundementals look very attractive to me here.


----------



## 1980z28

You can always pick away

3 years from now,I would guess higher plus a dividend


----------



## Synergy

bmoney said:


> Was anyone in on the CC this morning with the CFO?
> 
> I did some homework on the stock last night. The current cost of extraction is approximately $49 per barrel, $10 higher than in 2010 at roughly the same output. WTI was approx $80 in 2010 and COS was $28 a share for comparison. Natural gas is a significant component to production, they were much higher in Q1 and Q2 2014 compared to 2010, however nat gas prices has recently backed off about 20%. With lower expected capital costs, more efficiencies from the new rail mines in Q4, lower nat gas prices, I think the price per barrel should go down toward the end of this year and into 2015. The fundementals look very attractive to me here.


Nice summary, thanks. Short term it could get a little ugly, but longer term I agree, I think we'll be okay.


----------



## thompsg4416

Picked up 500 shares today. happy hunting.


----------



## My Own Advisor

I picked up 100 shares.

I will try and save more cash to and buy more if the price continues to fall. Let's hope.


----------



## 1980z28

oil oil where will you land

anyone want to guess

US dollars maybe 78.95


----------



## Synergy

"How an Investment in Canadian Oil Sands Ltd. Could Double in 5 Years" - that would be nice:biggrin:



> U.S. crude is currently trading just above $82 a barrel, under pressure by increased supply from the U.S. shale boom and declining demand. While it is hard to predict exactly what oil’s bottom will be, many analysts expect that in the coming years oil will stage a recovery as some shale production is about to become uneconomical at the current selling price of oil. In fact, one of the world’s best oil analysts — who correctly predicted the 2008 oil bubble — thinks that the shale oil boom will end up as a disappointment. This analyst, Andrew John Hall, sees oil rising to $150 a barrel in the next five year


Source: http://www.fool.ca/2014/10/16/how-an-investment-in-canadian-oil-sands-ltd-could-double-in-5-years/


----------



## bmoney

Synergy said:


> "How an Investment in Canadian Oil Sands Ltd. Could Double in 5 Years" - that would be nice:biggrin:
> 
> 
> 
> Source: http://www.fool.ca/2014/10/16/how-an-investment-in-canadian-oil-sands-ltd-could-double-in-5-years/


I did a bit more buying yesterday and again today. The "end of the world" (2009) low was $16.65, we got to within 2% of that low. I'm content with my 2000 shares, now just pay me my dividend.

Also, there is a better than even chance the Republican party takes control of congress. If you have been watching US news, Republicans have been touting Keystone XL as one of the first things on the agenda.


----------



## My Own Advisor

Remains a great entry point or adding point, under $18. You wonder how long it will stay here. One big day on the markets and *poof* could be back over $18.


----------



## Synergy

My Own Advisor said:


> Remains a great entry point or adding point, under $18. You wonder how long it will stay here. One big day on the markets and *poof* could be back over $18.


Oil futures are up close to 2% this morning so the "poof" could come sooner then later. Then people will start complaining about how they "missed" the opportunity to buy in, etc. Still good under $19 for long term investors who want a solid yield - IMO.


----------



## bmoney

The bid/ask has been steady at 18.60 since 7:45am, still plenty of time to go before the open, but this is looking ready to pop.

Still a buy under $19


----------



## rikk

^ 09:13 and bid at $18.44, was $18.16 a few minutes ago ... did some buying yesterday, won't be jumping in right away today. Just reading the advance is based on speculation central banks will step in ... who knows ... enjoy the day 

09:18h ... $18.00 even ...


----------



## rikk

rikk said:


> ^ 09:13 and bid at $18.44, was $18.16 a few minutes ago ... did some buying yesterday, won't be jumping in right away today. Just reading the advance is based on speculation central banks will step in ... who knows ... enjoy the day
> 
> 09:18h ... $18.00 even ...


2000 at $18.00 ... chores to do, can't just sit here all day ...


----------



## My Own Advisor

Geez rikk! In a good way I mean....(2000 shares)


----------



## rikk

My Own Advisor said:


> Geez rikk! In a good way I mean....(2000 shares)


^ I'm one of those guys that went all cash a while back ... I'd lost interest in the market, my thinking if I'm not focused, I'll make mistakes. My focus now is dividends ... seems to me COS is as good a place as any to be ... did more reading, feeling confident in oil. Getting lazy, picked up some CDZ as well as COS yesterday ... and that's that for now ...


----------



## fatcat

http://capi.9c9media.com/destinatio...s/469613/contentPackages/452664/manifest.m3u8


----------



## Synergy

fatcat said:


> http://capi.9c9media.com/destinatio...s/469613/contentPackages/452664/manifest.m3u8


What is this?


----------



## fatcat

Synergy said:


> What is this?


a bnn video that looks at oil companies that are considered somewhat defensive if we facing more drops in oil http://www.bnn.ca/Video/player.aspx?vid=469613

at 2:00 in he cautions against cos and meg and i have seen meg dissed by others because of debt
in the case of cos the inabaility to maintain distributions as well as make money in a low cost enviromment

i used to own it but it seems to be a company that can't get its act together'

the bbb video just mentions meg and cos as cautions but doesn't give as much detail as i'd like


----------



## fatcat

Synergy said:


> What is this?


a bnn video that looks at oil companies that are considered somewhat defensive if we facing more drops in oil http://www.bnn.ca/Video/player.aspx?vid=469613

at 2:00 in he cautions against cos and meg and i have seen meg dissed by others because of debt
in the case of cos the inability to maintain distributions as well as make money in a low cost environment
both are more exposed to falling energy prices

i used to own it but it seems to be a company that can't get its act together

the bbb video just mentions meg and cos as cautions but doesn't give as much detail as i'd like


----------



## doctrine

COS is 100% unhedged. But they do not have much debt at all, far less than most oil companies. So, they could maintain their dividend for a period of time, or hang on even if they were breaking even. They could also stop capital expenditures entirely and slow down operations. But if oil stays at this level over the next few years, they will have nearly 10%/year in free cash flow above and beyond the current dividend (something like $1B a year). Very, very well valued. When the cash gusher starts, I seriously doubt it will be trading at $18/share.


----------



## My Own Advisor

Loading up on COS and SU for that matter, I suspect investors will be very, very much rewarded in 5-10 years.

Just a guess, because the long-term need for oil isn't going anywhere.


----------



## doctrine

The world is consuming 91 million barrels of oil a day, up from 90 million last year. Oil demand is estimated to increase by at least 1 million a year for the foreseeable future. China burned 6% more oil last month than a year ago. At $80-85, oil demand will only rise even faster. Current assessments of low oil demand are very wrong.


----------



## Toronto.gal

Thanks doctrine!


----------



## rikk

rikk said:


> ^ I'm one of those guys that went all cash a while back ... I'd lost interest in the market, my thinking if I'm not focused, I'll make mistakes. My focus now is dividends ... seems to me COS is as good a place as any to be ... did more reading, feeling confident in oil. Getting lazy, picked up some CDZ as well as COS yesterday ... and that's that for now ...


Oh yeah, for completeness, also added 1000 TOG ... there, that's it for now ... well ok, some TWD as well, for medicinal purposes .. enjoy the weekend ... ok, it's pool, beer, bar, band for me


----------



## GoldStone

doctrine said:


> COS is 100% unhedged. But they do not have much debt at all, far less than most oil companies. So, they could maintain their dividend for a period of time, or hang on even if they were breaking even. They could also stop capital expenditures entirely and slow down operations. But if oil stays at this level over the next few years, they will have nearly 10%/year in free cash flow above and beyond the current dividend (something like $1B a year). Very, very well valued. When the cash gusher starts, I seriously doubt it will be trading at $18/share.


A poster on Stockhouse board built a table to test cash flow sensitivity to WTI price and production volume.

http://www.stockhouse.com/companies/bullboard/t.cos/canadian-oil-sands-limited?postid=23028307
http://www.stockhouse.com/companies/bullboard/t.cos/canadian-oil-sands-limited?postid=23035025

I haven't checked his numbers but the picture he paints is quite worrisome. There are quite a few scenarios where cash flow can't support the dividend. It's possible, of course, that potential cut is already priced in to some extent.

OTOH, Goldman Sachs said that oil price drop is overdone. They don't see a severe imbalance between supply and demand.
http://www.marketpulse.com/20141017/goldman-sachs-says-oil-bear-market-excessive/


----------



## AltaRed

What is wrong in that Stockhouse spreadsheet is the capex number. It is exceptionally higher than what it is going into 2015.


----------



## Eder

Am I wrong here to think that with our low Can buck and divi's paid in Can bucks yet oil selling in USD that once cap ex goes down next season,COS easily covers the dividend at $80 oil and can even raise dividends?


----------



## GoldStone

AltaRed said:


> What is wrong in that Stockhouse spreadsheet is the capex number. It is exceptionally higher than what it is going into 2015.


He used 600M for Total Capex + Maintenance.

COS guidance document for 2014
http://www.cdnoilsands.com/files/GuidanceDocument/2014-Guidance-July31-14-FINAL-FOR-RELEASE.pdf

COS share of capex: 575M
COS share of regular maintenance: 292M

Let's assume that maintenance stays the same in 2015: 292M

Eyeballing investor presentation chart, I see 2015 capex around 110-120M. Let's use 120M to be conservative.

Total 2015: 292M + 120M = 412M

He is off by: 600M - 412M = 188M

Shares out: 485M

He is off by: 188M / 485M = $0.39/share or a full quarter worth of dividends.


----------



## doctrine

So, at $80/0.88US, Cdn Oil Sands can sustain some capex plus the dividend plus a little leeway, in addition to being very low on debt. That is about as good as you get in the oil patch. And with essentially zero production decline rate.


----------



## Jungle

Norm Rothery says the market might be right in calling for a dividend cut:

http://www.moneysense.ca/invest/stocks/oil-prices-plunge-puts-dividends-at-risk


----------



## AltaRed

I would agree except I think the market does not realize that the high COS dev capex program is winding down. Time will tell of course. 

Over a long period of time, I agree with Norm that earnings need to cover dividends but over short periods of time (in years), it is free cash flow that is the more sustaining factor. If earnings were that important short term, CPG would already be dead in the water. All CPG is doing is diluting shareholder equity with no earnings coverage.

Note: In MoneySense Retirement 100 stocks, dividend/earnings ratio is 86% while CPG is 531%, the worst in the 100 list. One difference of course since the MoneySense data is the drop in oil price. CPG has short term hedging coverage while I believe COS does not.


----------



## bmoney

Fairly lazy reporting on Norm's part, he is a CFA after-all but didn't bother to dig into the balance sheet. EPS was lower last quarter because of an unplanned outage and maintenance costs, nevermind the capex. We were also coming off the highest nat-gas prices in 4 years. I would have expected better reporting from moneysense, but this is the internet after-all and anyone can be a (unpaid) journalist.


----------



## My Own Advisor

Rumours of dividend cuts or otherwise, since nobody really knows what will or might happen, I've bought more and will try to buy more in 2015; especially if the price remains around $18.

I would expect CPG to cut their dividend long before COS, but then again, who really knows.


----------



## Jon_Snow

Ah, more hand wringing and fretting over CPG dividend. I do know that CPG didn't cut it in 2008-09, when the end of the world was nigh... The reason why Crescent Point does what they do (which apparently drives some people nuts) is largely to maintain the sanctity of the dividend - which is why I own them - a lot of them.

Over the past 3 years, while this debate has gone on, I have collected around 24k in CPG dividends (ballpark, pre tax). 

Just sayin'.


----------



## humble_pie

i swear, that cpg-cut-dividend virus spreads faster than ebola


----------



## Jon_Snow

Hahaha... as another big CPG holder on CMF, I was hoping you would make an appearance Humble....

As usual, you didn't disappoint. :biggrin:


----------



## humble_pie

jon do u think there are some on here who are short CPG?

normally when we see steady-eddy-ready-steady opposition, we suspect a professional short ...

our consolation is that they have been killed daid having to pay out those dividends all those years ...


----------



## My Own Advisor

Jon_Snow said:


> Over the past 3 years, while this debate has gone on, I have collected around 24k in CPG dividends (ballpark, pre tax).
> 
> Just sayin'.


SOLID! 

Folks can predict what they want. Until it happens, I'm holding and likely buying more in December if prices get to $35.


----------



## Jungle

bmoney said:


> Fairly lazy reporting on Norm's part, he is a CFA after-all but didn't bother to dig into the balance sheet. EPS was lower last quarter because of an unplanned outage and maintenance costs, nevermind the capex. We were also coming off the highest nat-gas prices in 4 years. I would have expected better reporting from moneysense, but this is the internet after-all and anyone can be a (unpaid) journalist.


I felt the same way too, I am not worried as I own cos from a few years ago. I do watch the quartely reports and did notice that maintenance did hit their earnings last q, this is why he is referencing low eps in last quarter to dividend pay out.

I wonder if sometimes they publish articles like that just to get traffic for adds.


----------



## doctrine

I don't think either CPG or COS are likely to cut dividends unless oil drops quite a bit further. I think a lot of people underestimate how quickly oil production slows if massive capital expenditures aren't made. You could see massive drops in US oil production in as few as a couple of months.


----------



## AltaRed

humble_pie said:


> jon do u think there are some on here who are short CPG?
> 
> normally when we see steady-eddy-ready-steady opposition, we suspect a professional short ...
> 
> our consolation is that they have been killed daid having to pay out those dividends all those years ...


If these last posts are a curve ball thrown at me, please re-read. I said IF earnings were as important as Norm suggests in the near term, CPG would be a disaster. But it isn't. Cash flow is more important near term including means such as shareholder dilution. Long term is a whole different matter. Money (profit) ultimately cannot be made without earnings.


----------



## humble_pie

AltaRed said:


> If these last posts are a curve ball thrown at me, please re-read. I said IF earnings were as important as Norm suggests in the near term, CPG would be a disaster. But it isn't. Cash flow is more important near term including means such as shareholder dilution. Long term is a whole different matter. Money (profit) ultimately cannot be made without earnings.



altaRed i do sense that your concern is genuine. But i think the time has come when you might supply more muscle. What you keep saying, quite vaguely, is that the fash for CPG reminds you of unit trusts before their collapse; the CPG metrics are not sound; at one point you said CPG cash flow was going down when it was, in fact, going up (i had to produce a multi-year table to convince you.)

& then, having created this miasma of doubt, you typically retreat & state that you will leave it to others to dig out the real finanial grit.

me i think there are only so many times a person can do this & now you have run out of free passes!

i can't comment on COS because i've never held it. I do notice mr Rothery saying its dividend during the past 4 years has bounced wildly between $.20 & $1.25. This is nothing like the dividend history of CPG, which has been stable at $2.76 per annum for nearly a decade.

we've already discussed the CPG dividend in another thread & there's nothing to add. I believe the hedge program has secured it for at least a year, is expected to assist the dividend for as long as 2-3 more years.

there is the issue of the so-called world oil glut, which didn't exist at the time of the above-mentioned dividend discussion. If true, the world could face a prolonged period of low oil prices. Again, if true, not only would energy stocks remain in the dumps for years, but their dividends would indeed be likely cut. All companies in the sector will suffer, not just CPG.

however there are competing theories, one being that the US & the saudi rulers have collaborated to drive down the price of oil in order to put the screws on russia. If there's merit to this hypothesis, the downward pressure should pop by sometime in 2015.

i for one would have no way of knowing which view might be more accurate. I can only listen to proponents of the arguments. For myself, i believe it's too soon to rush out & load up on oil stocks.


----------



## AltaRed

humble_pie said:


> altaRed i do sense that your concern is genuine. But i think the time has come when you might supply more muscle. What you keep saying, quite vaguely, is that the fash for CPG reminds you of unit trusts before their collapse; the CPG metrics are not sound; at one point you said CPG cash flow was going down when it was, in fact, going up (i had to produce a multi-year table to convince you.)
> 
> & then, having created this miasma of doubt, you typically retreat & state that you will leave it to others to dig out the real finanial grit.


At the risk of derailing this COS thread further, that is a fair comment. I was looking at bad sources of data via my trading platform that I did not validate elsewhere. There is no substitute for a company's own financials on their website and I should have known better. But my views on CPG stand. They have one of the greatest, if not the greatest, share growth creep in Canada's top 100, much of it a result of Treasury shares issued for the DRIP program. The best companies buy back shares to pay for both DRIP and compensation programs to keep their shareholders whole. Cash flow and some hedging will keep the wheel going for awhile (as it did trusts for 10 years in many cases) but CPG will have to change their ways eventually when their float volume overwhelms their ability to pay dividends.


----------



## humble_pie

AltaRed said:


> ... But my views on CPG stand. They have one of the greatest, if not the greatest, share growth creep in Canada's top 100, much of it a result of Treasury shares issued for the DRIP program. The best companies buy back shares to pay for both DRIP and compensation programs to keep their shareholders whole. Cash flow and some hedging will keep the wheel going for awhile (as it did trusts for 10 years in many cases) but CPG will have to change their ways eventually when their float volume overwhelms their ability to pay dividends.



we have gone full circle! at the time we had the dividend pow-wow, i was grateful for your posts & i thanked you very volubly.

now here are more legitimate concerns on your part. Everyone in CPG or thinking of it should pay attention. These are the brightly coloured threads that make for a fine multi-striped tartan of discussion, imho.

btw i did *not* get mr Rothery's argument to buy his 10 high dividend stocks now. He seemed to be saying Hurry-Hurry-buy-them-now-because-they-will-crash-after-the-dividends-are-cut.

i'm totally missing the point ... after the crash Rothery's readers are going to own a fine portfolio of low-dividend stocks that have lost 35-50% of their recent highs? this is desirable?

he *might* have been suggesting Hurry-Hurry-buy-them-now-but-be-prepared-to-bail-after-a-few-months-because-the-dividends-will-be-cut.

ouch! that is a twin precipice of market timing plus low-grade stock picking i'm not able to jump over.


----------



## HaroldCrump

humble_pie said:


> btw i did *not* get mr Rothery's argument to buy his 10 high dividend stocks now. He seemed to be saying Hurry-Hurry-buy-them-now-because-they-will-crash-after-the-dividends-are-cut.
> i'm totally missing the point ... after the crash Rothery's readers are going to own a fine portfolio of low-dividend stocks that have lost 35-50% of their recent highs? this is desirable?
> he *might* have been suggesting Hurry-Hurry-buy-them-now-but-be-prepared-to-bail-after-a-few-months-because-the-dividends-will-be-cut.
> ouch! that is a twin precipice of market timing plus low-grade stock picking i'm not able to jump over.


Well, the article is about the Dogs strategy (Dogs of the TSX in this case).
Following the Dogs strategy dictates that one must buy the 10 highest yielders at the start of the year, and re-shuffle each year with the then 10 highest yielders.

You either follow the strategy or you don't - you can't market-time or second guess the strategy.

I don't recall the specifics, but following this strategy would have caused one to purchase TransAlta in the past as well.


----------



## humble_pie

lol this is a strategy?

- buy 2nd or 3rd rate cyclical stocks when their dividends are high
- hold for a year while their dividends are cut & predictably their shares crash
- then sell crashed shares for a 40% loss
- then scrape together remaining iraqi dinars & go buy this year's list of 10 highest divvies
- welcome to jihadi investing


----------



## rikk

Best posted to the CPG thread but since you CPG guys are here ... fwiw ... "Very few people have a neutral position on Crescent Point. On one side of the camp, ... http://www.fool.ca/2014/10/21/cresc...rgy-corp-which-is-the-best-income-investment/


----------



## HaroldCrump

humble_pie said:


> lol this is a strategy?


It's supposed to be :biggrin:
The Dogs of the TSX is a variant of the Dogs of the DOW strategy.

I went back and re-read Rothery's article.
It seems that he has customized the Dogs of the TSX, and is calling it is a _safer _Dogs of the TSX strategy.

I agree that it is safer...it has got stalwarts like the Bank of Nova Scotia, Bank of Montreal, and BCE on it.

But then, we are not supposed to tinker with the strategy.
It either is, or isn't.
No market timing or second guessing allowed.

BTW, I believe it is David Stanley, not Norm, that developed the TSX version of the Dogs strategy.
He calls it Beating the TSX strategy:
http://www.finiki.org/wiki/Beating_the_TSX_(BTSX)


----------



## bmoney

Curious when Mr. Market will realize that COS sells Syncrude (SCO) which as of yesterday's close was priced at just over $90/bbl CDN. The average selling price for SCO this year was $107. The stock is trading based on WTI, am I missing something here?


----------



## Fain

bmoney said:


> Curious when Mr. Market will realize that COS sells Syncrude (SCO) which as of yesterday's close was priced at just over $90/bbl CDN. The average selling price for SCO this year was $107. The stock is trading based on WTI, am I missing something here?


as of yesterday's close SCO is priced at a $1.69 discount to WTI. It is roughly in line with WTI this year trading at very small discounts and takes a hit when WTI takes hits. COS also does not hedge and sells spot so drops in oil prices are immediate. The only offsetting factor(that i see) is the CAD weakening when oil dropped but this is a small offset by comparison. 

Use the link below. I find it very useful.

http://www.psac.ca/firstenergy/


----------



## rikk

@bmoney ... I'd say _all_ COS holders are aware COS produces SCO, and that SCO sells as you've described ... WTI is simply the benchmark for western crude, with SCO selling at a premium or discount to that benchmark ... is my understanding. And as mentioned many times, COS does not hedge.


----------



## bmoney

rikk said:


> @bmoney ... I'd say _all_ COS holders are aware COS produces SCO, and that SCO sells as you've described ... WTI is simply the benchmark for western crude, with SCO selling at a premium or discount to that benchmark ... is my understanding. And as mentioned many times, COS does not hedge.


It seems the drop in COS stock is more inline with WTI than SCO, which to me is odd considering the premium SCO currently trades at buffered by the slide in CDN. When I look back to 2011-2012, things look rosier today but the stock has performed relatively worse in 2014, so fears are being priced in. I'm seeing opportunity, but I could be wrong and it would be nice to review a cogent bear case to test a thesis against.


----------



## bmoney

Oil down again, bears finally traded WTI sub $80, some calling for a floor around $75. 

The US shale boom (and Canadian oil sands) is the golden goose, and by some estimates US shale has added 2.1 million jobs since 2012. With all of the bank financing and M&A fees generated from US shale, along with jobs and tax revenues, I have a hard time believing the golden goose is dead, probably just wounded.

http://www.usatoday.com/story/money/business/2014/10/25/crude-prices-texas-oil-boom/17807735/


----------



## plasmasnake

rikk said:


> picked up more COS, average cost $18.10


I picked some up too, same average cost (not today of course, but I averaged in after the dip).


----------



## Edgar

Get ready for a very painful tomorrow. My bet is $10 close.


----------



## AltaRed

Edgar said:


> Get ready for a very painful tomorrow. My bet is $10 close.


The 3Q financials essentially met expectations so I doubt it (after an opening swoon). The big headline about profit being down was mostly due to effects of foreign exchange between 3Q13 and 3Q14. And rather than continue with a range of 95-100 millions barrels of production through year end, they have revised it to one number of 97 million barrels.


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## leeder

Isn't this a common issue with this company? While this company has a high distribution, almost every quarter it has reported operational issues. It would then have higher than expected capex to fix or maintain its facilities. Seems like a management team that over promises and under delivers. Now, mind you, I don't follow this name. But I've seen enough negative news from this company.


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## bmoney

Edgar said:


> Get ready for a very painful tomorrow. My bet is $10 close.


Pretty ugly quarter indeed, and I got the sense that if oil prices don't turn around in the next few quarters a dividend cut may be in the cards. Not much visibility in the MDA. I tried very hard to find a silver lining, mine train replacement is on track (good), hopefully that bodes well for 2015 production but it's too early for guidance. Syncrude as been producing well below their capacity for some time about 350k bbd capacity vs 240k bbd actual output. I see a $500 million reduction to capex projected for 2015 and hopefully we took the last real sting from forex charges as the cdn dollar finds a base here. This is a long term hold for me, best we can hope for is that they maintain a dividend while investors wait for oil prices to come around.


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## bmoney

AltaRed I would like to remain selfishly optimistic, I'm curious if you see anything I might have missed or that might be positive. 

The forex charges for me were a surprise, by my math it amounted to 16 cents per share, if we add that back earnings were 34 cents, not enough for the divy. Production was down and operating costs were slightly higher because of maintenance and the unplanned outage, no surprise there. What has me a bit worried is that realized selling price for SCO in Q3 was $102 barrel, based on todays close of $88.75 this would amount to approx 20 cents per share reduction, volumes should be a lot higher in Q4 but payout ratio will likely be over 100% even in Q4 if prices remain flat for the rest of the year.


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## doctrine

Not sure how the stock will react to results, but the foreign exchange loss is nearly equal to net income, so on an adjusted basis, the dividend was essentially covered in Q3. Looking at cash flows for 2015, it looks like they are at about a 110-120% payout (dividends+capital expenditures). They do have low debt levels, so they can weather the storm for quite a while, but yes revenue in Q4 so far is much lower than Q3 was. I think the drop in the stock price by 30% was well warranted. I'm not so certain the dividend is at risk though. They spent $2B on major capital projects in the last few years, which is more than their entire debt. They are projecting less than $0.1B on major projects next year. Perhaps if SCO drops below $80 Cdn. There could be real upside if oil goes back up to $100 though.


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## AltaRed

bmoney said:


> The forex charges for me were a surprise, by my math it amounted to 16 cents per share, if we add that back earnings were 34 cents, not enough for the divy.


It is cash flow (not earnings) you have to look at for payment of dividends, at least not in the near term of a few years. Long term earnings matter because that is where the return on equity has to come from, but on a rolling 2-5 yr basis, not so much (the issue with oil company earnings is DD&A assigned to proved, but not probable, reserves on a UOP (unit of production) basis - different discussion).

Per Doctrine, if you look at their cash flows/BOE basis in their 3Q results, and assuming dev capex falls off as stated, COS seems to have enough cash to pay dividends and/or ability to tap into lines of credit to get through a particularly bad quarter. 

Gotta remember that royalties decrease with oil prices and Nstural Gas operating cost will likely come down too as some self-correcting measures. I think they can handle $80 oil pretty well for quite awhile. Having said all that, I have not done the hard pencil work to say much more. 

I agree with Doctrine that the stock price decline has been justified, but todays prices may be a wonderful entry point. The one downside that has always existed, and as already mentioned, is COS is a one trick pony in event of a catastrophic facility event.


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## rikk

It's 9:29 ... I have a sell at market order in ... stay posted ... sold at $17.27 ... now to see if that was a good move ... or not. Hoping to get back in at a lower price. Futures are way down today. Hmmm 9:34 and at $17.30 ... I'm inclined to say ... oops


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## My Own Advisor

Curious, why not buy more rikk and hold and collect divis? (vs. sell orders?)

My approach is to buy (divi stocks in general) when/if things dip, reinvest dividends and keep repeating this cycle for as many years as possible.


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## SkyFall

@9:31 COS $17.30 up (1.17%) huhhh? oh well


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## Jon_Snow

The call for $10 COS was epic! :biggrin:


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## rikk

My Own Advisor said:


> Curious, why not buy more rikk and hold and collect divis? (vs. sell orders?) My approach is to buy (divi stocks in general) when/if things dip, reinvest dividends and keep repeating this cycle for as many years as possible.


Well there's buy more ... been there, done that, doesn't always work; there's do nothing ... been there for the last while; and there's sell at a loss, then buy back ... at 6000 shares of COS I'm going with the sell, wait and see, then buy back ... or ... sure, I was still 2/3 cash, but I was not about to buy more going forward ... it could still get very ugly is my current opinion. Worst case, I'll accept a loss ... within the COS context that is.


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## peterk

Way to scare the **** out of me guys... thought I was getting fired! :biggrin:


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## Synergy

rikk said:


> It's 9:29 ... I have a sell at market order in ... stay posted ... sold at $17.27 ... now to see if that was a good move ... or not. Hoping to get back in at a lower price. Futures are way down today. Hmmm 9:34 and at $17.30 ... I'm inclined to say ... oops


You sold again? If you're so concerned over small fluctuation in price then why not just buy the index? They are paying an 8% dividend while you wait for better days!


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## bmoney

rikk said:


> Well there's buy more ... been there, done that, doesn't always work; there's do nothing ... been there for the last while; and there's sell at a loss, then buy back ... at 6000 shares of COS I'm going with the sell, wait and see, then buy back ... or ... sure, I was still 2/3 cash, but I was not about to buy more going forward ... it could still get very ugly is my current opinion. Worst case, I'll accept a loss ... within the COS context that is.


Rikk, I think there is some relief that management announced another dividend and for the most part seems secure at current oil prices.


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## Eder

I'm not making this comment directed at any one in this thread but it is strange that buying COS was a great idea at around $20 but is a sell at around $17! In a market that has just had a v shaped recovery in spite of dire end times forecasts and the end of QE there are few deals out there, but retail wants to buy Facebook and Tesla rather than real businesses on sale.

I think many here need to read Peter Lynch's book, still the most relevant guide for us shmuck's imo.


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## rikk

I think many of you guys take this buy and hold philosophy way too seriously ... there's no significant cost to buying/selling and it takes seconds. I sold today assuming I'll buy later ... it is after all, all about me. Sometimes I make a few $$s, sometimes not. About the dividend, record date 21 November ... lots of time ...

The thing is, with "news" like ... "Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq, Saudi Arabia and Libya" ... and the going for market share thing by those guys, it just makes sense to me to take a break ...


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## My Own Advisor

Thanks Rikk, for writing back.

I guess I'm more boring as an investor, buy, hold, buy, hold and repeat that cycle.

"I think many of you guys take this buy and hold philosophy way too seriously ..."

Maybe?


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## bmoney

Call me boring, majority of my holdings are long-term. It's alluring to try and maximize returns by trading but I have fallen in this trap too many times and missed some of the biggest moves on solid picks that sometimes took a year to play out - CRM, GOOG, AAPL to name a few, I probably could have retired before 40 had I held those stocks. Rikk, 2 of the 3 countries you mentioned are in civil war. We all know there is forever a looming possibility of supply disruptions, political, production and environmental risks. A few recent stories that could turn catalysts might include record US car sales, a Republican Senate majority that is eager to pass Keystone XL, or Iran nuclear negotiations could go south - last time oil shot up to $120+ barrel on threats of Israel invading. The media is choosing to drive the story in a particular way and repeat a meme for whatever reason I don't know. Global oil production is 93 million barrels per day, OPEC believes the market is over supplied by 1 million barrels, lets agree to twice that amount or 2.15% oversupply. Oil demand is projected to increase 1.5% next year, and I may have read somewhere that 3% of output is not profitable below $90. I feel comfortable accumulating shares in energy stocks at $80 WTI as opposed to $115, eventually the story will change for the better.


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## rikk

My only focus in oil is that "going for market share" that is going on ... will there be a happy ending ... eventually I'm sure, but in the mean time, my interpretation ... COS is assuming $85 WTI going forward Q4 (just reread the small print, my bad) ... $1.00 in WTI is $0.05/per share, yes? The market share battle wages on, oil approaches $80, that would be $0.25 per share, yes? I'm asking because what do I know for sure. I've no problem with COS changing their dividend accordingly, makes perfect sense to me. I'm just sitting it out for now ... I'm not concerned, I don't see COS suddenly taking off anytime soon ... but there may be a better entry point ... tbd. 

I've traded COS on and off for some time, old reliable it's been for a long time ... no big growth, no funny business, always something going wrong, sure ... but I like it because it seems to me to be exactly what it says it is, and I appreciate that. But there is the outside world ... COS has no control over that ... 

Now, being enthusiastic, I bought in at $20 on the way down, got uneasy and got out on a $20 bounce. Got back in at $17.99, currently back out at $17.27 ... a bit underwater, but not in the big picture.

I'm ok with not being in at that initial $20 right now, which is contrary to what most here are saying.


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## Synergy

rikk said:


> but there may be a better entry point ... tbd.


There's often a better entry point just around the corner, and sometimes there's not. Unfortunately, no one to my knowledge can successfully predict the bottom. For good companies that have a decent long term outlook, My Own Advisor's approach makes a lot of sense - buy more on weakness, collect the dividend while you wait. I'll add to that, sell a little on strength - trade the ranges a little to bank some profit every now and then. What you're doing seems like a lot of work and more stressfull in my opinion. If you're over cautious about the outlook on oil, then buy a 1/4 of a position and by more if it dips further.


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## Jungle

If I had new money looking for an oil play, I'd choose a better company like suncor or husky. 
Husky might be better value right now as they just missed earnings. Suncor is really focusing on shareholder value.


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## bmoney

Well Rikk good move on your part. The bottom fell out and oil touched $75, it's going to be ugly. Just wait, analysts will rush to pile on with even more bearish calls. It smells like panic.


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## rikk

^ No idea what's going on, the only "data" I could see on line was a $0.10 cut Saudi oil, all blends ... the headlines don't include the figures so I'm guessing it's all about creating "news" when I'm guessing it's just plain business. Canadian producers have been getting by on lower than low prices for years ... nothing new here, my opinion ...


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## Nemo2

rikk said:


> ^ No idea what's going on, the only "data" I could see on line was a $0.10 cut Saudi oil, all blends ... the headlines don't include the figures so I'm guessing it's all about creating "news" when I'm guessing it's just plain business.


How about the Saudis simply adhering to an old business ploy.......cut prices so as to undermine your higher expense competitors, (with a hope of bankrupting them), then, when/if they're gone Tango Uniform, jack up your prices again to recoup?


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## rikk

Nemo2 said:


> How about the Saudis simply adhering to an old business ploy.......cut prices so as to undermine your higher expense competitors, (with a hope of bankrupting them), then, when/if they're gone Tango Uniform, jack up your prices again to recoup?


Sure, just plain old business, nothing more ... and if so, it's very enlightening to see the various spins by the press, so called analysts ... and let's not forget ... CMF members including myself :listening_headphone


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## rikk

rikk said:


> ... the only "data" I could see on line was a $0.10 cut ...


Update fwiw ... Saudi Arabia, OPEC’s largest producer, reduced the premium of Arab Light to U.S. Gulf Coast benchmarks by 45 cents a barrel to the lowest level this year. Discounts for Medium and Heavy grades were widened for a fourth month, according to Saudi Aramco, the state oil company. "Saudi Aramco have once again shown their ability to move the market,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. “It was the price cut to the U.S. Gulf which sent oil below $80. The focus for OPEC is really the U.S. market where the biggest source of new supply is coming from.”


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## Synergy

Heard this on BNN last night - "Saudis sticking it to Russia" - $75 oil

http://www.bnn.ca/Video/player.aspx?vid=483335


----------



## rikk

Synergy said:


> Heard this on BNN last night - "Saudis sticking it to Russia" - $75 oil
> 
> http://www.bnn.ca/Video/player.aspx?vid=483335


I just happened to see that when I was on the treadmill yesterday ... what an idiot I thought to myself, turned it off part way through, and put on a movie instead. It's very tempting to move some cash into my trading account but no, greedy is never a good idea. Alrighty then, up into the attic for me to install the new bathroom fan ... enjoy the day!


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## HaroldCrump

Synergy said:


> Heard this on BNN last night - "Saudis sticking it to Russia" - $75 oil


Of course...this is the 45 year old "petro-dollar" deal between the US & Saudis.
The US has held up its side of the bargain for 40+ years.
Now they are asking Saudi to adhere to their side.


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## blin10

Synergy said:


> Heard this on BNN last night - "Saudis sticking it to Russia" - $75 oil
> 
> http://www.bnn.ca/Video/player.aspx?vid=483335


sticking it to Russia won't do any good for anyone, Canada will also be hurt, as well as many American companies...


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## Synergy

blin10 said:


> sticking it to Russia won't do any good for anyone, Canada will also be hurt, as well as many American companies...


Agreed, not good for Canada. But I don't think it's going to hurt the US all that much.


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## Nemo2

Synergy said:


> But I don't think it's going to hurt the US all that much.


Not even the higher cost fracking companies?


----------



## HaroldCrump

blin10 said:


> sticking it to Russia won't do any good for anyone, Canada will also be hurt, as well as many American companies...


No, you don't understand the strategy...
America is on its way to energy independence.
The new supply created by fracking is not being exported...will not be exported due to the energy export laws.
So, it is land locked and will be used up 100%.

US imports of crude oil from Saudi Arabia has been falling.
So lowering the price to the US is not going to cause the US to import much more...maybe only marginally more.

But it will hurt higher cost producing countries such as Russia and (surprise, surprise) Venezuela.

As for Canada, the US energy lobby has already ensured that they will keep receiving Canadian oil at heavy discounts.
They have lobbied and ensured no pipelines get built in Canada, on either coast.
All proposed pipelines have been locked up in legal, environmental & regulatory battles for years perhaps decades to come.

What makes you think the US energy lobby will shy away from hurting Canadian oil producers?
They have been doing so for years...

For reference, here are the break-even prices of oil for the top producers.


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## blin10

so Saudis break even price is identical to the Russians, I really don't see the logic to lowering prices so Saudis can hurt themselves... there must be more to it


----------



## HaroldCrump

blin10 said:


> so Saudis break even price is identical to the Russians, I really don't see the logic to lowering prices so Saudis can hurt themselves... there must be more to it


I meant to say as well that this is more political than pure economical.
The fact that this has nothing to do with demand/supply mechanics should be clear by now...since there has been oversupply in the market for a while now.
It does not make any sense from pure economic perspective to not cut production (after all, that is what the OPEC cartel is meant for).
Therefore, this is more geo-politically driven than economically driven.

As I mentioned above, the US & Saudi are in the "petro-dollar" alliance.
They are in a quid pro quo deal to serve each others' interests as needed.

Saudi will regulate the price via OPEC and supply cheap oil to the US, priced in US dollars.
Thus ensuring the dominant position of the USD as the global reserve currency aka "king dollar".

In return, the US will protect the House of Saud from both internal as well as external aggression (Iran, etc.).

This time around, the US is asking the Saudis to take a hit on the price of oil in order to further crush Russia.
As we have seen, the Ruble has devalued significantly in the last 6 months.
Crushing the price of crude oil will further destroy it.

So far, the Russian administration has still been able to borrow from international debt market to keep up the illusion of a social welfare state within Russia.
However, this will not continue for long.
S&P etc. have already downgraded Russia to junk status.

With a rapidly depreciating currency and inability to borrow from international money markets, there will be massive inflation within Russia (already happening).
Crushing the price of oil & gas is simply the next step.

The desired end goal of the US is to reduce Russian economic status to that of Cyprus & Greece.

Gee, some of us would have loved to be a fly on the fall at the previous OPEC meeting, or even the next one :biggrin:


----------



## supperfly17

HaroldCrump said:


> I meant to say as well that this is more political than pure economical.
> The fact that this has nothing to do with demand/supply mechanics should be clear by now...since there has been oversupply in the market for a while now.
> It does not make any sense from pure economic perspective to not cut production (after all, that is what the OPEC cartel is meant for).
> Therefore, this is more geo-politically driven than economically driven.
> 
> As I mentioned above, the US & Saudi are in the "petro-dollar" alliance.
> They are in a quid pro quo deal to serve each others' interests as needed.
> 
> Saudi will regulate the price via OPEC and supply cheap oil to the US, priced in US dollars.
> Thus ensuring the dominant position of the USD as the global reserve currency aka "king dollar".
> 
> In return, the US will protect the House of Saud from both internal as well as external aggression (Iran, etc.).
> 
> This time around, the US is asking the Saudis to take a hit on the price of oil in order to further crush Russia.
> As we have seen, the Ruble has devalued significantly in the last 6 months.
> Crushing the price of crude oil will further destroy it.
> 
> So far, the Russian administration has still been able to borrow from international debt market to keep up the illusion of a social welfare state within Russia.
> However, this will not continue for long.
> S&P etc. have already downgraded Russia to junk status.
> 
> With a rapidly depreciating currency and inability to borrow from international money markets, there will be massive inflation within Russia (already happening).
> Crushing the price of oil & gas is simply the next step.
> 
> The desired end goal of the US is to reduce Russian economic status to that of Cyprus & Greece.
> 
> Gee, some of us would have loved to be a fly on the fall at the previous OPEC meeting, or even the next one :biggrin:




Question is how long will they keep this up, how low will they let the price of oil drop? Would certainly help to know when to take a position in some of these oil stocks.


----------



## GOB

Very interesting, Harold.


----------



## doctrine

I think the truth is that there's just too much oil. Saudi's are pumping as much as ever, but the US pumped more oil than they did last month. And Russia continues to pump near record amounts of oil - 10.6 million barrels a day in October. Plus Iran, Libya, Iraq all looking to push oil. And now there's a price war. Oil is now looking to find it's true market value worldwide, and so far no one is seriously blinking. Some minor plans to reduce some capital expenditures, but that's not going to move the market. Down we go. I really hope that capital isn't as dumb as it was in gold companies, or there is going to be serious capital dumped down the drain. On the other hand, it's great for consumer stocks!


----------



## blin10

"The desired end goal of the US is to reduce Russian economic status to that of Cyprus & Greece."

that will never happen... a lot of oil projects around the world including saudis needs mid 70's oil, if not they will stop and oil will go up eventually.. don't forget russia has no debt, holds a ton of usd dollars, started to trade with asia in rubles/yuan, formed IMF like mirror bank for funding, etc, etc... 

"As for Canada, the US energy lobby has already ensured that they will keep receiving Canadian oil at heavy discounts.
They have lobbied and ensured no pipelines get built in Canada, on either coast."

It will hurt Canada more then Russia, who does Canada export to? mostly States... Russia on the other hand supplies most of Europe/Asia... USA is trying to pay back Russia for shutting them down in Iran, then Syria, now staged Ukraine crises are not working out... states loosing world influence and they know it, they are not #1 world economy already (China is)


----------



## supperfly17

blin10 said:


> "The desired end goal of the US is to reduce Russian economic status to that of Cyprus & Greece."
> 
> that will never happen... a lot of oil projects around the world including saudis needs mid 70's oil, if not they will stop and oil will go up eventually.. don't forget russia has no debt, holds a ton of usd dollars, started to trade with asia in rubles/yuan, formed IMF like mirror bank for funding, etc, etc...
> 
> "As for Canada, the US energy lobby has already ensured that they will keep receiving Canadian oil at heavy discounts.
> They have lobbied and ensured no pipelines get built in Canada, on either coast."
> 
> It will hurt Canada more then Russia, who does Canada export to? mostly States... Russia on the other hand supplies most of Europe/Asia... USA is trying to pay back Russia for shutting them down in Iran, then Syria, now staged Ukraine crises are not working out... states loosing world influence and they know it, they are not #1 world economy already (China is)


Totally disagree. Russia is a s***hole, and it is way worse now. My uncle owns 2 restaurants in two major Russian cities. He also lives there. There you have the real 99.5% and 0.5%. You will never know for real if they are in debt, noone knows. 

On a side note, the progression of 3-d printers will significantly hurt China's economy.


----------



## Synergy

Nemo2 said:


> Not even the higher cost fracking companies?


Sure, some US companies may take it on chin as well. But I was referring to the overall impact on the economy (CAN vs USA). I just feel that Canadians have more to lose here.


----------



## blin10

disagree, i liked Moscow and Saint Peterburg more then most European cities and Toronto. It depends what you call a shithole, outside major cities is always worse then in the center... bathers and finch is a shithole too, outside of new york and driving from new york to Toronto is a major shithole, even in Rome center/outside is a shithole, etc, etc.. 



supperfly17 said:


> Totally disagree. Russia is a s***hole, and it is way worse now. My uncle owns 2 restaurants in two major Russian cities. He also lives there. There you have the real 99.5% and 0.5%. You will never know for real if they are in debt, noone knows.
> 
> On a side note, the progression of 3-d printers will significantly hurt China's economy.


----------



## supperfly17

blin10 said:


> disagree, i liked Moscow and Saint Peterburg more then most European cities and Toronto. It depends what you call a shithole, outside major cities is always worse then in the center... bathers and finch is a shithole too, outside of new york and driving from new york to Toronto is a major shithole, etc, etc..


Sorry what I was referring to was the lack of people with money. Spending is way down, restaurants are dead compared to last year, or even 6 months ago. Many, many people on welfare, for whatever it is, is not much. He can't consider selling them because noone will buy them, etc etc


----------



## HaroldCrump

blin10 said:


> don't forget russia has no debt


Eh, what?
Russia has massive debt.










Also, remember that Russian state-backed corporations hold an additional $115B of debt, not included in the above.
These corporations have deep links within the govt. and the Putin administration will have to bail them out regardless of what happens.



> holds a ton of usd dollars


That is history.
Russia has been dumping massive amounts of USD since April 2013.
Just this week, they have drained their reserves by a further $9B to try and prop up the Ruble.
They are starting to run low on Euros as well.

They have one and only one hedge at this time - gold.



> started to trade with asia in rubles/yuan


Ha, after what's been happening, which country will be crazy enough to trade in Rubles?
As for Yuan, if Russia has been holding its reserves in Yuan, they are being stupid.
The Yuan is pegged to the USD.
The Yuan is not - and probably will not be any time soon - a reserve currency.

The only marginal hope they could have is the IMF adding the Yuan to the SDR.
But it will not appreciate the Yuan significantly.



> formed IMF like mirror bank for funding


Worth about $50B - a drop in the bucket of global trade.



> that will never happen... a lot of oil projects around the world including saudis needs mid 70's oil, if not they will stop and oil will go up eventually..


Yes, no doubt.
However, this is a short term move.

The idea is to bring Russia to its knees.
The only question is how long can Russia resist this onslaught on its economy.

The sanctions imposed thus far are only nominal & perfunctory.
They have had no effect whatsoever.
So something more was clearly needed, and perhaps this is it.



> It will hurt Canada more then Russia, who does Canada export to? mostly States


As I said, they couldn't give a flying rat's arse about the effect on Canada.



> Russia on the other hand supplies most of Europe/Asia... USA is trying to pay back Russia for shutting them down in Iran, then Syria, now staged Ukraine crises are not working out... states loosing world influence and they know it


Sure, but that would not prevent them from trying, will it?


----------



## blin10

supperfly17 said:


> Sorry what I was referring to was the lack of people with money. Spending is way down, restaurants are dead compared to last year, or even 6 months ago. Many, many people on welfare, for whatever it is, is not much. He can't consider selling them because noone will buy them, etc etc


ah i see, fair enough


----------



## blin10

"Eh, what?
Russia has massive debt."

-let's compare it to USA debt, 18 trillion or something like that?

"The idea is to bring Russia to its knees.
The only question is how long can Russia resist this onslaught on its economy."

-Europe is suffering way more then Russia with all these sanctions, major player Germany is having negative growth now (from positive forecast) just take a look at Deutsche Bank NYSE : DB... other countries in EU are having major issues from farms to industrial investments. Every time USA tries to do something to Russia, of course it will hurt their economy, but I think Europeans will get hit harder, it's like a connected chain, it will pull everyone down.

"Sure, but that would not prevent them from trying, will it? "

-true but it will hurt them in Geo-politics in the long term... it's like a wolf who is trying hard to catch prey but can't, so the other wolfs know he's not as strong as he looks...


----------



## HaroldCrump

blin10 said:


> -let's compare it to USA debt, 18 trillion or something like that?


Of course - but it aint' the US dollar that has crashed 20% in 3 months (see chart below).
US yields are at all time lows.
The world is betting on the USD at this time.













> -Europe is suffering way more then Russia with all these sanctions, major player Germany is having negative growth now (from positive forecast)


Of course, that is why Germany is not liking the Americans or the Brits at the moment.
That look tells the whole story - 










Not to mention that Obama gave authorization to hack her phone ;o)



> true but it will hurt them in Geo-politics in the long term... it's like a wolf who is trying hard to catch prey but can't, so the other wolfs know he's not as strong as he looks...


At this time, the US is clearly winning this battle.
They are dragging down Europe (and to a smaller extent, Canada) into this manipulation.

However, they have thrown a bone to Europe, let's keep that in mind too.
By ending its own Q/E, the US Fed is allowing the ECB to do its version of the Q/E.
The US is allowing the USD to get stronger and weaken the Euro - this is exactly what the ECB wants.
However, Germany won't let the ECB engage in direct, overt Q/E.
Therefore, this solution allows the ECB to weaken the Euro without having to do anything (or convey the perception of not doing anything).

Who is getting screwed in this whole game - Russia.
At this time, Russia has nowhere to run, nowhere to hide - except Gold.
And that is what they are doing - they have been buying large quantities of gold.
But it can't go on because they are running out of foreign reserves.


----------



## humble_pie

in the photo, isn't chancellor merkel supposed to be telling the british prime minister that she doesn't like what looks to be britain's emerging new anti-immigration politic?

i'm reading that GB might exit the european market over this contentious issue.


----------



## HaroldCrump

humble_pie said:


> in the photo, isn't chancellor merkel supposed to be telling the british prime minister that she doesn't like what looks to be britain's emerging new anti-immigration politic?


No, that was this photo :biggrin:










Secondly, Frau Merkel can sure talk.
She has forgotten that in her first term, she took the same stance.

_*Chancellor Merkel says German multiculturalism has 'utterly failed'*_

The fundamental contentions are the same - unrestricted immigration of unskilled workers, and people of a certain umm...religious persuasion.



> i'm reading that GB might exit the european market over this contentious issue.


Ha, gotta love Britain's love/hate relationship with the EU.
I have stopped counting how many times Britain has joined and quit various European common markets, trade pacts, currency peg pacts, etc.
Has been going on since the 1960s.


----------



## blin10

HaroldCrump I disagree with you in few areas, but we can go on forever quoting each other and trying to prove something... you got your views i got mine, I'll leave it at that...


----------



## HaroldCrump

Yup, no worries.
The difference could also be a matter of timing i.e. I am speaking of the short term geo-politics, while you are thinking of L/T demand for oil.


----------



## blin10

HaroldCrump said:


> Yup, no worries.
> The difference could also be a matter of timing i.e. I am speaking of the short term geo-politics, while you are thinking of L/T demand for oil.


yap, lets get back to COS, its at 16.4 now, tempted to buy some


----------



## newfoundlander61

Looking to place my first trade in a stock within my TFSA. Is the current share price considered a good entry point, of course its impossible to time the market but looking for opinions on the current price as of fridays close of $17.61


----------



## AltaRed

newfoundlander61 said:


> Looking to place my first trade in a stock within my TFSA. Is the current share price considered a good entry point, of course its impossible to time the market but looking for opinions on the current price as of fridays close of $17.61


I think anything in the $17 range is a good buy. The upside is easily a $22 stock if oil prices return back to $100. That would be 30% capital growth while also collecting a healthy dividend. Ultimately though, any growth in enterprise value and dividend is dependent on oil price growth. Will oil prices stagnate in the $100-130 range for years and years, or will they grow somewhat related to global inflation and GDP growth?

The short term downside is whether the current dividend is sustainable through a period of low oil prices. To hear COS tell it, they say yes...for several quarters. The key to long term dividend sustainability is maintenance of a very strong balance sheet.


----------



## Pluto

AltaRed said:


> The short term downside is whether the current dividend is sustainable through a period of low oil prices. To hear COS tell it, they say yes...for several quarters. The key to long term dividend sustainability is maintenance of a very strong balance sheet.


Several quarters is 3 quarters; doesn't comfort me. I think I'd rather wait longer, or buy a different oil company. but I'm not really knowledgeable about oil .... so I find this thread educational.


----------



## AltaRed

Pluto said:


> Several quarters is 3 quarters; doesn't comfort me. I think I'd rather wait longer, or buy a different oil company. but I'm not really knowledgeable about oil .... so I find this thread educational.


Since a company cannot make a commitment to a specific number of quarters, investors should use such comments to look at the financials themselves, and the latest MD&A for the company's forward year forecast, to see what the cash flows mould be under various scenarios, and the condition of the balance sheet. I suspect a few analysts* following this stock have already done that homework

FWIW, I agree there are other oil alternatives out there that provide similar opportunities, provided investors realize balance sheet quality is key to a healthy survival in periods of reduced oil prices.

Added later:

* Motley Fool is not one of them since they only looked at the past 6-9 months and trended that information forward. They did not even look at forecasted huge reductions in dev capex spend as capital projects wind up nor production forecasts. They didn't have the energy to even look at COS material on the COS website. Beware analysts who are extremely lazy or potentially incompetent. http://www.fool.ca/2014/10/23/why-c...s-dividend-is-at-risk-1-stock-to-buy-instead/


----------



## Butters

This ones been on BNN several times, the last guy was a technical analyst and he didn't like it, it showed that it kept hitting $20 and support kept bringing it back up... now that it's broke that support line, who knows where it will go


----------



## Eder

Alta Red... I agree 100%. Moronic analysis like most of the fool website is only there to entice dumb money to spend more on equally diluted insight that is not given away. Syncrude is sitting on $40000000000 worth of proven crude (thats more zero's than usually necessary to describe commodity assets), I don't think the fools staff own calculators.


----------



## My Own Advisor

Happy to buy more in $17 range. Very happy. Just need to find more money to do so! 

When (not if) oil becomes $100 per barrel again, COS and CPG and SU and COP shareholders will be laughing at the bank.


----------



## GOB

I don't understand how Motley Fool stays in business and still gets so many headlines. It's such a trashy site.


----------



## My Own Advisor

I don't read that stuff (Motley Fool). Stock porn.


----------



## CPA Candidate

I would consider COS to one of the least attractive oils because it is oil sands without downstream (refining) integration, unlike Suncor, and completely unhedged. Their debt in owed in US dollars, so it is getting larger each time CDN $ drops. 

The analyst consensus on Morningstar (13 analysts) is sell.

The total liabilities / equity ratio of 1.15 is comparable to Long Run (1.17).


----------



## bmoney

CPA, I'm inclined to agree but much of the move in SU has been made already. SU is up about 15% off the lows whereas COS is bouncing around the bottom as oil has yet to recover, COS will give you more upside as prices recover and dividends to boot but with more risk. 

Based on the latest comments made today by the Saudi's it seems there will be a bit more pain before things get better. A quick V shaped recovery is looking less in the cards, as it would only vindicate CEOs in the oil industry that currently have no intention to curtail production. I don't think we'll see OPEC step in to support the price in a meaningful way until the industry comes around to respect the laws of supply and demand. I do expect demand to increase moving forward so it will take 6-12 months to self correct provided the producers don't shoot themselves in the foot. Then again, political risk is always around the corner for better or worse, the price of oil could move upwards for any number of reasons.


----------



## Eclectic12

[ deleted as original comment seems to have been deleted ]


----------



## rikk

Eclectic12 said:


> [ deleted as original comment seems to have been deleted ]


Deleted because OT ... done, and done ... as Serana would say.


----------



## Siciliano698

I'll add this to my tfsa if it drops to 15, I'm waiting to see if Crude hits my 68$ bottom/low target.


----------



## Chris L

16.45 close. Going lower on oil news tomorrow?


----------



## Gabs

Chris L said:


> 16.45 close. Going lower on oil news tomorrow?


Yeah most of the oil stocks were down today on the speculation that OPEC isn't going to cut output and COS isn't hedged so that would be bad news. We'll find out for sure tomorrow.


----------



## doctrine

If OPEC doesn't cut, I wouldn't be surprised to see WTI below $70 and Brent there not long after. Everyone is producing more oil. This waiting game could easily go on for another year before someone blinks.


----------



## Gabs

doctrine said:


> If OPEC doesn't cut, I wouldn't be surprised to see WTI below $70 and Brent there not long after. Everyone is producing more oil. This waiting game could easily go on for another year before someone blinks.


Sidenote Doctrine I've learnt a lot from your blog I hope you keep writing in future


----------



## fatcat

is there a time for set for the release of opec's decision tomorrow ?


----------



## My Own Advisor

I don't know but it could be a great time to buy O&G stocks after the bad news!


----------



## PuckiTwo

fatcat said:


> is there a time for set for the release of opec's decision tomorrow ?


according to the "tentative program" the press conference is set for 16:00 h European time. Meeting is as usual in Vienna, means 16:00 = 10:00 h ontario/quebec time. 6 hours backards .www.opec.org/opec_web/en/311.htm. Means just after the market opened. Depends also how fast the press will be to get it online. Saudi oil minister has said they are not fond of cutting.Link gives you the tentative schedule.


----------



## Fraser19

I am have been pretty amazed to see it drop this far this fast. 
I am still pretty new to the stock thing, what kind of bottom do you think this stock could have, also is there anything that could seriously threaten the company lot term future?


----------



## AltaRed

Fraser19 said:


> I am have been pretty amazed to see it drop this far this fast.
> I am still pretty new to the stock thing, what kind of bottom do you think this stock could have, also is there anything that could seriously threaten the company lot term future?


I am guessing a dividend cut (eventually) is baked into the current price. Certainly can go lower if dividend was eventually cut severely but at some point it would trade at/below book value (circa $10) and that would trigger a takeout offer by a major at about a 50% premium to that, perhaps one of the folks currently adjacent to them (CNQ, RDS), or with a current interest in Syncrude (IMO, XOM, SU). 

There are no long term issues for this company barring an explosion that wipes out their facilities (one trick pony). OPEC countries cannot last as long at low prices as COS can.


----------



## Fraser19

That's good to hear.
I have kept telling myself at 14.00 Ill go in. But for every other thing I have bought into in the last two months it has all dropped fairly far past my buy in point, with the exception of LRE. I would love to pick it up at 12.00 but I don't know if I would be able to watch it go that low before already going in.


----------



## AltaRed

Fraser19 said:


> I would love to pick it up at 12.00 but I don't know if I would be able to watch it go that low before already going in.


It is probably because you are looking near term. If you bought at 14 and it goes to 12, it just means that you file that away for a few years and when oil prices return to $100 in a year or so (or two), this thing will throw off cash that will make your head spin....and a stock price and dividend to go with it. Back to $25 or so, perhaps more. I always look to buy a stock based on a long term hold, i.e. not less than 5 years, and preferably 10-20 years.


----------



## Fraser19

Yeah I hear you. All of my buys at this time and for probably the next decade will be long term. This is just my first time in investing watching things drop like this. It is very exciting.
I don't view any of the recent picks in the red as a loss, just a gain that is waiting to be made.


----------



## supperfly17

Fraser19 said:


> Yeah I hear you. All of my buys at this time and for probably the next decade will be long term. This is just my first time in investing watching things drop like this. It is very exciting.
> I don't view any of the recent picks in the red as a loss, just a gain that is waiting to be made.


Yes, but you are assuming that oil prices will climb back up. What if they dont? What if they stay 70-80 for the next 5,10,15 years.


----------



## Chris L

supperfly17 said:


> Yes, but you are assuming that oil prices will climb back up. What if they dont? What if they stay 70-80 for the next 5,10,15 years.


That's possible, but is it probable?

Perhaps some form of alternative energy mixed in with the increased supply? The world is probably going to use up all the oil it has access to before quitting...who knows.


----------



## Fraser19

Chris L said:


> That's possible, but is it probable?
> 
> Perhaps some form of alternative energy mixed in with the increased supply? The world is probably going to use up all the oil it has access to before quitting...who knows.


Well if oil stays low for the next 15 years and I get in today at a major discount and drip I would assume that I would have some pretty good gains. I can understand oil staying low for a year, maybe two but what could keep it low for 15 years? It seems to me that earth is pretty dependent on oil.


----------



## blin10

that's crazy whats happening... cos touched 15$ wow


----------



## Toronto.gal

Edgar wasn't so delirious last month after all. Just off by 33% atm [from his $10 price prediction].


----------



## AltaRed

supperfly17 said:


> Yes, but you are assuming that oil prices will climb back up. What if they dont? What if they stay 70-80 for the next 5,10,15 years.


It isn't going to happen near term. Too many producing countries require circa $100 oil just to stay in business. Ultimately though, those countries, e.g. Nigeria, Venezuela and the like are hooped if/when fusion, for example, takes over. Oil will ultimately fall in importance but I don't see it happening for many, many years yet.


----------



## Pluto

Looking at historical prices, the cartel managed to push prices during the 1970's and it peaked around 1980. Of course the higher prices created an exploration boom, and over supply, and a crash. In the 80's the Saudi's were under producing (relative to their opec quota) for a while to keep the price propped up. Some of their members were cheating on quotas, and they wouldn't stop cheating. The Saudi's gave up being the swing procucer, opend the taps, and the price plunged. 

It took 20 years for the nominal price of oil to match 1980 prices. 

I have no idea what the future holds, but any assumption that oil has to recover its price soon, is a risky one. Even after oil plunged from 140 back in 2008, there were flawed predictions it would reach 200 by 2010-11. It looks to me like this is a replay of the 1970's to 1999. The high oil prices in the last 10 years really goosed exploration, like it did in the 70's, and we are in for lengthy relief at the gas pump. 

I know next to nothing about COS, but the tidbits I have heard isn't making me optimistic about a near term recovery in the stock price, and I'm not really confident about it being able to maintain its dividend during a lengthy replay of history.


----------



## GOB

I'm not making any predictions for $100, $150 or $200 anytime soon but my gut tells me $60-70 is simply too low to be maintained for long. Cost of production is just so much higher than it used to be. The only scenario where I see this happening is if we undergo a period of deflation where the price of everything drops including wages etc. This is entirely possible but I wouldn't say it's probable. 

My guess is between $85-100 in a year's time.


----------



## bmoney

No surprise today, get ready to hold for a few years. It's going to take some time to work out these issues. 

Keep in mind, today's supply followed the demand and price spikes from 4 years ago. Demand has not fallen, the market is a bit over-supplied at the moment outside of OPEC, there isn't any coordination among producers. Traders work in real-time and companies deploy capital based on strategic planning and investment over years. The traders are shorting and profiting in the short-term, don't worry too much supply will come off line, the marginal barrel costs alot more than $70, that means eventually this roller coaster will be going up when producers respond to the new price. OPEC is disciplining the american producers who are arbitrarly expanding production through lots of debt & leverage. This price action is just a reminder to everyone of the way economics works.


----------



## gibor365

just wondering how much it cost for Saudia to produce 1 barrel of oil?


----------



## SkyFall

Bought some yesterday just in case that OPEC would announce a good news even tho deep down I knew it wouldnt happen. Will buy more if it slide further more.


----------



## HaroldCrump

gibor said:


> just wondering how much it cost for Saudia to produce 1 barrel of oil?


I had posted this chart on the previous page.


----------



## bmoney

Curious when the sabre rattling begins, lots of countries will be in dire straights soon. 

Welcome back to 2005 COS holders.


----------



## Toronto.gal

^ I don't think it will take as long as some are predicting.


----------



## Causalien

Contemplating buying.

Last time Saudi managed 6 months of over supplying.


----------



## Nemo2

Just prior to market opening this morning, and before we went out for a couple hours, threw in (what we thought was) a low ball bid @$15.40...(the hope that we wouldn't get them was stronger than the hope we would)......you know the rest...


----------



## newfoundlander61

I posted here earlier in the week about buying in at$17.00, glad I waited look's even better for a buy shortly.


----------



## fatcat

i only have suncor and wanted to wait until this announcement before buying more (or anything else since it looks like a time to shop)
glad i did ... wow, what a drop
i agree with those who think that demand is still there, this will be temporary
cnr is up nicely so people apparently think there will be plenty of oil to ship via rail


----------



## 1980z28

The yield is ok for now


----------



## peterk

Just bought some at 15.34.

I think salaries are going to decrease in the oil sands and boost profits (much to my chagrin), and Syncrude will benefit greatly from it.

Suncor and Shell have axed their employee retention programs (about ~15% of employee compensation) and are offering up Fly-in-fly-out instead.

Syncrude has said that they will not be introducing FIFO, and they will also be moving their retention program to 1-year contracts starting 2015. Likely to be scaled back in dollars (currently 20k/year/employee) as the other operators reduce their programs. Contractors and operators are not paying LOA like they used to either.

Overall I feel there is downward pressure on salaries in the oil sands as more young people head west desperate for work, and more companies seduce 20-somethings with the idea of FIFO and $30/hour instead of living in Fort mac for $60/hour. It seems the wild west days of being able to show up in the oil patch and earn 100k as an apprentice and 200k after 5 years are coming to a close, or at least more difficult.

Combined with low oil and cost cutting measures, I think oil sands companies will be poised for some big gains if/when oil bounces back to $100 and the companies are a lot leaner than they were.


----------



## Siciliano698

Siciliano698 said:


> I'll add this to my tfsa if it drops to 15, I'm waiting to see if Crude hits my 68$ bottom/low target.



I like the price here for a rebound only on cos if it doesnt rebound I see more down pressure I'll wait it out for now....

I could say we are headed towards a 45$ a Barrel now....


----------



## GOB

Good points peterk. There's so much excess in the oil sector and there really doesn't need to be.


----------



## Causalien

Briefly looked at financials. Dividend unsustainable and it has been unsustainable for 9 months now. Prediction of 6 months of saudi cheap oil means I'll revisit this in June.


----------



## My Own Advisor

I see a cut coming. Thoughts on a 50% haircut?

I meant to add, doesn't matter...I will be buying more at some point. Hopefully it stays low until "TFSA season"!


----------



## bmoney

Probably suspend the dividend at some point, don't think that's a surprise.

The level of panic is quite entertaining, down another 6.5% today. At this pace oil is going to zero by the end of the month lol


----------



## Fraser19

bmoney said:


> Probably suspend the dividend at some point, don't think that's a surprise.
> 
> The level of panic is quite entertaining, down another 6.5% today. At this pace oil is going to zero by the end of the month lol


I am now hoping to see COS in the $10.00 range.


----------



## Nemo2

bmoney said:


> At this pace oil is going to zero by the end of the month lol


Wait until the gas stations pay you to fill up. :biggrin:


----------



## Siciliano698

we will have free GOLD and OIL at this rate


----------



## Causalien

Technically, the cos profit is mainly down due to currency exchange. Their Revenue and expenses are mostly inline. Their debt though seem to be based in USD. Not a smart move.

So in the next six months, the biggest factor is currency exchange rate and I think we will know about a 50% haircut in dividend within this 6 months. US is stabilizing and canadian housing is in stratosphere. So I predict the currency exchange will not revert.


----------



## bmoney

Causalien said:


> Technically, the cos profit is mainly down due to currency exchange. Their Revenue and expenses are mostly inline. Their debt though seem to be based in USD. Not a smart move.
> 
> So in the next six months, the biggest factor is currency exchange rate and I think we will know about a 50% haircut in dividend within this 6 months. US is stabilizing and canadian housing is in stratosphere. So I predict the currency exchange will not revert.


I think you're bang on. COS probably issued that debt when CDN was above parity - dumb move but they're oil guys and probably overly bullish. The forex losses are superficial and CDN is looking like it's found a comfortable range so hopefully next quarter is not impacted by more forex charges. I'm hoping they curtail investment, bring down costs and finalize their major projects by Q1, hopefully we see results from those investments.


----------



## blin10

was thinking to pick up few shares of cos, but i'm thinking hse/bte/cpg/cve is a better option at this point hmmm


----------



## Fraser19

blin10 said:


> was thinking to pick up few shares of cos, but i'm thinking hse/bte/cpg/cve is a better option at this point hmmm


I have been thinking that as well. Cenovus has a pretty attractive entry price right now, and there is the opportunity for it to go even lower as I assume most oil stocks will. I was originally attracted to COS for a less expensive way to start DRIPing but that can be done with several other companies now.


----------



## My Own Advisor

I think so fraser19, I'm looking at HSE, BTE, SU, CPG, CVE, CNQ and a couple of more for purchases early in 2015.


----------



## Fraser19

My Own Advisor said:


> I think so fraser19, I'm looking at HSE, BTE, SU, CPG, CVE, CNQ and a couple of more for purchases early in 2015.


Yeah, for example if CVE gets into the 17-20 dollar range, its a no brainier, although I would assume at that point COS would be dirt cheap. So might as well have both, but a larger position with CVE.

Just my take on it at the time. Either way I can't see anything permanently tragic happening to COS but I am starting to see more upside to other stock.


----------



## bmoney

Fraser19 said:


> Yeah, for example if CVE gets into the 17-20 dollar range, its a no brainier, although I would assume at that point COS would be dirt cheap. So might as well have both, but a larger position with CVE.
> 
> Just my take on it at the time. Either way I can't see anything permanently tragic happening to COS but I am starting to see more upside to other stock.


COS is a pure play and riskier, if you're looking to dip a toe in now the integrated companies like SU are better/safer. Personally I don't mind holding a few years when oil prices rebound COS will be spinning off cash and dividends+equity.


----------



## Fraser19

bmoney said:


> COS is a pure play and riskier, if you're looking to dip a toe in now the integrated companies like SU are better/safer. Personally I don't mind holding a few years when oil prices rebound COS will be spinning off cash and dividends+equity.


Ok, so lets take my situation.
I have a investable timeline of 30+ years. Both of these companies are very appealing to me. 
What I like about COS is the dividend has been generous for a long time. COS has the opportunity for good capital gains right now and probably for the next while due to the depressed price. A bonus is that COS appears to always raise the dividend as earning increase. They also reduce the dividend as earnings fall.
Another bonus is the lower price and higher dividend allows me to accumulate shares via DRIP much faster, and when share prices are down at a time like this there is always the chance of being able to snag a few extra shares at a discount before the dividend gets adjusted.

What I like about CVE is they appear to be more stable and also provide a good dividend although not as much as COS. But they do seem to have a good business model that is less vulnerable. But the also don't have as much 

What would you do? *Also I would like to point out that I am not going to make a buy based on what you or anyone has to say, at this time I am waiting for a while to see how things play out in the market.*

Both look like something to have, but deciding on what one is better for a 30 year run is hard to tell, well impossible.

However considering these are the problems I have in my life today, I should just be grateful for where I am at in life.


----------



## fatcat

My Own Advisor said:


> I think so fraser19, I'm looking at HSE, BTE, SU, CPG, CVE, CNQ and a couple of more for purchases early in 2015.


all pretty well correlated over the last year

View attachment 2609


----------



## Edgar

I could be wrong, but I believe COS has two of the oldest oil sand sites in the Oil Sands, and those are typically more profitable/less costly per barrel. Full disclosure, this is based on a 2010 European international energy review and their facts may be misinformed/I may have misread, but that is my understanding


----------



## AltaRed

Edgar said:


> I could be wrong, but I believe COS has two of the oldest oil sand sites in the Oil Sands, and those are typically more profitable/less costly per barrel. Full disclosure, this is based on a 2010 European international energy review and their facts may be misinformed/I may have misread, but that is my understanding


COS has one of the best/rich ore sites from a mining perspective and most of their legacy mining facilities have been replaced/upgraded over the years. But they also have legacy processing and upgrading assets that require more maintenance capex and in some cases, less operating efficiency than the newer facilities by Shell et al. It is probably a 'wash' relative to some adjacent producers. I understand COS is going to provide guidance on their 2015 capital plans this coming week. Should be an interesting dicussion given current events.


----------



## Fraser19

Well COS is continuing to slide at a entertaining rate. Looks like my hope of 10.00/share may be in the near future.
I keep Google finance open on the stocks I am watching in on my internet browser and the tab shows the share price. It sure is getting my attention with this down hill run.
Any ideas what the dividend cut may look like and when you guys think it will happen?


----------



## bmoney

COS down another 6.5%, and oil is up 3% - this is a comedy show. We are back to 2004, WTI traded at $35-$50 that year.


----------



## rikk

bmoney said:


> COS down another 6.5%, and oil is up 3% - this is a comedy show. ...


And what's really funny is I have a $120K GIC maturing 10 December ... what to do, or not do ... I'm thinking just put it back under the mattress and go have a beer ...


----------



## CPA Candidate

bmoney said:


> COS down another 6.5%, and oil is up 3% - this is a comedy show. We are back to 2004, WTI traded at $35-$50 that year.


I also noted that oils are getting pounded today despite the rise in crude. We are seeing a fairly strong panic to the exits right now.


----------



## 1980z28

Nice Christmas GIC

I have appox 2500 shares of FTS 

You can Purchase a couple of shares for yourself,or dollar cost down on any oil you have as I will also do


----------



## bmoney

CPA Candidate said:


> I also noted that oils are getting pounded today despite the rise in crude. We are seeing a fairly strong panic to the exits right now.


This is what happens when the bid simply disappears, so much for algos creating liquidity. We have been crashing through levels with a speed that reminds me of 2000/2008. This is what panic looks like.


----------



## Chris L

People are reading headlines and reacting. Oil up, stocks down. Not adding up here. Too much saying oil could go to $35 a barrel. Really? Makes no sense, how does a company profit at that rate...it doesn't and if it doesn't oil goes back up. Duh, or no duh?


----------



## Canuck

ugh this is brutal. Wonder how many of these will end up cutting or completely suspending their divvy

IPL
PPL
ENB
ENF
TRP 
VSN
KEY

thinking these ones are less safe

GEI
ALA
BTE
TOG
WCP
SGY - for sure
CPG


----------



## banjopete

Just keep looking at all the combustion engines that surround us and do a quick web search for petroleum based products and remind yourself that oil has value, oil has value.


----------



## bmoney

WTI now up nearly 4%, COS down 8% wtf? Did something happen that we just don't know about?


----------



## Synergy

Decided to take a tax loss sale on this name, mind you I booked more profits on this name earlier in the year so I'm actually in the green for the year. Would like to add this name back come early 2015.


----------



## My Own Advisor

Down over 8% today.

WOW.

Time to back up the truck on this yet? Will we will see single digits? I'm guessing yes.


----------



## Chris L

My Own Advisor said:


> Down over 8% today.
> 
> WOW.
> 
> Time to back up the truck on this yet? Will we will see single digits? I'm guessing yes.


Does the price of oil not matter? It's up 5% today.


----------



## My Own Advisor

A good buy signal, no? Oil up, stock way down. 

Currently saving for more COS, BTE, SU, CNQ, I just hope the prices go lower....


----------



## Jungle

Down -30% since oct 2011, but kept the cash dividends. 

ill hold and see what happens. Last time I sold a stock in panic it doubled a few years later. Lol


----------



## Fraser19

My Own Advisor said:


> Down over 8% today.
> 
> WOW.
> 
> Time to back up the truck on this yet? Will we will see single digits? I'm guessing yes.


Yup, watching it slide today I am not holding off for single digest too. Hopefully oil will creep up slowly and COS will crash down like turtle mountain for the next few weeks.


----------



## AltaRed

My Own Advisor said:


> Time to back up the truck on this yet? Will we will see single digits? I'm guessing yes.


Book value is circa $10. That would be an easy acquisition for someone wanting in the oil sands but still knocking at the edges. I am thinking Total specfically given that Joslyn was recently shelved (May) due to poor economics. Also a way for IMO/XOM to take majority control of Syncrude or for Suncor to be pre-dominant.


----------



## Gumball

Canuck - 85% of IPL business is on take or pay, PPL a little less, these are safe pipelines. They also transport Nat Gas and condensates, so no need to hit the panic button just yet.

Also keep in mind there are 16.5 million new vehicles sold in the USA this year, another 3 mil sold in Canada, and guess what 99% of them run on?? 
Like Banjopete said, look at everything else that is petroleum based and it should help you relax...




Canuck said:


> ugh this is brutal. Wonder how many of these will end up cutting or completely suspending their divvy
> 
> IPL
> PPL
> ENB
> ENF
> TRP
> VSN
> KEY
> 
> thinking these ones are less safe
> 
> GEI
> ALA
> BTE
> TOG
> WCP
> SGY - for sure
> CPG


----------



## doctrine

In 2010, Sinopec bought 9.07% of Syncrude for $4.65 billion from ConocoPhillips. At that valuation, COS' stake (36.74%) is worth $18.9 billion. At the time, WTI was around $80 a barrel. That value would roughly be a 150% premium to the current share price.


----------



## peterk

peterk said:


> Just bought some at 15.34.


Oops.

Doubled down today at $13.40.


----------



## Canuck

Gumball said:


> Canuck - 85% of IPL business is on take or pay, PPL a little less, these are safe pipelines. They also transport Nat Gas and condensates, so no need to hit the panic button just yet.
> 
> Also keep in mind there are 16.5 million new vehicles sold in the USA this year, another 3 mil sold in Canada, and guess what 99% of them run on??
> Like Banjopete said, look at everything else that is petroleum based and it should help you relax...



ya thanks.

I'm not going to panic, as a lot of these stocks have been held for many years, and i don't want to record the cap gain on them. BTE, SGY, CPG and Tog I have a big loss on, but I have a feeling they may bounce fast, like within the 30 day buyback period, and I'd rather have that gain than a tax loss.

rough week for sure.


----------



## bmoney

Canuck said:


> ya thanks.
> 
> I'm not going to panic, as a lot of these stocks have been held for many years, and i don't want to record the cap gain on them. BTE, SGY, CPG and Tog I have a big loss on, but I have a feeling they may bounce fast, like within the 30 day buyback period, and I'd rather have that gain than a tax loss.
> 
> rough week for sure.


The panic in energy stocks reminds me of the 2008-2009 GFC. I recall buying ING hybrid debt in 2009 that was trading <20 cents on the dollar, on the AEX - the note carried a 6.5% yield at $25 par, it was paying an effective yield of 40% and was senior to preferred stock. I spent the entire weekend reading the prospectus for the hybrid debt, reading all I could about ING Bank and things just didn't add up, everything seemed fine! I took the leap and bought $5000 worth, in approximately 1 year it was trading at near par again, plus 40% yield! Eventually I took my cap gains in disbelief, I could not understand how the market provided such an opportunity. 

Call me lucky, but this is how I'm seeing the energy sector. OPEC represents 1/3 of global production. If collectively OPEC has the lowest marginal cost then good for them. There's still another 68 million barrels a day that need to come from somewhere and at a much higher cost. So long as the sun is shining, there is no shortage of energy on this planet, what we lack are solutions for harnessing energy cheaply and right now and for the foreseeable future it's going to be a carbon based solution.


----------



## Fraser19

bmoney said:


> Call me lucky, but this is how I'm seeing the energy sector. OPEC represents 1/3 of global production. If collectively OPEC has the lowest marginal cost then good for them. There's still another 68 million barrels a day that need to come from somewhere and at a much higher cost. So long as the sun is shining, there is no shortage of energy on this planet, what we lack are solutions for harnessing energy cheaply and right now and for the foreseeable future it's going to be a carbon based solution.



That is more or less my outlook as well. I was reading somewhere that COS is releasing there budget for 2015 tomorrow. Can anyone verify this?
Too much info on the net and not enough info to verify it.

I was hoping to see more of a slide today in the price but it seems to be bouncing between 13.45 - 13.60. I would like to see it in the 9.99 - 11.99 area before I make a move.


----------



## newfoundlander61

http://web.tmxmoney.com/article.php?newsid=71617499&qm_symbol=COS&mobile=false


----------



## CadMan

I added to my position of COS today at $13.55. Overall I have a loss on this stock, but I see it as an opportunity to DCA. The dividend yield is over 10% at this price. I know their payout ratio is high, but I think the probability of a dividend cut is more than priced into the stock price. I also think the market is overreacting to the drop in oil prices and for a long term hold this is a good entry point (and if the price drops, it begins to look like a takeover target).


----------



## AltaRed

doctrine said:


> In 2010, Sinopec bought 9.07% of Syncrude for $4.65 billion from ConocoPhillips. At that valuation, COS' stake (36.74%) is worth $18.9 billion. At the time, WTI was around $80 a barrel. That value would roughly be a 150% premium to the current share price.


Sinopec's purchase is the equivalence of about $39/share based on COS having 484.6 million shares outstanding (18900/484.6). Whether that is a premium or not has to be compared with COS share trading prices of $25-35/share in the 2010-2011 period...and dropping to the $20-25 range post conversion from an income trust.


----------



## bmoney

In case anyone is wondering whether low oil/gas prices are stimulating demand. Checkout November car sales: http://finance.yahoo.com/video/autos-39-selling-190100593.html

SUV, crossover and truck sales up huge. Jeep Cherokee out selling Honda Civics, up 67%, Silverado up 24%. Prius down 13% Volt down 30%. So much for being green, not many people actually care.


----------



## bmoney

AltaRed said:


> Sinopec's purchase is the equivalence of about $39/share based on COS having 484.6 million shares outstanding (18900/484.6). Whether that is a premium or not has to be compared with COS share trading prices of $25-35/share in the 2010-2011 period...and dropping to the $20-25 range post conversion from an income trust.


Maybe Harper will ease up on foreign investments in oil sands, may not have a choice if things continue to slide further.


----------



## HaroldCrump

bmoney said:


> Maybe Harper will ease up on foreign investments in oil sands, may not have a choice if things continue to slide further.


This is not the time to sell our oil assets at such discount prices.
It'll almost be a firesale.
It is not as if the Canadian federal govt. were going bankrupt like Greece or Cyprus.

I am sure this is exactly what China, Malaysia, etc. would want though - buy Canadian oil sands assets at deeply discounted prices.
They are not worried about deflation.


----------



## Fraser19

+2.5% so far today, that's nice to see.
Transferring money in to pick some up within the next month.
It will be interesting to see what the 2015 budget is and what they have to say about the drop in oil.


----------



## Siciliano698

Dead cat bounce for OIL, Ill wait again before adding this, CRUDE OIL is going to 45$ a br sometime next year, Add this when it reach 7-11$ a share.

Dividend cut to be expected like they did in 2009.


Deflation cycle before a inflation/hyper inflation cycle next. repeat like 07-09 this, It's a bigger bubble each time 

2015 is the year of the sheep in chinese astrology, sheep get slaughtered in 2015.


----------



## Fraser19

In thinking about whats happened with LRE (the price has fallen though the floor). At what price would COS become something that is a pure gamble, with lots of risk of buyout?
A few people saying we will see this dip a bit under 10.00. Is it still relatively safe from a buyout at that price?

Looks like the "dead cat bounce" is on its way down again.


----------



## bmoney

Fraser you sounded geared up to buy at 11am and your heart changed a few hours later. I don't think you should buy any stocks at all.

Few weeks ago I attended a conference with some esteemed portfolio managers, the big topic was risk since we were coming off the October blues. One of the things they mentioned was how difficult it is to employ Warren's old adage about buying when the streets were bloody - you know what I mean. When the world was collapsing in 2008/2009, some people pulled the trigger early at Dow 10k, and sold at lows. In hindsight, they should have held or accumulated. It was not that their strategy was initially incorrect, only their timing. If they had held on, in a matter of 6 months a -30% drop would have turned into a 20% gain (something like that). Oil could drop to $45, and I might be down on paper 50%. But it could go up to $100 in 4 years, and my returns might look something like -50% year 1, 0% year 2 0% year 3, 100% year 4 or 12.5% average return, not bad eh?


----------



## GOB

Agreed. I don't think COS is at risk of getting bought out for peanuts.


----------



## doctrine

As per my comment a few pages ago, based on Sinopec's purchase of 9% of Syncrude in 2010, when WTI traded from $70-80, a COS buyout would be valued at $30+/share.


----------



## al42

Here come the dividend cuts...43% Yikes

http://www.theglobeandmail.com/glob...20141203&archive=ccnm&slug=201412030982270001


----------



## bmoney

al42 said:


> Here come the dividend cuts...43% Yikes
> 
> http://www.theglobeandmail.com/glob...20141203&archive=ccnm&slug=201412030982270001


Dividend cut was to be expected. I think the budget is a net positive, things are not so bad! Significantly lower cap-ex and 5.9% yield based on realistic assumptions. How you gonna argue that?


----------



## Fraser19

bmoney said:


> Fraser you sounded geared up to buy at 11am and your heart changed a few hours later. I don't think you should buy any stocks at all.


Well I am 70% index so that's good. Truth is I am very new to this. And as far as I can see at this time getting excited is fine, then I sit back read some more, ask some questions, work out some math and then usually decide to wait some more. Overall I have done ok and I don't see much of a problem with that. But the reality is, I am new and learning. 

But back to the dividend cut, that's good to see and it is still a nice yield as far as I can see. I am interested to see how the market responds to the cut.


----------



## GOB

Will be interesting to see how the market reacts to this. It's the right move for the longer term, but will the market push the stock down further?


----------



## blin10

GOB said:


> Will be interesting to see how the market reacts to this. It's the right move for the longer term, but will the market push the stock down further?


a lot of time stock price goes up after a divi cut, we'll see


----------



## Siciliano698

Draghi & Co. face historic QE decision at Thursday’s ECB meeting


Santa clause rally starting ?


----------



## OurBigFatWallet

Looks like Canadian Oil Sands has cut its dividend 43% from 35 cents to 20 cents effective Jan 2015


----------



## OurBigFatWallet

More info on the big dividend cut:
http://www.cdnoilsands.com/Media-Ce...-Oil-Sands-Announces-2015-Budget/default.aspx


----------



## bmoney

Fraser19 said:


> Well I am 70% index so that's good. Truth is I am very new to this. And as far as I can see at this time getting excited is fine, then I sit back read some more, ask some questions, work out some math and then usually decide to wait some more. Overall I have done ok and I don't see much of a problem with that. But the reality is, I am new and learning.
> 
> But back to the dividend cut, that's good to see and it is still a nice yield as far as I can see. I am interested to see how the market responds to the cut.


Sorry if I was harsh earlier, we all have to start somewhere. I started off when I was still in high school. Learned my lessons the hard way by losing money! Thankfully I was playing with small amounts. Since then I've collected a few designations and work as a consultant in finance. The index approach is probably best for most people in the long run, so it sounds like you're doing something right. I like Mawer's new slogan, be boring make money, so true, but there's no fun in that.


----------



## doctrine

COS had no choice but to cut the dividend. Even post dividend cut, they are budgeting for a payout of 130% of cash flow next year. And the real bad news is that is assuming $81 Cdn a barrel for SCO, which is currently trading at $74. A return to $75 WTI in 2015 and $80 by 2016 is actually necessary for the new dividend to be sustainable. Oil prices have just fallen that far. 

The only thing saving other companies so far are hedges. I think it is very fair to expect similar moves over the next 6 months if oil is not substantially higher as the hedges run out.


----------



## bmoney

The bid is at $11.50, really. With oil down 40% was the dividend cut really a surprise when this company has a history of being proactive with their dividend? This is almost trading at book value.


----------



## Chris L

Anyone picking up more of these? Or is it more prudent to look at other companies?


----------



## Synergy

bmoney said:


> The bid is at $11.50, really. With oil down 40% was the dividend cut really a surprise when this company has a history of being proactive with their dividend? This is almost trading at book value.


I don't think these things get fully priced in until the actual release. Beforehand it's just speculation and the extend of the cut is anyones guess.


----------



## peterk

peterk said:


> Just bought some at 15.34.





peterk said:


> Oops.
> 
> Doubled down today at $13.40.


Uhg. Double oops! Quadrupling down at $11.00....

This is getting ridiculous... So Syncrude is worth $15B now when Sinopec said just a few years ago it was $50B? And that was before MLMR and the Centrifuge plant were paid for?


----------



## leeder

Chris L said:


> Anyone picking up more of these? Or is it more prudent to look at other companies?


I don't own this stock, but I see this stock on the news a lot... mostly negative news. COS keeps projecting lower capex; however, issues keep coming up that require higher than expected capital expenditures. Management hasn't had success managing the company's expenses and boosting earnings. 

While I'm not a technical investor, I see this stock broke through the $19-$22 trading range. Looks like it has negative momentum. 

Even with the cut in dividend, the payout still looks high.

If I had cash on hand, I'd rather buy a Suncor or Canadian Natural Resources. You'll have higher potential for capital appreciation and dividend growth with those names.


----------



## bmoney

If anyone needs a lift right now, this article might make you feel better: http://finance.yahoo.com/news/energy-stocks-getting-ready-buy-110000936.html

"Stovall found that there have been six prior instances when energy stocks hit similar relative strength levels, and in five of those instances the return over the next 12 months was positive, with the only negative being a negligible 0.1 percent loss. The average gain was 13.45 percent, which was just shy of the S&P 500's performance.

The results were even more dramatic for small caps, with energy shares outpacing their benchmark by 24.2 percent in the year after and 81 percent in the following two years."


----------



## bmoney

My ACB is now around $16.20 on 3,300 shares sitting on a pretty decent loss about 30%.


----------



## Siciliano698

div cut sure made a sell storm this morning so far.


----------



## My Own Advisor

They had to cut the dividend, this is responsible management. It will go back up. This is not the end of the world. Are people going to stop driving their cars (oil) and using iPhones (from oil) tomorrow?


----------



## Chris L

My Own Advisor said:


> They had to cut the dividend, this is responsible management. It will go back up. This is not the end of the world. Are people going to stop driving their cars (oil) and using iPhones (from oil) tomorrow?


Exactly. Swapping from long term under supply to short term oversupply.

I ended up snapping some up some at 10.8 for a 11.9 avg.

Let it ride into the future and lets see what happens to oil in the long run.


----------



## Siciliano698

World Picture on Oil production costs


----------



## peterk

leeder said:


> If I had cash on hand, I'd rather buy a Suncor or Canadian Natural Resources. You'll have higher potential for capital appreciation and dividend growth with those names.


Yes indeed *normally*. But right now at this moment COS has a very realistic chance of 100%+ increases in both share price and dividend payment within a short time span if oil goes back to $90+. Can the same be said for SU or CNQ?

Yield is now 7% after the cut...


----------



## lh0628

bmoney said:


> Fraser you sounded geared up to buy at 11am and your heart changed a few hours later. I don't think you should buy any stocks at all.
> 
> Few weeks ago I attended a conference with some esteemed portfolio managers, the big topic was risk since we were coming off the October blues. One of the things they mentioned was how difficult it is to employ Warren's old adage about buying when the streets were bloody - you know what I mean. When the world was collapsing in 2008/2009, some people pulled the trigger early at Dow 10k, and sold at lows. In hindsight, they should have held or accumulated. It was not that their strategy was initially incorrect, only their timing. If they had held on, in a matter of 6 months a -30% drop would have turned into a 20% gain (something like that). Oil could drop to $45, and I might be down on paper 50%. But it could go up to $100 in 4 years, and my returns might look something like -50% year 1, 0% year 2 0% year 3, 100% year 4 or 12.5% average return, not bad eh?


Actually -50% then 100% increase would bring you back up to where it was (excluding dividends). Speaking of -50%, that's about where I'm at, ACB is at about $23. Tempted to buy some at this point, the only thing holding me back is the management (or mis-management to be more appropriate).


----------



## Ihatetaxes

COS getting murdered - down 15% right now.


----------



## Fraser19

peterk said:


> Yes indeed *normally*. But right now at this moment COS has a very realistic chance of 100%+ increases in both share price and dividend payment within a short time span if oil goes back to $90+. Can the same be said for SU or CNQ?
> 
> Yield is now 7% after the cut...


I am wondering if 7% is low enough? Still seems like a pretty large dividend with the cost of oil, and not a lot of faith in a quick recovery. Personally I would rather them cut it down more and put that money into debts for a year and then return to a higher dividend. But at the same time they can always reduce it in the future. I would still want in if they cut the div to 10 cents for a while. Also that would be nice as I imagine it would further suppress the share prices. 

484 million shares at .20 cents dividend per quarter that is what 96m a quarter, although I imagine a lot of that is Dripped back into the company. Cut it to .10 cents and 48m. Then put the other 48m back into debt. Also considering the cut of .15 cents that is 72m a quarter. 72+48=120m x 4=482m That would wipe out some serious debt.

Total debt 1,890,000,000-482,000,000=1,408,000,000. So roughly 25% debt reduction. How nice would that be? Then we can also include the 374,000,000 they knocked off the budget to bring it down to 1,034,000,000. One year to knock off 856,000,000 that would be beautiful. 

I know these are perfect world numbers that do not include interest or unexpected and growth expenses. But it does say a lot about what can be done for the company with that dividend and budget reduction money. 



Ihatetaxes said:


> COS getting murdered - down 15% right now.


I was getting excited watching it drop a few cents every minuet, now it is climbing at about 1/8th that rate. But I foresee more down sliding over the next few days, well at least I am hoping for it.


----------



## My Own Advisor

I hope it goes to $5. Just imagine how many shares you can buy with that price!!!!

In 5-10 years, you're laughing all the way to the bank.


----------



## Fraser19

My Own Advisor said:


> I hope it goes to $5. Just imagine how many shares you can buy with that price!!!!
> 
> In 5-10 years, you're laughing all the way to the bank.


What would you say the probability of that happening is?
While I am new to this, $5 seems just so low. Although not many of us saw such a drop in LRE coming.


----------



## My Own Advisor

$5, not likely. Less than $10, very likely IMO.

I'll be ready to scoop some up if/when it happens though. Deals for $5B + companies don't come along very often.


----------



## Fraser19

Well it sure doesn't have very far to go for us to see it sub $10.
Are there any known upcoming events that could further push oil down? Another OPEC meeting or another player planning to flood the planet with cheap oil?


----------



## Siciliano698

Falling knife atm.


----------



## Jungle

Good thing ENB is up 12% today, helps ease the pain on my 47% loss on COS. 

Question is, if you are a shareholder in the red, would you add now?


----------



## Chris L

Is oil not currently stable? How many can afford to produce oil at a cheaper rate than it is today? What will the cost of oil be in the future? Don't like a 7% Div?


----------



## HaroldCrump

No, oil is not stable yet.
It might eventually level off somewhere between $60 - $70 in the short term, but IMO it is too early to call it.


----------



## Siciliano698

Opec doesn't like being pushed aside by our neigbhors down south with there "new boom in frackin/shale energy" Our neigbhors down south is also trying to punish the ruskis and ruin them financially " think financial tactics that brought ussr down or massive rubble crumble in the 90s"


----------



## CPA Candidate

COS's lack of risk management going completely unhedged means that it was destined to make bold moves first.

You can read about there is risk management policy here.
http://www.cdnoilsands.com/files/ar...iew/pdf/FinancialReview_3_MDA_15-RiskMgmt.pdf

_A prolonged period of low crude oil prices could affect the value of our interest in Syncrude and the level of capital investment
and could ultimately result in curtailment of production. Any substantial and extended decline in our realized SCO price would
have an adverse effect on COS’ cash flow from operations and would likely affect our ability to pay dividends and to repay our
debt obligations.

While the Syncrude Project has not been shut down for non-operational reasons since production commenced in 1978,
a prolonged period of very low oil prices could result in production being suspended. Any such suspension of production
could expose Canadian Oil Sands to significant additional expense and would negatively impact its ability to pay
dividends and repay its debt obligations. A prolonged period of very low oil prices could ultimately render the Syncrude
Project uneconomic.
_


----------



## Butters

^^^
Wow read the last 5 words

Scary. I'm gonna pull a lone wolf. Watch the preformance of the Edmonton oilers hockey team.


----------



## OurBigFatWallet

I was surprised to read (above) that they don't hedge at all. The dividend cut makes sense. If anyone would not be able to ride out a period of low oil prices it would be COS.


----------



## daddybigbucks

I remember in the big crash of 2008, I was going to put my whole kids RESP into COS because I was sure in 10 years it would double. 
Its now below its 2008 low.


----------



## Fraser19

One of the things I am wondering is, oil from mid 2008 to mid 2009 was lower than it is today.
COS managed through that, what would stop it from doing the same again? Can Saudi really push oil down that low for over a year?
Also I am wondering, what is the logic behind not hedging?


----------



## HaroldCrump

Fraser19 said:


> One of the things I am wondering is, oil from mid 2008 to mid 2009 was lower than it is today.
> COS managed through that, what would stop it from doing the same again?


That was a different situation than now.
At that time, the cost of production was also dropping due to the global recession.
That was also before the massive shale boom in the US - shale extraction really took off post 2009 because of low yield junk bonds.

On the other hand, right now, Canadian producers are facing higher production costs, including skilled labor.
The US is very attractive market for skilled oil sands professionals because of better pay, lower taxes, etc.

Canadian oil sands are facing challenges from both ends - higher cost than 2009, and falling prices.
If WTI indeed falls to $40 like 2009, and stays there for 1 year or more, a very large number of Canadian producers will be in serious trouble.

It will probably also kick off a R/E correction in Calgary, Edmonton, Saskatchewan, etc.



> Can Saudi really push oil down that low for over a year?


Yes, they can, without missing a beat.


----------



## doctrine

Jungle said:


> Question is, if you are a shareholder in the red, would you add now?


You could, but keep in mind that according to their 2015 budget, with SCO already selling for 10% less than they indicated, COS is essentially making zero money and fully paying the dividend out of debt. They have just enough cash flow to pay for capital expenditures. 

Meaning, if oil drops another $5, they may as well shut in production as they'll be losing money. At some point, if oil doesn't rise (i.e. SCO back above $80 Cdn), they may have to cut the dividend further. I would estimate they have 6 months.

On the plus side, when oil rises back above probably $85, COS will also be the first to raise their dividend.


----------



## fatcat

HaroldCrump said:


> Yes, they can, without missing a beat.


perhaps harold but i find it hard to believe that the us government wouldn't lean on them if they tried, not to mention they are depleting their reserves for pennies

whatever strategic gain might occur vis a vis russia and iran would be far outweighed by the destruction to north american and world energy companies and producer nations who can't survive low oil

the world economy would gain on a lower "oil tax" but would pay in other ways

the saudis have massive reserves but such a move would isolate them from almost the whole planet (except maybe china) and i don't think the saudis can afford that since they are already so disliked worldwide as it is


----------



## peterk

Fraser19 said:


> One of the things I am wondering is, oil from mid 2008 to mid 2009 was lower than it is today.
> COS managed through that, what would stop it from doing the same again?


Indeed it can manage on low oil for a while. Debt is quite low and more can be used to fund operations if needed. Syncrude's owners are not going to shutter a plant site worth 10s of billions just because profits slip slightly into the red for a year or two. This company hummed along just fine since 1978 and for decades during the 80s and 90s while oil cost $25/barrel.

Sure costs have increased... But in an extreme situation of continuous low oil the cost of labour will drop significantly and if SHTF really bad Alberta could step in with slashed regulations that allow oil sands companies to operate temporarily on a much more streamlined budget. 

COS is dropping like it's some junior company worth 500m that can't weather the storm of 2 years of $60 oil...lol


----------



## HaroldCrump

fatcat said:


> perhaps harold but i find it hard to believe that the us government wouldn't lean on them if they tried, not to mention they are depleting their reserves for pennies
> whatever strategic gain might occur vis a vis russia and iran would be far outweighed by the destruction to north american and world energy companies and producer nations who can't survive low oil


But fatcat, this is precisely in the interest of the US.
If the US has indeed undertaken joint action with the Saudis, this is in their interest - geo-politically as well as economically.

Consider this:

- They will be importing oil cheaper than producing domestically (say $60 vs. $80)
This is effectively a form of stimulus for the US because it generates more consumer spending (in other areas).

- They can conserve their own resources i.e. leave them in the ground for future use.
Interestingly, Charlie Munger made this point last year:

*CHARLIE MUNGER: Energy Independence Is A Dumb Idea*

- It allows the US to pursue its green energy agenda (a big legacy for the outgoing President Obama)

- This weaken pretty much all of US's enemies - Iran, Russia, Venezuela, ISIS...

- This is also a stimulus for China, which in turn, means a stimulus for the US

...and so on.

To me, this is a perfectly logical move by the US.

As for the shale producers it will affect, they are simply collateral damage.
National strategic interest is more important to the US than some small time shale explorers, who were over-leveraged anyway.



> the saudis have massive reserves but such a move would isolate them from almost the whole planet (except maybe china) and i don't think the saudis can afford that since they are already so disliked worldwide as it is


Since when do they care about that?
Hasn't stopped them from engineering at least 3 oil crises in the last 40 years.


----------



## AltaRed

I agree there would be some relief from the AB gov't if cash flow started to go negative. There would be deferment of royalty and other tax payments to avoid shuttering the plant. The last thing the AB gov't would want would be the loss of all those jobs, even on a temporary basis.

The other issue is the rest of Syncrude's ownership can operate in the red because those companies have other assets. COS may not have the voting power to shut the plant down anyway.


----------



## bmoney

This must be the sign of a bottom. We are contemplating apocalyptic outcomes for a company that produces one of humanity's most vital resource. This is not RIMM.


----------



## newfoundlander61

I posted this a while back "Looking to place my first trade in a stock within my TFSA. Is the current share price considered a good entry point, of course its impossible to time the market but looking for opinions on the current price as of fridays close of $17.61" Glad I was busy with work; family etc and after checking today on it's price the best investment was not investing. Not sure how low it will go before settling down.


----------



## Siciliano698

newfoundlander61 said:


> I posted this a while back "Looking to place my first trade in a stock within my TFSA. Is the current share price considered a good entry point, of course its impossible to time the market but looking for opinions on the current price as of fridays close of $17.61" Glad I was busy with work; family etc and after checking today on it's price the best investment was not investing. Not sure how low it will go before settling down.


Waiting was a good move, Could be a good play in the future for your tfsa when things start to stablize, I say keep an eye on it.:biggrin:


----------



## fatcat

HaroldCrump said:


> But fatcat, this is precisely in the interest of the US.
> If the US has indeed undertaken joint action with the Saudis, this is in their interest - geo-politically as well as economically.
> 
> Consider this:
> 
> - They will be importing oil cheaper than producing domestically (say $60 vs. $80)
> This is effectively a form of stimulus for the US because it generates more consumer spending (in other areas).
> 
> - They can conserve their own resources i.e. leave them in the ground for future use.
> Interestingly, Charlie Munger made this point last year:
> 
> *CHARLIE MUNGER: Energy Independence Is A Dumb Idea*
> 
> - It allows the US to pursue its green energy agenda (a big legacy for the outgoing President Obama)
> 
> - This weaken pretty much all of US's enemies - Iran, Russia, Venezuela, ISIS...
> 
> - This is also a stimulus for China, which in turn, means a stimulus for the US
> 
> ...and so on.
> 
> To me, this is a perfectly logical move by the US.
> 
> As for the shale producers it will affect, they are simply collateral damage.
> National strategic interest is more important to the US than some small time shale explorers, who were over-leveraged anyway.
> 
> 
> Since when do they care about that?
> Hasn't stopped them from engineering at least 3 oil crises in the last 40 years.


all good points ... lower oil absolutely puts more money in the consumers pocket, it does protect american reserves which will make charlie happy ... 

i do disagree to the extent that the usa wants to see the kind of chaos that will ensure if oil hovers around $30 (the cnq ceo's prediction), it will create real problems for oil producing states many of whom are american allies, not to mention american petro corporate interest like haliburton, exxon et al that i think might outweigh the benefits

second, i think the saudi's, beginning with 9/11 have slipped increasingly into isolation (from isolation into deeper isolation) and while the kingdom has always followed its own course, it is very dependent on us aid and even more on middle east peace and something like stability

so i guess i making the case for stability versus instability (i can't imagine $30 oil not creating some kind of serious economic chaos) and the usa/saudis are never interested in instability no matter where it happens

the case could certainly be made that lower oil and consequent lower gasoline prices does inject a huge amount of money into the economy that would otherwise have gone to the saudis and others, that is likely to be a positive for the economy worldwide and may well spur the growth that we need to get out of this malaise


----------



## GOB

fatcat said:


> a if oil hovers around $30 (the cnq ceo's prediction)


I don't think it's a prediction, more that he acknowledges that it's a possibility for a brief period of time. 



> MARKETS More: Oil
> OIL GIANT WARNS: Crude Could Crash To $30
> 
> MYLES UDLAND
> NOV. 30, 2014, 6:30 PM	36,826 20
> N. Murray Edwards
> edwards.usask.ca
> Murray Edwards.
> More than 50% lower.
> 
> That is how far Canadian billionaire Murray Edwards, chairman of Canadian Natural Resource, thinks oil prices can fall from here.
> 
> Speaking with the Canadian business publication Financial Post, Edwards said: "Prices could spike down to $30, $40. It got down to $35 in 2008, for a very short period of time."
> 
> Edwards told Financial Post's Claudia Cattaneo: "On a given day you can have market fluctuations where prices fluctuate far more than the underlying economic value of the unit." He added, though, that if oil were to fall to $30 or $40 a barrel, he didn't expect it would stay that low.
> 
> "The better question is where does it stabilize, and that $70-$75 area is probably not a bad place to stabilize for a period of time until you get more balance in term of growth in demand and some supply response," Edwards said.


----------



## dubmac

fatcat said:


> the case could certainly be made that lower oil and consequent lower gasoline prices does inject a huge amount of money into the economy that would otherwise have gone to the saudis and others, that is likely to be a positive for the economy worldwide and may well spur the growth that we need to get out of this malaise


 +1 well put. fatcat
both gold and oil are down. Is deflation still the major problem facing policy-makers?


----------



## HaroldCrump

fatcat said:


> i do disagree to the extent that the usa wants to see the kind of chaos that will ensure if oil hovers around $30 (the cnq ceo's prediction), it will create real problems for oil producing states many of whom are american allies, not to mention american petro corporate interest like haliburton, exxon et al that i think might outweigh the benefits


I don't think anyone wants oil to go to $30.
The US & Saudi interests are well served at $60.

All the objectives can be met at & around $60 - it will shake out Shale producers, heavy crude oil sands producers, etc.
It is enough to cause major financial problems for Iran, Venezuela, and Russia.
It is a massive boost to the Chinese & Japanese economies.
...and so on.

It is just that $60 sucks for us...but we are not even a blip on the US strategic interest radar.


----------



## HaroldCrump

dubmac said:


> both gold and oil are down. Is deflation still the major problem facing policy-makers?


It is a problem they have manufactured for themselves.


----------



## jamesbe

Ouch, got in too early on this one. Good thing it's in my RRSP and I don't plan on dumping it ever....


----------



## Siciliano698

deflation before hyper inflation.


----------



## chantl01

So COS is now up over 2% on the day. Anyone have an opinion on whether that means it's hit bottom or is this a dead cat bounce and it still has a ways to fall?


----------



## Fraser19

chantl01 said:


> So COS is now up over 2% on the day. Anyone have an opinion on whether that means it's hit bottom or is this a dead cat bounce and it still has a ways to fall?


The point of view I have is every day there are news reports saying oil is going to go lower. I don't see how COS will continue to rise if the price of oil continues to sink. I feel that it will continue to go down. But as it is commonly stated on this forum, predicting the market is impossible. So who knows?

My highest buy in price at this time is 10.00


----------



## Chris L

With every dip in oil prices, there will be a dip in the price of oil stock - or so it seems. A drop in the div looks like a major drop in price (10%+), some of this is being priced into the other stocks that haven't yet experienced the div drop potentially mitigating the drop. If oil is at 66 and hits 45 for a few days or weeks, we will see another drop. I wouldn't hold your breath for that one though. It's not nearly as likely as people are meant to FEAR. So either you capitalize on the fear or don't. In 2-3 years, what will prices look like? What sort of savings do you want on the price? Maybe you'll see another 10% drop, or maybe not. Most of the bad news is already out there and known. Doesn't get THAT much worse?

COS has already suffered the worst of their div drop. Only bad news now is drop in oil price.

I'm just glad to be buying it at a low point with more upward potential.

Bring on higher oil prices.


----------



## fatcat

HaroldCrump said:


> I don't think anyone wants oil to go to $30.
> The US & Saudi interests are well served at $60.
> 
> All the objectives can be met at & around $60 - it will shake out Shale producers, heavy crude oil sands producers, etc.
> It is enough to cause major financial problems for Iran, Venezuela, and Russia.
> It is a massive boost to the Chinese & Japanese economies.
> ...and so on.
> 
> It is just that $60 sucks for us...but we are not even a blip on the US strategic interest radar.


right, well you mentioned $10 and i was responding to that number ..


----------



## bds

I bought more yesterday at $11. I think the worst is over now that the div has been cut. I don't think oil will drop too much further and it's mostly fear mongering by the media to get article views.

But that being said, I could just as easily be wrong and it could plummet further. When you choose to jump in on this one is a gamble for sure.


----------



## rikk

Chris L said:


> With every dip in oil prices, there will be a dip in the price of oil stock - or so it seems. A drop in the div looks like a major drop in price (10%+), some of this is being priced into the other stocks that haven't yet experienced the div drop potentially mitigating the drop. If oil is at 66 and hits 45 for a few days or weeks, we will see another drop. I wouldn't hold your breath for that one though. It's not nearly as likely as people are meant to FEAR. So either you capitalize on the fear or don't. In 2-3 years, what will prices look like? What sort of savings do you want on the price? Maybe you'll see another 10% drop, or maybe not. Most of the bad news is already out there and known. Doesn't get THAT much worse?
> 
> COS has already suffered the worst of their div drop. Only bad news now is drop in oil price.
> 
> I'm just glad to be buying it at a low point with more upward potential.
> 
> Bring on higher oil prices.


Why I'm not buying ... the COS 2015 outlook is based on $75 WTI with cash flow $730M, less capex $564M which leaves $166M divided by 484M shares, or $0.34 per share which I think someone above also pointed out. Absolutely, bring on higher oil prices, but now that the grownups have left the room, and have just cut prices further, when if ever again will that be? How much lower will WTI go? And even COS has stated they'll be upping production in 2015 ... I'm staying away for now ... fwiw.


----------



## HaroldCrump

fatcat said:


> right, well you mentioned $10 and i was responding to that number ..


Did I say $10...sorry, I meant $40, like 2009.
The COS exec was saying $30.

Anyhow, I believe the Saudis are targeting $60.
$60 hurts shale and oil sands, but doesn't hurt the Saudi as much.

At $40 the Saudis will be hurting a lot.
$30 would be catastrophic for most countries that depend on oil.
$10 would be Armageddon...LOL


----------



## AltaRed

A number of analysts (collectively worth 2 cents) have just downgraded COS to Underperform :stupid: with new target prices in the $13-15 range. I am guessing the COS price has overshot to the downside but the analysts no doubt have based that on COS recent 2015 guidance (as noted by Rikk above). Will WTI average $75 in 2015? Who knows.


----------



## Chris L

What else is to buy? BTE is getting rocked just as hard. Any ideas?


----------



## rikk

^ Well, I picked up a 1.75l of CC on the way back from Home Depot ... I've no ideas in oil, well, just one ... wait. I have a GIC maturing the 10th ... a week ago I thought I'd be buying some oil ... now I don't think so ...

Fwiw ... WTI is currently at $65.66 ... that's a steady decline/trend if you bring up the charts ... http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html


----------



## Siciliano698

Chris L said:


> What else is to buy? BTE is getting rocked just as hard. Any ideas?


Seadrill Ltd NYSE SDRL, Problem is this is a Republican type company in a democrat setting although things could change in Janaury.... Divs were @ 1 dollar a share until recent suspension.


----------



## My Own Advisor

rikk said:


> ^ Well, I picked up a 1.75l of CC on the way back from Home Depot ...l[/URL]


Party on 

I figure oil stocks have not hit bottom and probably won't for another few weeks, the dust still needs to settle, then in Jan. 2015, I'm in on a few.


----------



## Siciliano698

My Own Advisor said:


> Party on
> 
> I figure oil stocks have not hit bottom and probably won't for another few weeks, the dust still needs to settle, then in Jan. 2015, I'm in on a few.


Plenty of gems out there  , Oil and Mining Sector are rock bottom sectors everything else is up.


----------



## Cal

My Own Advisor said:


> I figure oil stocks have not hit bottom and probably won't for another few weeks, the dust still needs to settle, then in Jan. 2015, I'm in on a few.


I am being patient to buy in this sector as well.


----------



## cainvest

My Own Advisor said:


> I figure oil stocks have not hit bottom and probably won't for another few weeks, the dust still needs to settle, then in Jan. 2015, I'm in on a few.


It's a tough call, they might drop down over the coming weeks or, if middle east tensions rise, start to climb back up.


----------



## Synergy

The bleeding continues this morning as MS cuts forecasts - "oversupply would peak next year - brent". COS continues to slide - down over 6% this morning.


----------



## My Own Advisor

Kaboom. Market down almost 300 points and COS is taking a beating.


----------



## 1980z28

I am about 15 % oil,but after this I could be 22% oil


----------



## Chris L

This is way past rational. Pure panic.


----------



## Siciliano698

Suncor & Imperial oil getting cheaper  but our neighbors down south are really screwing us over at the moment, pumping out 9 million barrels of oil per day down south along with a high usd which could hurt us in the long run. It's looking bad for exports.

we could be @ 60$ a barrel by weeks end.


----------



## Fraser19

Siciliano698 said:


> Suncor & Imperial oil getting cheaper  but our neighbors down south are really screwing us over at the moment, pumping out 9 million barrels of oil per day down south along with a high usd which could hurt us in the long run. It's looking bad for exports.
> 
> we could be @ 60$ a barrel by weeks end.


It sure has been crazy to watch. I didn't expect COS to go down so much so fast. The positive is all of those great opportunity in 08/09 that I kick my self for missing are coming back again.
If this oversupply lasts for 6 months or more I can get a solid position with HSE, CVE and COS. That will pretty much cover my oil section of my TFSA.
None the less, with how things are dropping I am holding off on pulling the trigger. I don't need another buys showing a -40% at this time.


----------



## peterk

Madness. Just bought more of this at 10.40. 

Seemed like a no brainer. In 2-3 years time today's purchase very likely will pay 15% yield on investment


----------



## gardner

With things like COS getting hit so hard my worry is that they will get scooped up by a VC or something at $6 and I will get nothing. Are any of these oils that are fundamentally solid businesses vulnerable to a hostile takeover during a downturn like we have?


----------



## Siciliano698

Is this black Monday or what? TSX is taking a huge hit. 14,082.70 -391.00 (-2.70%)


----------



## My Own Advisor

WOW. Can't wait to buy some more O&G stocks this month and next month.


----------



## HaroldCrump

gardner said:


> With things like COS getting hit so hard my worry is that they will get scooped up by a VC or something at $6 and I will get nothing.


Chances are some large public sector pension fund could buy it out...they have no qualms about privatizing public assets.


----------



## SkyFall

peterk said:


> Madness. Just bought more of this at 10.40.
> 
> Seemed like a no brainer. In 2-3 years time today's purchase very likely will pay 15% yield on investment


exactly, we don't need to panic 

it's cyclical 

all my losses ''on paper'' is balanced back with my real gain when its time to put fuel in my car


----------



## peterk

^ Then again don't listen to me. My timing is piss poor on this one. Down to 10.10 now just after I bought at 10.40 :stupid:


----------



## Pluto

I'm curious about the $ per barrel COS requires to make a profit. It's probably in this thread here somewhere but I can find it.


----------



## Fraser19

My Own Advisor said:


> I hope it goes to $5. Just imagine how many shares you can buy with that price!!!!
> 
> In 5-10 years, you're laughing all the way to the bank.


Well I originally thought that this could not happen, but now I am seeing it as a real possibility. 
I really don't feel like the dividend cut was enough, and another cut would send the shares down even further. 
When looking at the 5 year chart it sucks to see the share prices have basically declined year after year. Makes me wonder what it would take to get the share price back into the $40/50 range. lol just a modest 400-500% increase.


----------



## Siciliano698

Fraser19 said:


> Well I originally thought that this could not happen, but now I am seeing it as a real possibility.
> I really don't feel like the dividend cut was enough, and another cut would send the shares down even further.
> When looking at the 5 year chart it sucks to see the share prices have basically declined year after year. Makes me wonder what it would take to get the share price back into the $40/50 range. lol just a modest 400-500% increase.


400%-500% check the Novel Atlas Shrugged or the movie it could happen 1 day....


----------



## Pluto

Fraser19 said:


> When looking at the 5 year chart it sucks to see the share prices have basically declined year after year. Makes me wonder what it would take to get the share price back into the $40/50 range. lol just a modest 400-500% increase.


When COS was 55, I think oil was 140. I bet it will take more than 10 years to get oil back to 140+. But oil back to 80 - 100 seems likely in the next 1-2 years, don't you think? But before that happens, and other dividend cut seem probable.


----------



## HaroldCrump

Pluto said:


> When COS was 55, I think oil was 140. I bet it will take more than 10 years to get oil back to 140+.


Well...oil moves up & down very fast.
Keep in mind that in 2008, it went from $80 to $140 in barely 6 months.
From 2007 - summer of 2008, it doubled in price.

I'm not saying it will happen again...just saying that oil is very volatile in either direction.


----------



## peterk

Pluto said:


> When COS was 55, I think oil was 140. I bet it will take more than 10 years to get oil back to 140+. But oil back to 80 - 100 seems likely in the next 1-2 years, don't you think? But before that happens, and other dividend cut seem probable.


If oil and COS are 140 and 55 in ten years that's an 18% annual compounded return... Plus dividends. :biggrin:

What I don't understand is why COS tumbled 15% further on the dividend cut. It was entirely expected, and predicted by the history of COS adjusting it's dividend frequently based on the price of oil. I guess the cut to 20c was more than expected by the average investor?


----------



## peterk

Any of you $10 buyers get your fill at 10.00? It hit just an hour ago.


----------



## daddybigbucks

Fraser19 said:


> Well I originally thought that this could not happen, but now I am seeing it as a real possibility.
> I really don't feel like the dividend cut was enough, and another cut would send the shares down even further.
> When looking at the 5 year chart it sucks to see the share prices have basically declined year after year. Makes me wonder what it would take to get the share price back into the $40/50 range. lol just a modest 400-500% increase.


I thought the same thing. I really think Canadian oil companies just hire workers and pump oil just to line the pockets of the oil execs. I cannot fathom how COS can go 5 years of 80-110 dollar oil and not have doubled its shareholder equity.


----------



## peterk

daddybigbucks said:


> I cannot fathom how COS can go 5 years of 80-110 dollar oil and not have doubled its shareholder equity.


Because... COS is an income paying company that holds an asset that has no intention of increasing it's mining capacity or output through expansion. It's sole method of increasing production is through increased bitumen recovery and reliability improvements. And if/when that is achieved it will all go to increasing the dividend. Why would you expect a major rise in share price? COS is a pure dividend company with no intentions of expansion.


----------



## AltaRed

It may not be up to COS to determine Syncrude's future. The other owners may have more to say about that. That said, I doubt IMO and SU have much interest in expanding Syncrude production materially given they have their own projects to deal with. I think Syncrude (and thus COS) will remain simply a cash flow cow Energizer bunny style.


----------



## bmoney

daddybigbucks said:


> I thought the same thing. I really think Canadian oil companies just hire workers and pump oil just to line the pockets of the oil execs. I cannot fathom how COS can go 5 years of 80-110 dollar oil and not have doubled its shareholder equity.


Lots of people in this thread misunderstand what type of business this is. 

COS owns about a 37% stake in the Syncrude project which is a joint venture among a conglomerate of oil companies. Imperial Oil and Exxon are the principle management companies, meaning they provide the know-how. COS pays it's share of the expenses and receives it's share of the oil revenue, then substaintially flows through profits through dividend distributions. COS is a pure-play on oil sands and is unhedged. Syncrude product is SCO and trades at a seperate discount or surplus to WTI or WCS.

The stock price will fluctuate based on people's expectations of future cash flows from the sale of oil, and the dividends that they can expect to receive. I heard some where so take it for what it's worth, back of the envelope calcuation indicates that the present value of their current oil reserves would be worth almost twice the current stock price - don't have time to do the math myself maybe someone here wishes to tackle that and meaningfully add to this discussion. The book value as of last quarter if you trust TD Waterhouse is $10/share.


----------



## daddybigbucks

my apologies I do stand corrected.
so the 37% stake is just shares in the conglomerate companies, or do they actually hold land and equipment?


----------



## bmoney

I'm going to kick this off, what is COS worth?

1.7 Billion Proven+Probable Reserves (Proven = 90%+ recovery, Probable = 50% recovery, no breakdown is provided)
1.9 Billion estimated Contingent Reserves (currently not commericially viable)
0.6 Billion estimated Prospective Reserves (may be recoverable in future, no process currently available)

How about we low ball and assume 2.5 billion in recoverable reserves over the next 25 years? (about 100 million in annual production) Is this a good place to start?


----------



## peterk

AltaRed said:


> It may not be up to COS to determine Syncrude's future. The other owners may have more to say about that. That said, I doubt IMO and SU have much interest in expanding Syncrude production materially given they have their own projects to deal with. I think Syncrude (and thus COS) will remain simply a cash flow cow Energizer bunny style.


Sorry I was saying COS but I was speaking with the perspective of Syncrude's intentions for mine operations/expansion. With the assumption that COS is somewhat just along for the ride with whatever Syncrude (run by Exxon) does.


----------



## AltaRed

daddybigbucks said:


> my apologies I do stand corrected.
> so the 37% stake is just shares in the conglomerate companies, or do they actually hold land and equipment?


Syncrude is a corporation http://en.wikipedia.org/wiki/Syncrude in which COS owns 36.74% of the shares (working interest), IMO has 25%, SU has 12%, etc. COS will thus own its respective percentage of everything that consitutes the Syncrude operation, i.e. costs, reserves, plant and equipment, etc. The Board is made up of the owners and each will vote its respective working interest. There will be a formula (or forumulae) on what it takes to vote approval of budgets, capital projects, cessation of the project, etc. There are likely different voting percentages for different aspects of the operation as it normally is in Joint Venture agreements elsewhere in the oil patch.


----------



## bmoney

Okay another stab at this since I'm on a train with nothing to do.

PV of 25 years cash flow, 5% discount rate, compounded once annually, net profit of $3.25 per barrel or $325,000,000 /yr

Get ready
.
.
.
.
Present Value = $4,809,558,583

Current market cap $4.8 billion

Does that seem realistic to you?


----------



## Pluto

bmoney said:


> Okay another stab at this since I'm on a train with nothing to do.
> 
> PV of 25 years cash flow, 5% discount rate, compounded once annually, net profit of $3.25 per barrel or $325,000,000 /yr
> 
> Get ready
> .
> .
> .
> .
> Present Value = $4,809,558,583
> 
> Current market cap $4.8 billion
> 
> Does that seem realistic to you?


that would give it a value of about 9.9 per share. Be nice if the market took the price down some more.


----------



## bmoney

Okay here's another clue

COS net income, all figures in million

2005 = $831
2006 = $834
2007 = $743
2008 = $1532
2009 = $432
2010 = $1189
2011 = $1144
2012 = $973
2013 = $834

9 Year Average NI = $945

That's almost 3 times higher than my $325 NI scenario. So why is the market pricing COS at $10? EMT yea right...


----------



## peterk

Nice calculations bmoney. Really shows the pessimistic view currently indicated by the $10 pricing...

Your PV calculations have 2.5B barrels. COS has 1.8B proved + probable, 3.9B proved + probable + contingent, and 4.7B proved + probable + contingent + prospective.

FYI everyone.

Syncrude Reserves


----------



## peterk

What is the PV of 2 years 325m NI followed by 23 more year of normal 945m NI I wonder? Pretty damn close to 25 years normal NI I would think. Why the 50% haircut?


----------



## bmoney

peterk said:


> What is the PV of 2 years 325m NI followed by 23 more year of normal 945m NI I wonder? Pretty damn close to 25 years normal NI I would think. Why the 50% haircut?


PV is about $12.1 Billion assuming a 5% discount rate. The reserves should be discounted since the recovery rates will vary substantially, my hope is 2.5 billion in recoverable reserves is conservative. Annual production has been somewhat consistent at around 100 million barrels per year. COS production cost is somewhere around $46 barrel. If you had to ask me for a theory I think there is a perception that oil sands are the costliest and therefore the marginal barrel. Of course this could be true, but not for COS, or Suncor for that matter, but that won't stop someone that might be apt to short COS merely on it's name.


----------



## GoldStone

5% discount rate is too low. Would anyone buy out COS if all they could earn was a lousy 5%?

8% - 10% would be a more realistic number.

$425M net income ($1 EPS)
20 years of production
8% discount rate
Fair value: $9.82 

$510 net income ($1.2 EPS)
20 years of production
10% discount rate
Fair value: $10.22

I'm not saying that current valuation is correct. My point is, you can torture DCF to prove pretty much anything you want.


----------



## bmoney

GoldStone, I can accept your point, I hope for some of us here in panic it's helpful to understand how rationally irrational the market can be. Discounting 20 or 25 years of earnings to the current PV is silly, even with modest assumptions it's hard to arrive at fair value. WTI traded within a $20-$30 range for nearly a decade before shooting up 600% in the span of about 3 years, just goes to show how impossible it is to predict the future. Which is why I'm holding, because at some point I can be right even if I'm wrong in the long run. In my lifetime I will probably see triple-digit oil, and when that happens COS will be worth 2-3 times the current share price, only hope is that they keep paying me dividends at a reasonable yield while I wait.

PS since we are playing the game, I'll throw out another one. 25 years, 10% discount rate, normalized earnings at $945,000,000 (no growth) PV = $8.5 billion about twice the current share price.


----------



## doctrine

COS, based on $100 oil, is worth in well excess of $30 a share. At $110+, it is approaching $50 a share, where it was in 2007.

At $63 oil, it is just a giant liability with a lot of oil tar in the ground, since they don't make money. They are potentially unable to cover ongoing capital expenditures let alone the dividend which is entirely coming out of debt, and could not afford another major capital program like they just went through. The only worth is in the future value of oil.

The market has priced it at $10. It's not unfair given the current market situation.


----------



## AltaRed

Folks should be using COS document on 2015 full year guidance http://www.cdnoilsands.com/files/Gu...et-Guidance_Final-for-Release_v001_g0hh0t.pdf in their calculations. They used $75 US WTI pricing and a $4 SCO discount to WTI and 0.88CAD to provide postive cash flow of $19/B before capital of $15/B and dividend payments. 

Clearly some of that capex will (and can) be deferred but dividend payments of circa $388* million ($10.25/B) will likely still cause them to incur some debt to balance the books. If they get stuck with $65 WTI crude, notwithstanding the loonie will drop further if that happens, a complete dividend cut is not out of the question. That would make current stock pricing of $10/share approximately equal to the book value. Granted book value is not a good number because unbooked reserves are worth some real value in addition to that which is currently booked as proved reserves. Clearly a takeout candidate at these share prices.

* 80 cents a share/yr times 484.5 million shares


----------



## hboy43

peterk said:


> What is the PV of 2 years 325m NI followed by 23 more year of normal 945m NI I wonder? Pretty damn close to 25 years normal NI I would think. Why the 50% haircut?


Ours is not to ask why, 
Ours is to back up the truck and buy.

hboy43


----------



## Toronto.gal

hboy43 said:


> Ours is not to ask why, Ours is to *back up the truck and buy*.


Indeed, though not always easy/possible to do; and even if it were, enough cash would need to be available [did u use margin to back it up at current levels?].


----------



## hboy43

Toronto.gal said:


> Indeed, though not always easy/possible to do; and even if it were, enough cash would need to be available [did u use margin to back it up at current levels?].


I actually exchanged $50K of SU for $50K of COS and BTE. Essentially exchanged downstream assets for more oil in the ground for same money invested. I also scaled down margin with another sale yesterday of a bank holding. I needed a capital gain for tax reasons and I figure selling banks now is selling high(ish). Plus leaves me more wiggle room if oil continues to crater.

hboy43


----------



## Toronto.gal

^ Makes perfect sense to me. So you actually do sell. :wink:


----------



## Fraser19

Officially gone under 10.00, 9.93 to be exact.
Hope to see 8.00 by the end of the week. 
Make me wonder how many stop-losses are being trigger?


----------



## Siciliano698

Entering the 9$ zone now...


----------



## Chris L

Ugly.


----------



## bmoney

Finally a day where we didn't end in the red.

Fraser19, we could see $8 who knows, but if you play poker, you will know to judge your hand by the risk vs reward.


----------



## Fraser19

Yup,
My biggest issue with COS is that I do not really understand the business plan. Pay out the majority of the earnings, reinvest little into the company. As I understand it COS makes all of its revenue from Syncrude. It looks like a lot of the posts say there is 25 years of usable reserves up there, so what happens after that? Hold a stock and collect dividends for 25 years then they close up shop?
Now I know that I can't find much of anything explaining what a company is planning on doing after 25 years, but a lot of the ones I watch are expanding and devolving new projects. COS does not seem to be doing that. So what happens when the Syncrude joint venture is all dried up?


----------



## AltaRed

Syncrude technically wraps up operations once its reserves are depleted, which is not necessarily in another 25 years. Could be more.

Syncrude is a one project Joint Venture operation based on the leases it holds. There may, or may not, be a desire by the JV partners to try and buy up new leases (assets) from other operators to keep the JV operation going OR they may collectively decide to process and upgrade oil sands ore from adjacent operators for a fee (like a midstreamer like PPL or ALA does). The upgrader is a real asset so custom upgrading seems likely (as a minimum). Regardless, it will need to dig into its remedial fund to start reclaiming its leases and tailings ponds as the mining operation winds down.

COS itself is a corporation with its main asset being its working interest in Syncrude BUT they could at some point in time decide to venture out and purchase ore leases of its own as yet another asset for itself. From my perspective that is not likely because COS has always been an income play rather than a growth stock.


----------



## Valueinvestor

I have a buy order placed for $6 and I'm hoping it will go down even lower so I can pick some more up at $4


----------



## hboy43

Toronto.gal said:


> ^ Makes perfect sense to me. So you actually do sell. :wink:


If you repeat that anywhere, I will deny it!

Can't be sentimental (or anchoring) at times like this. My wife only made 9% on her time with SU (plus dividends) when she was at what 35% at one point in the past year, but I was unwilling to crank up the leverage, having learned my lesson back in 08. So I followed the idea of selling that which fell a bit to buy that which fell a lot. Worked splendidly back in 08/09 when frankly I had no more cash resources available to me. Might be early in the oil story, but it should eventually work splendidly here too. If I am early, as noted above, I freed up close to $40K margin to have another go at oil if it continues down. Oil at $40 will probably get me double the shares for my same $50K if it comes to pass.

hboy43


----------



## Fraser19

Just crazy, watching this fall.
For only $500.00 you can buy enough shares to drip a full share each quarter.
For investors with a good time frame the opportunity to build a solid oil section in there portfolio is here.
CVC, SU, HSE, all trading at deep discounts and COS trading for next to nothing. Pick up those four and wait a decade, the gains could be incredible.

I am really pleased with myself for holding out to buy. Which I will continue to do for a while.


----------



## 1980z28

Cash is king

Just like shooting fish in a barrel


----------



## bmoney

COS is plunging at nearly twice the rate of decline in WTI. Stock could be worth pennies if the dire scenario's pan out.


----------



## bmoney

Finally some insider buying on COS but only a nibble of 10,000 shares at $10


----------



## Toronto.gal

hboy43 said:


> 1. If you repeat that anywhere, I will deny it!
> 2. So I followed the idea of *selling that which fell a bit to buy that which fell a lot.* Worked splendidly back in 08/09 when frankly I had no more cash resources available to me. Might be early in the oil story, but it should eventually work splendidly here too.


*1.* My lips are sealed now. :biggrin:
*2.* It takes a bit of calculation & thought, but could not agree more.

We'll survive this epic crash.


----------



## 1980z28

Buy Sell 
CANADIAN OIL SANDS LIMITED 
12:54:50 PM EST 
Symbol	T	Bid	Ask	Last	Change	Volume	FSI 
COS CA T	-	9.47	9.48	9.47	-0.63 (-6.24%)	5,041,930 
Bid Lots	27	Ask Lots	48	Earn. Per Share	1.30 
Day High	9.87	Day Low	9.34	Price/Earnings	7.2846 
Open	9.86	Yield	14.7835	Dividend	1.40 
52 Week High	24.68	52 Week Low	9.89	Ex-Dividend	19-Nov-2014

Over 5 M traded so far

Maybe oversold????


----------



## Siciliano698

a buy signal for me would be @ 7.50-8.00


----------



## My Own Advisor

Fraser19 said:


> Just crazy, watching this fall.
> For only $500.00 you can buy enough shares to drip a full share each quarter.
> For investors with a good time frame the opportunity to build a solid oil section in there portfolio is here.
> CVC, SU, HSE, all trading at deep discounts and COS trading for next to nothing. Pick up those four and wait a decade, the gains could be incredible.
> 
> I am really pleased with myself for holding out to buy. Which I will continue to do for a while.


Same. Waiting and watching. The timing might be perfect for the TFSA Jan. 1 contribution :biggrin:


----------



## Gabs

This is currently sitting at almost a 9% yield and un-hedged in today's oil environment. Could definitely see COS cutting/suspending the dividend again in the near future with another drop in shareholder price.


----------



## bmoney

I wouldn't buy any stock at a 10 year low that makes a product expected to increase in demand over our lifetime. Especially one's that don't pay dividends. Great way to lose money. Better to buy at 52 week highs because winners always go up.


----------



## atrp2biz

bmoney said:


> I wouldn't buy any stock at a 10 year low that makes *a product expected to increase in demand over our lifetime*. *Especially one's that don't pay dividends.* Great way to lose money. Better to buy at 52 week highs because winners always go up.


Huh?


----------



## Fraser19

I am also confused by this.
Buy at a 10 year low, has a product that is expected to increase in demand.

That sounds ideal.


----------



## 1980z28

always money up


----------



## rikk

Quite the buffet today ... I went with the sampler, XEG, so by default did try the COS. If it's up $0.30 tomorrow I'll return it ... it'll pay for this years Christmas Scotch :glee: :topsy_turvy:


----------



## peterk

bmoney is being bfunny.


----------



## bmoney

This will be my last post on COS for a while since obsessing over the daily price movements of a stock is not investing. Psychologically it helps not looking at my in the red holdings - call it capitulation of sorts. Vanguard did a study on retail investors and found the ones with the best returns where the investors that bought stock and forgot about it, basically had the least activity in their accounts, who would'a thought.

COS shareholder equity is $4.66 billion as of Sept 30, 2014 or approx $9.64/share. To the astute, I realize that shareholder equity is a good but not great approximation of book value, but I can't determine the net-tangible assets of COS. I would imagine intangible assets are less of a concern with a resource company, they own a plant, equipment and land leases with proven reserves - yes I can be wrong I'm not a CFA, but I've known CFAs to be wrong so there you go.

As of today's close COS is trading at practically book value. Does the market care? Not really. Book value can shrink due to debt, or decreases in retained earnings or where dividends exceed net-profit. So yes it could be worse in the short term, book value could go down. The question then becomes what is a fair price to pay for an oil company? That depends on YOUR expectation for the future outlook of oil, but to add some insight, at the depth of the 2009 recession oil companies traded at about a 1.1 x book value and at their peak about 3.3 x book value. So COS among many other oil companies either present extreme value, or what some would argue as value traps, and this is where you get to be a prescient savvy investors or a big sucker, now make your bets and remember to do your own home work, because this information is worth what you paid for it.


----------



## Fraser19

peterk said:


> bmoney is being bfunny.


I was hoping so, but on here....I never know. 

Either way the stock closed at 9.37. Which seems to be it's 10 year low.


----------



## My Own Advisor

rikk said:


> Quite the buffet today ... I went with the sampler, XEG, so by default did try the COS. If it's up $0.30 tomorrow I'll return it ... it'll pay for this years Christmas Scotch :glee: :topsy_turvy:


Go Macallan, 12-year, our favourite


----------



## cainvest

Fraser19 said:


> I was hoping so, but on here....I never know.
> 
> Either way the stock closed at 9.37. Which seems to be it's 10 year low.


Maybe a name change to Canadian Quick Sands would help, toss your money in and down it goes! 
Ah, it'll all be unicorns and rainbows in a while, I'm in on the COS rollercoaster and not worried at all. 
ok, maybe just a tiny bit. j/k


----------



## Valueinvestor

Fraser19 said:


> I was hoping so, but on here....I never know.
> 
> Either way the stock closed at 9.37. Which seems to be it's 10 year low.


I've been watching COS very closely. I still have my buy order in for $5 at which point it will be a screaming deal. Anything below that is gravy. They may cut the dividend entirely but I'd be ok with that as long as it means capital appreciation


----------



## leeder

Now that Valueinvestor raised it, I'm curious... if COS were to suspend its dividend, would people still be in this stock?


----------



## Fraser19

I would, in fact I would buy more if they did.
I would like to see them cut the dividend or at least reduce it more, I feel that the money paid out could be put to better use at this time. It would probably sink the stock further, I would buy and wait for the divided to come back. 
Then hopefully I can get Dripping on my merry way for the next 25 years.


----------



## Valueinvestor

If my buy order for $5 goes through (hope it does) and they eliminate the dividend I'd be quite content to buy more. I know when oil picks back up the dividend will come back. It will be tough going for the next couple months but COS was basically designed to spin off cash to shareholders via the dividend. A downturn in oil prices is a blip on the radar of 10-15 years. Yet another example of a great stock being hit hard that I fully believe will come roaring back when OPEC gets things straight


----------



## Pluto

http://www.marketwatch.com/story/the-surprising-bright-side-to-falling-oil-2014-12-10

Just an article with and up beat thesis. If it unfolds people buying oil stocks now will look like geniuses in a year or two. 
I'm not really an expert in oil so I'm wondering if anyone sees any flaw in the perspective outlined in the article.


----------



## jwsclark19

Hi everyone - Wanted someone's expert opinion on this . I think it's a good idea, but I'm not jumping on it right away, because I want to give myself enough time to weigh the risks etc. 

I'm getting married in July 2016, and I want to save some cash for the wedding. As it stands, I will have about 13k for the wedding. I was thinking....I have a line of credit which is only at 4% interest. I was thinking it might be a smart idea to take some money from that line of credit, and buy shares of COS with it. I'm thinking I will wait until they slash the divided again, and for the price to come down around $8. By July 2016, COS will probably be worth more, and I will be able to cash out a decent amount of money. Also, the dividends I would acquire over that time frame would be worth more than the amount of interest I paid on the LOC. 

Thoughts?


----------



## My Own Advisor

Keep your marriage before it starts, keep it in cash, you're just starting out  (honest opinion)


----------



## Chris L

Gambling. Put in what you can afford to not use.

If you want, put in $1500 and pray oil rebounds. You're not in any position to own individual stocks.


----------



## Synergy

My Own Advisor said:


> Keep your marriage before it starts, keep it in cash, you're just starting out  (honest opinion)


1+ :biggrin:


----------



## Pluto

Have a back yard wedding that cost 1 o 2K. put the rest in some good oil companies.


----------



## jwsclark19

Thanks Pluto, I just have to find a way to have that motion carried


----------



## protomok

@jwsclark19 - IMHO a 1.5 year time frame for an investment in any kind of equities is gambling. Investing in a highly cyclic sector like oil, and doing it right before getting married AND using margin is an extremely risky plan. For sure oil will rebound but it could take years, or could dip again in 2016. Have you considered GICs or a People's Trust account? You could get 3% interest in a People's Trust TFSA for example.


----------



## jwsclark19

These are all very good points. Actually, now that I'm thinking about it, the 13-16k I will have in cash SHOULD be enough for the wedding. What If I were to just take some cash from my LOC and put it in COS, if I'm able to wait however long it takes for oil to rebound? I wouldn't really need to take it out for my wedding. I have other savings that should really be enough for the wedding now that I think about it. It just seems like there's some opportunity here, and I don't want to miss out.


----------



## cainvest

Using a LOC for investing is a bad idea IMO as well as investing in oil with a short time frame.


----------



## Chris L

cainvest said:


> Using a LOC for investing is a bad idea IMO as well as investing in oil with a short time frame.


Get a 2nd job and use that. Everyone here is right. There will be other opportunities when the time is right. For all we know, you'll be ready to buy a house when prices are 50% off. If not, something else will be cheap.


----------



## Fraser19

I would not put that money into COS, I think COS is a good bet for returns. But I don't think it would be a good idea with the time frame on hand.

This is the way I see COS, it has dropped massively, no hedging and the dividend after its cut already has a massive yield. We don't know what the 1 year future of oil is right now and this stock could take years to recover. Looks like it hits a new 52 week low on a daily basis and doesn't seem to climb far above it throughout the day.


----------



## jwsclark19

Thanks for all of your helpful input guys! I think I will stick to putting my money away in the TFSA, which I currently have mostly invested in pretty safe stuff (still returning about 5%/year on average). Maybe I will just buy some shares of COS with my RRSP which is tucked away until I retire (about 36 years from now lol). Thanks again! I already own a condo too, which I will just continue to work away at paying off here in Winnipeg. Okay, no more hijacking of threads for me! Carry on!


----------



## rikk

WTI is currently at $59.86, COS makes ~$0.40/share at $75 WTI, at $0.06 per $change WTI COS is currently making ~[$0.50]/share ... I also add to the don't borrow money advice ... ok, a bit late :stupid:


----------



## Pluto

jwsclark19 said:


> Thanks Pluto, I just have to find a way to have that motion carried


You are welcome. If you do do the LOC thing, which is a bold move like what Templton did when he was a young man and paid off in spades, you might want to consider something more conservative like HSE. Or maybe split it between HSE and CPG. Anyway, borrowing to invest in beaten up companies that will survive, is way safer than borrowing to buy some over valued high flier like some do. To me, COS is more risky compared to the other two.


----------



## blin10

i agree with Pluto... also oil might stay low for a long time, so if you do borrow money you want to stick with the best to survive decline... with riskier stocks you'll make more if it works out but they are the once that might go under... I borrow money all the time to invest, but i always stick with stable big names



Pluto said:


> You are welcome. If you do do the LOC thing, which is a bold move like what Templton did when he was a young man and paid off in spades, you might want to consider something more conservative like HSE. Or maybe split it between HSE and CPG. Anyway, borrowing to invest in beaten up companies that will survive, is way safer than borrowing to buy some over valued high flier like some do. To me, COS is more risky compared to the other two.


----------



## protomok

I'm curious if anyone else is willing to admit how beat up their COS shares are  I've got an avg. purchase price of $21.17...down 56% in my wife's RRSP  Actually this might make for an interesting thread - "how badly are your oil shares beaten up", or "how to explain to your wife that some holdings are down 50+% but it's OK!"


----------



## Chris L

I'm down about 20% from 11.9 on COS which isn't so bad. On LRE on the other hand, down from 2.40. Ugh! I'm going to snap another stock up when oil hits bottom and things should work out just fine


----------



## doctrine

Oil still going down.. COS could trade cheaper. Someone has to cut production. Today, Cenovus announced their budget. 

_In 2015, Cenovus is planning capital investment of between $2.5 billion and $2.7 billion. The company expects total cash flow for the year of between $2.6 billion and $2.9 billion, based on a West Texas Intermediate (WTI) price of between US$74 per barrel (bbl) and US$81/bbl. The company expects moderate production growth in 2015 of approximately 9% for oil sands production and about 4% for total oil production._

Summary: growth in the highest cost oil, and based on $74-81 oil, which is a long way away, so in the meantime, they will be borrowing for capital expenditures and the dividend. Just like COS.

It just shows you how stubborn everyone is, but also how it's not over yet, at least I don't think so..WTI below $60 now.


----------



## dubmac

protomok said:


> I'm curious if anyone else is willing to admit how beat up their COS shares are  I've got an avg. purchase price of $21.17...down 56% in my wife's RRSP  Actually this might make for an interesting thread - "how badly are your oil shares beaten up", or "how to explain to your wife that some holdings are down 50+% but it's OK!"


Protomok - I hold COS - I purchased it about 4 yrs ago., for around 25 per share. I'm down some 45% on COS (dividends included!). Thankfully I bought RY (low) and it's up 60% from the purchase price - and dripping away. 

I'll wait and see what 2015 brings for oil prices...but clearly, COS is a dog. I'll set a price target and sell it all in the spring at a significant loss.


----------



## Jungle

down 52%, but doesnt include dividends since 2011.


----------



## bettyboop

I'm down 51.50% on my original shares and 45.90% on the additional shares I just bought a short time ago, also down 41 % on CPG and 54% on Husky which still hadn't recovered from the last recession before this fall.


----------



## Echo

Down 48.94% with an average cost of $18.19. Ooof.


----------



## My Own Advisor

Same as you Echo, -49%, cost just over $18.

How does indexing look now?


----------



## hboy43

dubmac said:


> I'll wait and see what 2015 brings for oil prices...but clearly, COS is a dog. I'll set a price target and sell it all in the spring at a significant loss.


I like dogs. NCX, NBD, MX were all dogs at one point, but I heard all the whimpering, "please come scratch me behind the ears", "a pat on the head". The last ~ $10K buy of NCX in February 2009 was a 4 bagger in under 2 months. MX and NBD are now neck and neck for being my largest holdings. NBD and NCX were down > 90% from my first buy price and > 50% from my ACB. MX was off by 75% its recent high and about 30% under my ACB.

Buying (in hindsight) high is not a (good) reason to avoid buying low now.

Anyhow, you see 3 legged mutt, I see best in show.

Wwoff. "Hello COS". That's a good boy. Stop sniffing TCK.B's ***.

hboy43


----------



## Siciliano698

next stop for crude oil is $55. COS approaching $8 a share.


----------



## My Own Advisor

Crazy...


----------



## Siciliano698

Look @ those american oil & gas companies plenty of bargains too.... could be worth adding with a usd rising and a cad declining...


----------



## Toronto.gal

hboy43 said:


> I like dogs. *Buying* (in hindsight) *high* is *not a (good) reason to avoid buying low* now.


Sure, why I focus on existing ACBs as well, & new buys at whopper sale events. However, not all dogs are created equal. Some losses are meant to be trimmed not DCAed.

Since you mentioned high prices, one should keep in mind what can happen during epic crashes, ie, opportunistic takeovers, that can result in heavy losses, if one just bought/held potential acquiree at high prices. TLM is one such example.

I learned that lesson with UUU a while back; made small profit after the Russians privatized UUU on the shares I had held, but would have lost if I had not averaged down.


----------



## dubmac

Toronto.gal said:


> However, not all dogs are created equal. Some losses are meant to be trimmed not DCAed.


+1.


----------



## banjopete

It seems there is a distinct disconnect and emotions are running things currently. I'll gladly miss "the bottom" and watch with cash until there's some sort of stabilization. No sense to me in throwing more money in the pile while the stock price seems to have to no sticking point on it's way down past 60% in a couple of months?


----------



## webber22

KaeJS said:


> I'm thinking about buying this one tomorrow.


I sold mine back in 2012 when this was posted lol


----------



## none

Reading the first 20 pages of this thread confirms my thinking about investing: people generally invest with their gut and make up signals in the noise.


----------



## 6811

none said:


> Reading the first 20 pages of this thread confirms my thinking about investing: people generally invest with their gut and make up signals in the noise.


+1 Couldn't agree more!


----------



## fatcat

none said:


> Reading the first 20 pages of this thread confirms my thinking about investing: people generally invest with their gut and make up signals in the noise.


+2 ... in the end this is all it _ever_ is ... 

you want numbers, i'll give you numbers ... what kinda numbers do ya want ?
the good numbers, the bad numbers, the high numbers and the low numbers

i got em all ...


----------



## Valueinvestor

When oil gets to $50 I could see COS getting down to $5 or $6. Until then I can see it continuing to hover around $8. Of course if oil gets that low everything else will be down as well. In a few years we will look back and think, why didn't I buy more!!


----------



## gladaki

Valueinvestor said:


> When oil gets to $50 I could see COS getting down to $5 or $6. Until then I can see it continuing to hover around $8. Of course if oil gets that low everything else will be down as well. In a few years we will look back and think, why didn't I buy more!!


They are already 9$, I dont think it went that low even in 2008 recession. 
I am in for some shares  next week..I am in for long term doesnot really matter if it even goes to 6$ for short term


----------



## supperfly17

gladaki said:


> They are already 9$, I dont think it went that low even in 2008 recession.
> I am in for some shares  next week..I am in for long term doesnot really matter if it even goes to 6$ for short term


What makes you think this company will survive the long term?


----------



## gladaki

Siciliano698 said:


> Look @ those american oil & gas companies plenty of bargains too.... could be worth adding with a usd rising and a cad declining...


Wont u be paying too much considering CAD to US is all time low


----------



## gladaki

supperfly17 said:


> What makes you think this company will survive the long term?


Production cost of Syncrude is around 44-47$ per barrel...
looking at their assets, I wonder why you think it wont able to survive..

http://www.cdnoilsands.com/files/Presentations/49-North-Resource-Conf_SanFran_v-5_PDF.pdf

Syncrude has 25% interest from imperial and 12% from Suncor. Considering this its a good price for such a high value assets.

I understand investing in IMO or SU is better strategy but I dont find any reason why COS wont able to survive. Worst they can be a take over target in future.
20$ i
CPG is also on my list....


----------



## Chris L

This sell off in oil has way overshot fundamentals. Perhaps the tax selling and the lack of confidence in the markets. Regardless, it's more than a little insane. I wouldn't be terribly surprised to see a quick recovery for oil. No one is making money with oil at these values - they're all suffering. It's ultimately in the best interest of all producers for oil prices to go up. That means it will. Ultimately. COS has a lot of value which the stock currently does not reflect. 

I'd be interested in hearing reasons why it wouldn't survive also. All ears.


----------



## AltaRed

COS can handle pretty low prices for some time BUT it depends how long and how deep the crisis goes. If times get tough, they can use their credit facilities to pay for capex needs (equivalent to circa $10/B or $400 million for the year) and they can cut the dividend to zero. It gets tougher if and when oil prices drop to the point where revenue does not pay for cash operating costs. At some level, e.g. $40? $30? $50?, they will not be able to access enough debt to keep the lights on for very long. I suspect there are some provisions in the JV agreement for default when a working interest owner can no longer pay their bills. 

But as everyone knows, many other producers will be in worse shape by then and will have shutdown operations at least temporarily. Several oil producing countries who are maxed in their borrowing capability would be in very rough shape..... civil unrest, a coup, etc. In short, I don't ever see a scenario where COS would have to go into bankruptcy proceedings.


----------



## gladaki

AltaRed said:


> COS can handle pretty low prices for some time BUT it depends how long and how deep the crisis goes. If times get tough, they can use their credit facilities to pay for capex needs (equivalent to circa $10/B or $400 million for the year) and they can cut the dividend to zero. It gets tougher if and when oil prices drop to the point where revenue does not pay for cash operating costs. At some level, e.g. $40? $30? $50?, they will not be able to access enough debt to keep the lights on for very long. I suspect there are some provisions in the JV agreement for default when a working interest owner can no longer pay their bills.
> 
> But as everyone knows, many other producers will be in worse shape by then and will have shutdown operations at least temporarily. Several oil producing countries who are maxed in their borrowing capability would be in very rough shape..... civil unrest, a coup, etc. In short, I don't ever see a scenario where COS would have to go into bankruptcy proceedings.


They probably need DRIP now...I wonder when they will restart it..


----------



## AltaRed

DRIP only works in this situation if they dilute shareholder equity with new shares issued to cover the DRIP. That is a principle many investors will not accept, i.e. DRIPs should always be funded by shares purchased on the open market to avoid shareholders being paid dividends with their own money.

Added: However, in this specific situation, this could be a life saving interim situation for a year or so until oil prices recover. But will they then buy back those shares once they return to financial health?


----------



## OurBigFatWallet

Chris L said:


> This sell off in oil has way overshot fundamentals. Perhaps the tax selling and the lack of confidence in the markets. Regardless, it's more than a little insane. I wouldn't be terribly surprised to see a quick recovery for oil. No one is making money with oil at these values - they're all suffering. It's ultimately in the best interest of all producers for oil prices to go up. That means it will. Ultimately. COS has a lot of value which the stock currently does not reflect.
> 
> I'd be interested in hearing reasons why it wouldn't survive also. All ears.


I agree and I think this will pass with time. The markets lately seem to be more about emotion than logic. I can't see it lasting too long since 10/12 of the OPEC members are not profitable at these levels. I could see oil going back up to $75-80/barrel in the near future. Of course if that happens the price at the pumps will shoot up 25% immediately


----------



## fatcat

Chris L said:


> This sell off in oil has way overshot fundamentals. Perhaps the tax selling and the lack of confidence in the markets. Regardless, it's more than a little insane.


perhaps we are caught in a game of chicken between iran and the saudis and venezuela and the rest ... i can see much value to a lower "oil tax" but so many entities are pegged to 80-100 oil that the havoc is worse than the benefits of lower gas costs i think


----------



## gladaki

OurBigFatWallet said:


> I agree and I think this will pass with time. The markets lately seem to be more about emotion than logic. I can't see it lasting too long since 10/12 of the OPEC members are not profitable at these levels. I could see oil going back up to $75-80/barrel in the near future. Of course if that happens the price at the pumps will shoot up 25% immediately


http://www.bloomberg.com/news/2014-...-change-output-even-if-price-drops-to-40.html

With news like that I guess we are in for atleast one year of cheap oil


----------



## Pluto

Chris L said:


> This sell off in oil has way overshot fundamentals. Perhaps the tax selling and the lack of confidence in the markets. Regardless, it's more than a little insane. I wouldn't be terribly surprised to see a quick recovery for oil.
> All ears.


Based on what I read in the media, I tend to agree with you. What I read is basically this:
A. Producers are going flat out. 
B. Consumption/demand isn't that far below flat out production, and demand keeps inching up.
C. Production from wells from fracking drop off quickly. 
D. Permits for drilling in US for next year down 50%. I assume it is similar in most places where cost of exploration, drilling, and production is high. 

From that perspective it looks like this could all blow over pretty quick - the essence being that exploration drops, production form a lot of wells taper off quickly, and demand still inches up. 
So what could happen to interfere with that scenario? Any ideas? Major recession implying demand contraction?

For what it is worth, the oil futures don't presently have any green showing until 2017 - 2022 time frame. But they just go with the present trend and that could change fast. 

If it is really true that cost of production for COS is 45-47, it should be fine. Even so it still seems to be in the middle of the pack in terms of risk.


----------



## HaroldCrump

gladaki said:


> considering CAD to US is all time low


Not all time lows. Maybe 5 year lows.
In 2009, CAD has dipped well below 80c.


----------



## Nemo2

HaroldCrump said:


> Not all time lows. Maybe 5 year lows.
> In 2009, CAD has dipped well below 80c.


August 27, 1998 the Canadian dollar reached a low of 63.1¢ U.S.

(I recall, earlier that year when the Canadian dollar was only marginally higher, being in the central Baja..........shopkeeper, and because of his accent I wasn't sure if he meant a) or b), said:

a) "Your money is worth less"

b) "Your money is worthless" )


----------



## HaroldCrump

You might also recall that it used to be known as the "_Northern Peso_" at that time.

Thanks to Carney & Poloz, we might be deserving of that phrase again...


----------



## Nemo2

HaroldCrump said:


> You might also recall that it used to be known as the "_Northern Peso_" at that time.


I also seem to recall Mr Chretien telling us that that was a good thing since it would stimulate Canadian business/industry/trade.


----------



## HaroldCrump

That period was basically the beginning of the end of Canada's manufacturing industry.
Weakening a currency is a cop-out when it comes to boosting exports.


----------



## Nemo2

HaroldCrump said:


> That period was basically the beginning of the end of Canada's manufacturing industry.
> Weakening a currency is a cop-out when it comes to boosting exports.


Indeed.


----------



## sags

A lower Canadian dollar certainly served the auto industry well for many years, but the benefits of a lower dollar are vastly outweighed by the negative consequences of bad trade policy.

The decline in manufacturing in North America correlates almost identically to the rise of so called "free trade" with China and other countries where labor is plentiful and cheap.

The architects of free trade knew that North America would lose manufacturing jobs, but forecast that on balance, a larger number of jobs would be created in transportation of the goods from the ship to the store.

The introduction of inter-model containers eliminated the need for many of those jobs and ships, trucks and rail cars are loaded by a single crane and a couple of workers, rather than the hundreds of thousands of workers that were envisioned to be hand loading the goods.

The Chinese have benefited greatly from free trade............North Americans consumers have benefited from lower prices............corporations benefited from free trade.

North American workers were the big losers.......as was the quality of the products, and the loss of intellectual property and the ability to manufacture.

Until a more balanced and fair trade policy is adopted, I expect manufacturing will remain in the hands of the Chinese.

Robert Reich produced a documentary "Inequality for All" which covers the rise and fall of manufacturing and the middle class.

http://inequalityforall.com/

The positive effects of a lower Canadian dollar are much less pronounced now that our manufacturing base is largely barren.


----------



## protomok

Hi Sags,

Very interesting documentary, I started another thread for it here - http://canadianmoneyforum.com/showthread.php/30010-Inequality-For-All-Documentary. BTW it's available on Netflix.


----------



## HaroldCrump

sags said:


> A lower Canadian dollar certainly served the auto industry well for many years


A weak CAD$ cuts both ways - it makes price of our exports cheaper for those with stronger currencies such as the US, UK, etc. but it hurts us on the capital imports side.
The result was that for years, Canadian manufacturers neglected to improve processes, technology, and automation.

Weakening one's currency essentially subsidizes, protects, and masks an uncompetitive or high cost industry (which we were/still are).



> but the benefits of a lower dollar are vastly outweighed by the negative consequences of bad trade policy.


Again, trade works both ways.
You cannot keep selling your stuff to others without importing their stuff in return.
Everyone wants to export, but it doesn't work that way.

"Free" trade with China or the E/M was not a matter of choice, but one of necessity.
Canada, US & Europe had no markets left to export to unless they helped develop the markets via trade.



> Robert Reich produced a documentary "Inequality for All" which covers the rise and fall of manufacturing and the middle class.
> The positive effects of a lower Canadian dollar are much less pronounced now that our manufacturing base is largely barren.


I haven't seen that documentary yet, but will do so.
In this meantime, this article was just published.

You may want to read it...I am sure you can identify with it, and it will bring back memories for you from the manufacturing glory days of the 1960s - 1980s in Ontario.

*Reforging Ontario - Given manufacturing’s collapse, can the province spark an economic renaissance?*

This article also touches upon what I said above about a weak currency and free trade i.e. how the explanations are not so straightforward, and it cuts both ways.


----------



## Toronto.gal

webber22 said:


> I sold mine back in 2012 when this was posted lol


Funnier was that you quoted a post from May/2012, that has nothing to do with the current situation. I didn't get it, what was the point? Looking at the chart, back in 2012, that stock had pretty much flatlined the entire 2012 [and 2013], but not before dropping around -40% from the previous year, so no surprise if people were buying then [rather than selling]. However, if you sold in 2012, does that mean you bought in the $30's the previous year? :biggrin:

*gladaki:* re: your post 673, the stock hit the $50's in June/08, then dropped to the low of $16.65 in early 09.

*Nemo:* C) we don't accept $CAD, and this was when it was higher than the $USD.


----------



## Nemo2

Toronto.gal said:


> *Nemo:* C) we don't accept $CAD, and this was when it was higher than the $USD.


I'm still chafing about not loading up on US$s when ours was at a premium.........slaps forehead.


----------



## sags

I agree with "fair" trade Harold.................but the Chinese don't want anything from us except raw resources.

PM Harper went over for a chat...........and the CEO of Alibaba joked about buying some lobsters from us..........or was he joking ?

They are spinning our crank with empty promises of access to a huge consumer base..........and then set up rules prohibiting imports.

If you want to sell there..........you have to manufacture there.

We don't force the same rules because a tidal wave of cheap plastic stuff keeps everyone happy.

Anyways................off topic and back to oil.............down again today.


----------



## sags

Is it possible the Saudis have hedges in place for their oil ?

Or do they pump it cheap enough, that it isn't worth it to them ?

I read they pump it out of the ground for 4 dollars a barrel.


----------



## HaroldCrump

There used to be (still is) a saying that in Saudi Arabia if you stick a straw into the ground, oil flows out.
You don't even need to suck...


----------



## sags

Thanks for the link Harold.

It is a long article full of information and will take a awhile to fully digest.

The author is wrong on the history of EMD though. I worked there and my brother worked there until just before they closed.

Locomotive production never increased very much, as there was no room in the plant to expand for many years. Once the Terex line was removed, GM fabricated some locomotive "noses" in the space and sent them to the US for assembly.

The employment level was maintained for awhile, but started shrinking. It was largely supported by the introduction of the LAV military units. There was a whole plant devoted to their production. I believe General Dynamics still runs the plant, but am not sure.

GM was happy to take from the government in more ways than one.........and have enjoyed government "projects" for many years.

GM Diesel was sold many years ago to Berkshire Hathaway fund..........who then sold it to General Dynamics............who sold it to Caterpillar.

With each sale............production was extracted from the buildings and sold off.

Basically, the different corporations picked the bones clean and at the end Caterpillar was happy to abandon the plant.

Free trade wasn't specifically to blame...........because fortunately we weren't counting on the Chinese to build military units for us.

The collapse of a 50 plus year old business...........was more the negative effects of vulture capitalism, than anything else.


----------



## webber22

More sour news about a sour water treater

http://www.cdnoilsands.com/Media-Ce...pdate-to-2014-Production-Outlook/default.aspx


----------



## Valueinvestor

Another drop today that's presumably related to oil going down further. I think it will start to rebound at around $5 or $6 but by then there will be lots of other bargains available


----------



## Fraser19

webber22 said:


> More sour news about a sour water treater
> 
> http://www.cdnoilsands.com/Media-Ce...pdate-to-2014-Production-Outlook/default.aspx


So what I take from that is there is going to be lower production for this year.
Also this month there will be a shortage of production due to lack of sour water?

Not totally sure what this means, could you dumb it down for me?


----------



## AltaRed

Sour water coming out of the production process has to be treated before that water is recycled. If part of that process is down, you can't just dump the excess volumes. It either has to be stored in tanks or throughput of the entire plant has to be cut back to match remaining processing capacity. Same thing happens in a refinery when a coker or hydrocarbon cracker goes down. There is a domino effect on all other processes.

Added: I was wondering why there was so much maintenance capex in the 2015 forward guidance document circa Dec 4. Then I happened to be looking at the Imperial Oil site this weekend and I saw comments that said one of the focuses for 2015 was to improve Syncrude reliability. Somehow the Syncrude organization had allowed their facilities to age too much before bringing in XOM/IMO to provide expertise. Hope the latest is not a sign of continued underperformance for some of 2015.


----------



## My Own Advisor

Crazy this is now a $9 or $8 stock. P/E now 7. 

I keep wondering with COS, BTE, and a few others, if you simply bought a bunch, held and just rode out the storm how things might be in 5-10 years time? Is this, could this, be one of those moments where if you have the guts, maybe some investors do, you back up the truck and fill it up? 

It would be nice to have deep pockets and some risk to try, I'm simply too risk adverse to be putting lots of money on a few bets. 

I will be buying more in a few weeks though, just not thousands of shares like I suspect some people can afford to do and might do.


----------



## Synergy

We could be in for a little more punishment today, futures looked awfully low (down over 2%) this morning. I may pick away at XEG over the near term and wait for the New Year until I get back into some individual names.


----------



## Toronto.gal

My Own Advisor said:


> 1. if you simply bought a bunch, held and just rode out the storm how things might be in *5-10 years time? *
> 2. I will be buying more in a few weeks though, just *not thousands of shares *like I suspect some people can afford to do and might do.


*1.* With a bit of logic/optimism/patience, I don't think it's difficult to predict the outcome by such a time [talking about oil prices, not company specific], and if held for that period, with assuming a decent yield, one's investment could be covered in said time period with said dividends at such depressed prices.

*2.* Who cares about the pockets of others?! Consider that any investment amount would be up considerably once prices were to recover from where we are today, to its original price just b4 the crash, ie, in this case $7/$22, what % is that?! I'm not saying to buy this stock, just that a longer-term horizon should be the focus for anyone buying, because of the recovery/upside potential.

I noticed yesterday that at $176+, this stock had a 5:1 split in 06. wow.


----------



## Nemo2

Toronto.gal said:


> I noticed yesterday that at $176+, this stock had a 5:1 split in 06. wow.


I purchased COS.UN around June 1997 @~ $24 and sold just prior to the split taking effect.......thank you Dunnery Best (who wrote an NP article (before I had internet) that persuaded me to buy.)


----------



## gladaki

Toronto.gal said:


> *1.* With a bit of logic/optimism/patience, I don't think it's difficult to predict the outcome by such a time [talking about oil prices, not company specific], and if held for that period, with assuming a decent yield, one's investment could be covered in said time period with said dividends at such depressed prices.
> 
> *2.* Who cares about the pockets of others?! Consider that any investment amount would be up considerably once prices were to recover from where we are today, to its original price just b4 the crash, ie, in this case $7/$22, what % is that?! I'm not saying to buy this stock, just that a longer-term horizon should be the focus for anyone buying, because of the recovery/upside potential.
> 
> I noticed yesterday that at $176+, this stock had a 5:1 split in 06. wow.


Pardon me for such a stupid question.
But what is 5:1 split


----------



## thepitchedlink

My Own Advisor said:


> Crazy this is now a $9 or $8 stock. P/E now 7.
> 
> I keep wondering with COS, BTE, and a few others, if you simply bought a bunch, held and just rode out the storm how things might be in 5-10 years time? Is this, could this, be one of those moments where if you have the guts, maybe some investors do, you back up the truck and fill it up?
> 
> It would be nice to have deep pockets and some risk to try, I'm simply too risk adverse to be putting lots of money on a few bets.
> 
> I keep thinking the same thing.....is this one of those times........


----------



## Nemo2

gladaki said:


> Pardon me for such a stupid question.
> But what is 5:1 split


Not stupid at all.

http://www.investopedia.com/terms/s/stocksplit.asp


----------



## Fraser19

If you owned one stock, they split it and turned your one stock into 5.
Also the price of the stock was divided by 5.

In the end the total value is the same.


----------



## My Own Advisor

Thanks for the logic T.Gal.

You're right, especially the "pockets of others" comment. I can only control what I can control.


----------



## gardner

Toronto.gal said:


> if held for that period, with assuming a decent yield, one's investment could be covered in said time period with said dividends at such depressed prices.


The risk I see is that they will do a Talisman style deal and sell out my $17 to $20 interest for $6 and leave me with nothing. Yeah, it might pop from $4 to $6 on the last day and make some day traders happy, but a long term investor like me will just get hosed. Just because *I* have patience and some faith that energy prices will recover in the 18-36 month time-span doesn't mean some shark can't steal the value off of me in the mean time.


----------



## hboy43

gardner said:


> The risk I see is that they will do a Talisman style deal and sell out my $17 to $20 interest for $6 and leave me with nothing. Yeah, it might pop from $4 to $6 on the last day and make some day traders happy, but a long term investor like me will just get hosed. Just because *I* have patience and some faith that energy prices will recover in the 18-36 month time-span doesn't mean some shark can't steal the value off of me in the mean time.


I hate the buy out law and consider forced takeovers to be legalized theft. But it is what it is.

If you are willing to hold at $9 with an ACB of $20, then you should also be willing to buy more. Otherwise, you don't really believe the shares are worth more and should take a buy out with a smile. Put the same dollars in and lower the ACB to ~ $13? It is just rebalancing, something you should be doing anyhow.

I have the same problem with TCK.B. First buy was at $24, last was at $13, three in between, ACB just under $18 . There might be another buy (or two) yet, who knows. It is my only mining company and 3.7% of portfolio, so developments are inconvenient in the short term but not disasterous. That is just the nature of investing, there are short term losses.

hboy43


----------



## dogleg

I have to think Toronto Gal is right and now is a buying opportunity for oil. Is it realistic to think oil stocks are going to remain at half-price? Unless the Jim Rickards of the world and their 'sky is falling' message is believable then it surely makes sense to expect oil to rather quickly recover to more 'normal' values. The international oil price war with players like Russia, S. Arabia , U.S., etc. likely won't go on long. Isn't it just another power game to see who is going to be the big player and have the most control? I may be wrong but when I see stocks like COS and BTE down by 60% I think buy.


----------



## Toronto.gal

hboy43 said:


> 1. *Legalized theft. * But it is what it is.
> 2. If you are willing to *hold at $9 with an ACB of $20, then you should also be willing to buy more.*
> 3. Put the same dollars in and *lower the ACB to ~ $13?* It is just rebalancing, something you should be doing anyhow.
> 4. there are *short term losses.*


*1.* Indeed it's opportunistic theft at times. Except we don't complain much when we're the thieves, do we? 
*2.* +1, if you believe the shares are worth more, otherwise, trimming one's losses could be better approach than watching a falling knife, or waiting in fear for that 'shark' advance. If your ACB was $20, as of today, you took your shares for a -60% ride [$20/$8].
*3.* At $20 ACB, assuming a $10 takeover, you would lose -50% [excluding dividends]. At an ACB of $13 as mentioned above, with same takeover, you would be down -35%. Which would be easier/faster to recover from? 
*4.* With the right adjustments/strategies, losses can be recovered in shorter terms as well, but not by just sitting/waiting without doing any alterations.


----------



## Toronto.gal

Nemo2 said:


> I *purchased COS.UN around June 1997 @~ $24 and sold just prior to the split taking effect*.......thank you Dunnery Best (who wrote an NP article (before I had internet) that persuaded me to buy.)


So oil made you retire early, not an inheritance. Bully for you! [in a very positive way]. :tongue:


----------



## Synergy

dogleg said:


> I have to think Toronto Gal is right and now is a buying opportunity for oil. Is it realistic to think oil stocks are going to remain at half-price? Unless the Jim Rickards of the world and their 'sky is falling' message is believable then it surely makes sense to expect oil to rather quickly recover to more 'normal' values. The international oil price war with players like Russia, S. Arabia , U.S., etc. likely won't go on long. Isn't it just another power game to see who is going to be the big player and have the most control? I may be wrong but when I see stocks like COS and BTE down by 60% I think buy.


Even if the stocks continue to fall a little bit, in 5-10-15 yrs it will likely turn out to be a great buying opportunity at these levels.


----------



## Nemo2

Toronto.gal said:


> So oil made you retire early, not an inheritance. Bully for you! [in a very positive way]. :tongue:


In a way......'Saving in Saudi' (using _their_ oil money) enabled me to quit work at the end of 1988........almost a decade before I heard of COS. :biggrin: (COS just sweetened the pot.)


----------



## Pluto

thepitchedlink said:


> My Own Advisor said:
> 
> 
> 
> Is this, could this, be one of those moments where if you have the guts, maybe some investors do, you back up the truck and fill it up?
> 
> .
> 
> 
> 
> The answer is Yes.
> 
> But don't buy a bunch of crap: eg drillers or producers with a huge pile of debt. Buy quality and hang on. If you don't know what to buy, buy xeg.
> buy over time, say in thirds. Don't have a specific date in mind when you will buy, rather, try to buy on days where the price is selling down from the previous day(s).
> 
> If you are really risk averse, you buy quality when an industry is in a crisis = Buy on bad news.
> The real risk in oil was signaled over the last year or so when it was occasionally reported in the news, that the US was producing more oil than it ever had in its history = Sell on good news, or if one did not own any oil stocks then, stay away.
> 
> People who are really risk averse are suspicious of buying when things are wonderful, and eager to buy (quality) when a crisis strikes.
Click to expand...


----------



## gladaki

Synergy said:


> Even if the stocks continue to fall a little bit, in 5-10-15 yrs it will likely turn out to be a great buying opportunity at these levels.


Its all come down to who will survive and who wont ?
MEG energy ( Great assets, great Technology Debt:22X cash flow)
BTE (Giid assets, Payout Ratio4:	160.00%)


----------



## Synergy

gladaki said:


> Its all come down to who will survive and who wont ?
> MEG energy ( Great assets, great Technology Debt:22X cash flow)
> BTE (Giid assets, Payout Ratio4:	160.00%)


Agreed, if oil continues to slide that is a huge risk. That's one reason why I sold all my energy holdings (COS, BTE & CPG) for tax loss purposes in the end of November and have switched to picking away at XEG. XEG is equal weight and should pop pretty nice when oil prices start to rebound. I will however be looking at getting back into some individual names come the New Year and will definetely take a hard look at some of the financials. Many of these names do appear to have been beaten down unecessarily, but that will all depend on where oil decides to bottom out at. Time will tell...

Luck was on my side this year, somehow I broke even on my energy holdings for the year - at least so far (took profits earlier in the year).


----------



## thepitchedlink

Pluto said:


> thepitchedlink said:
> 
> 
> 
> The answer is Yes.
> 
> But don't buy a bunch of crap: eg drillers or producers with a huge pile of debt. Buy quality and hang on. If you don't know what to buy, buy xeg.
> buy over time, say in thirds. Don't have a specific date in mind when you will buy, rather, try to buy on days where the price is selling down from the previous day(s).
> 
> If you are really risk averse, you buy quality when an industry is in a crisis = Buy on bad news.
> The real risk in oil was signaled over the last year or so when it was occasionally reported in the news, that the US was producing more oil than it ever had in its history = Sell on good news, or if one did not own any oil stocks then, stay away.
> 
> People who are really risk averse are suspicious of buying when things are wonderful, and eager to buy (quality) when a crisis strikes.
> 
> 
> 
> Yup, I like this idea....just hard to reason with not just buying XEG and to heck with everything else.....
Click to expand...


----------



## gladaki

Synergy said:


> Agreed, if oil continues to slide that is a huge risk. That's one reason why I sold all my energy holdings (COS, BTE & CPG) for tax loss purposes in the end of November and have switched to picking away at XEG. XEG is equal weight and should pop pretty nice when oil prices start to rebound. I will however be looking at getting back into some individual names come the New Year and will definetely take a hard look at some of the financials. Many of these names do appear to have been beaten down unecessarily, but that will all depend on where oil decides to bottom out at. Time will tell...
> 
> Luck was on my side this year, somehow I broke even on my energy holdings for the year - at least so far (took profits earlier in the year).


Horizons S&P/TSX Capped Energy Index ETF (HXE-TSE).. with lower Management ratio and have same index


----------



## gladaki

Synergy said:


> Agreed, if oil continues to slide that is a huge risk. That's one reason why I sold all my energy holdings (COS, BTE & CPG) for tax loss purposes in the end of November and have switched to picking away at XEG. XEG is equal weight and should pop pretty nice when oil prices start to rebound. I will however be looking at getting back into some individual names come the New Year and will definetely take a hard look at some of the financials. Many of these names do appear to have been beaten down unecessarily, but that will all depend on where oil decides to bottom out at. Time will tell...
> 
> Luck was on my side this year, somehow I broke even on my energy holdings for the year - at least so far (took profits earlier in the year).


Gibson Energy & WCP


----------



## Synergy

Thanks for the info / advice gladaki.



gladaki said:


> Horizons S&P/TSX Capped Energy Index ETF (HXE-TSE).. with lower Management ratio and have same index


I'm not all that familiar with HXE, I'll have to take a closer look. I was under the impression it was a covered call strategy and would peform better in a range bound / sideways market and that XEG would outperform if we get a rebound in oil prices since HXE would have limited upside potential. I never took a good look at HXE so I'm only guessing here.



gladaki said:


> Gibson Energy & WCP


2 names that I do have on my watch list - thanks.


----------



## gladaki

Synergy said:


> Thanks for the info / advice gladaki.
> 
> 
> 
> I'm not all that familiar with HXE, I'll have to take a closer look. I was under the impression it was a covered call strategy and would peform better in a range bound / sideways market and that XEG would outperform if we get a rebound in oil prices since HXE would have limited upside potential. I never took a good look at HXE so I'm only guessing here.
> 
> 
> 
> 2 names that I do have on my watch list - thanks.


Thanks for info on HXE..I need to look in to it as well. I always learn so much from you guys here.


----------



## dogleg

I generally invest in Suncor but some of you seem to like XEG . If You had to choose one amongst SU, COS, BTE and XEG what would you pick and maybe explain why. Thanks.


----------



## GoldStone

Synergy said:


> XEG is equal weight and should pop pretty nice when oil prices start to rebound.


XEG is not equal weight. It uses traditional market-cap weighting. SU and CNQ represent 38% of XEG assets. 

BMO ZEO is equal weight. Unfortunately, includes some pipelines in addition to oil and gas. It didn't drop as much as XEG.


----------



## thepitchedlink

dogleg said:


> I generally invest in Suncor but some of you seem to like XEG . If You had to choose one amongst SU, COS, BTE and XEG what would you pick and maybe explain why. Thanks.


Now, I'm no expert...far from it....just getting started in all this self investing...I like BTE, SU and COS and own 2 of them.....but XEG just seems so much easier. I don't think there is any issue owning each individual stock...but for me, my "core" assets are held in the ETF's...seems safer and more comfortable, to me anyway. XEG and ZEO are down, so I like to buy them and hold 'em. But when I also see some of the main holding of these ETF's getting "crushed" as in the last few weeks....I can't help but think that grabbing some of those is also a good idea.....I seem to really enjoy buying stocks "on sale", and this month, oil is on sale!!!! The ETF's are a great product...but let's face it..boring. Reading about, learning, chatting, researching about there other companies is fun....XEG/ZEO are not fun, just smart:biggrin: That's my .02$ anyway


----------



## Synergy

GoldStone said:


> XEG is not equal weight. It uses traditional market-cap weighting. SU and CNQ represent 38% of XEG assets.
> 
> BMO ZEO is equal weight. Unfortunately, includes some pipelines in addition to oil and gas. It didn't drop as much as XEG.


Yup, sorry - that's what I meant. It's the influence of the smaller cap stocks within XEG that I felt could give it a little more upside, but also more potential downside risk. ZEO is mainly large cap right?


----------



## AltaRed

Just looked up ZEO holdings. 16 holdings. Current weightings being Enbridge largest at 11.17% and smallest being Penn West at 2.21% as of Dec 15th. 3 of 4 top holdings are pipelines with IMO in there. Clearly shows who has fallen the hardest over the year - remarkable in itself. When they re-balance........ jumping jeezus murphy... will that ever cause a re-shuffling of the deck.


----------



## thepitchedlink

. Clearly shows who has fallen the hardest over the year - remarkable in itself. When they re-balance........ jumping jeezus murphy... will that ever cause a re-shuffling of the deck.[/QUOTE]

Red, by that you mean that the ZEO you bought 2 months ago won't even resemble the ZEO of early next year?


----------



## AltaRed

thepitchedlink said:


> Red, by that you mean that the ZEO you bought 2 months ago won't even resemble the ZEO of early next year?


One would have to dig into their re-balancing timing and rules to answer that question. I would imagine they re-balance at least annually but I don't know that. Nor do I know if some constituents would drop out and new ones added BUT one hint is:


> The S&P/TSX Equal Weight Oil & Gas Index includes securities which are constituents of the S&P/TSX 60 Index and are involved in Oil & Gas Drilling, Oil & Gas Equipment & Services, Integrated Oil & Gas, Oil & Gas Exploration & Production, Oil & Gas Refining & Marketing, and Oil & Gas Storage & Transportation,


So yes, it could look very differently in 2 months. Best check the prospectus.


----------



## GoldStone

Penn West, Enerplus and COS may drop out of TSX 60 (and, by extension, out of ZEO). A few energy companies that are currently outside of TSX 60 have a higher market cap than those three. The swap is not automatic. S&P makes the call based on index rules.


----------



## GoldStone

Just checked...

S&P announced index changes on Dec 12. Penn West and Enerplus got kicked out of TSX 60. Replaced by ATD.B and IPL.

COS survived the cut.


----------



## thepitchedlink

Wow, great info guys. Man, I gotta a lota stuff to learn.....


----------



## el oro

AltaRed said:


> ...I happened to be looking at the Imperial Oil site this weekend and I saw comments that said one of the focuses for 2015 was to improve Syncrude reliability. Somehow the Syncrude organization had allowed their facilities to age too much before bringing in XOM/IMO to provide expertise. Hope the latest is not a sign of continued underperformance for some of 2015.


Thanks for the chuckle!

http://www.theglobeandmail.com//rep...mired-in-production-problems/article22106727/



> ...Imperial and Exxon came in with an “underestimation” of how hard it is to run an oil sands project, according to one of Syncrude’s former senior executives.
> 
> “They had no idea what they were getting into in terms of complexity,” said Mark Sherman, a former vice-president of operations at Syncrude’s upgrader and utilities division. “They applied a very simplified refining model to a very complex, integrated mining, extraction and upgrading process.


----------



## AltaRed

Not surprising I suppose. Underestimation........


----------



## Jungle

Just need cos to double now and I will get my money back! Ha!


----------



## My Own Advisor

ha, it might eventually Jungle!


----------



## Fraser19

Transferred money into my TFSA, should be usable by Friday or Monday.
Although I wanted to buy in under 8, the stock is well below what I feel is an acceptable purchase price.

Although it probably wont go up as fast as some of the other stocks, I feel there is excellent room for capital gains and good dividends. At this price they cut cut the dividend by 50% and I would still feel its good value.

I would like to see some changes in the management plan. I feel that if they directed more money into the company and less into paying out dividends, this could be a very different stock in 10-15 years.

I would like to see,
Hedging
lower dividend
reducing debt or at least not increasing it.

But I do not expect to see any of this, and I still feel the stock represents excellent value.


----------



## Canadian

If oil stops declining then I would prefer they remain unhedged. In a "flat" environment hedging serves little purpose and losses will likely be taken (counterparty will require some premium on selling the hedge). Reason being is that once oil eventually climbs back up an unhedged producer will benefit immediately where a hedged producer will have a time delay before the increasing prices hit earnings.

When commodity prices decline sellers want to be hedged to lock in higher selling prices.
When commodity prices increase buyers want to be hedged to lock in lower purchase prices.
When commodity prices remain stable the only benefit of hedging is for insurance.


----------



## Canadian

Also I'm surprised nobody has commented on COS's 20% gain this week. Tempting to add to my position but my gut is telling me this price increase is only temporary.


----------



## Fraser19

Canadian said:


> Also I'm surprised nobody has commented on COS's 20% gain this week. Tempting to add to my position but my gut is telling me this price increase is only temporary.


My gut says the same, but I am also at a place where I feel that this stock is a hell of a bargain. I am going half in now, then we will see what happens. I feel the reality is that this will return at a $18-20 stock in time. I am not really taking a loss by getting in at $10.50

It is neat watching almost everything head up by 10-20% this week, but most stocks are still down 20-30% YTD.


----------



## Chris L

Most oil stock are still 50% off. I see lots of people have an issue with seeing some red before they see some green. Then again, many have missed the first 20%...

No one knows what the future holds, but I would bet oil is part of it. Either now, or 2 years from now.

The fear and uncertainty is very, very strong right now. Now is the time to check your pants and see if it's still there.


----------



## Canadian

Chris - I agree with your statement about fear. The point of optimal pessimism is when everyone is talking through scenarios of the company going under.


----------



## gladaki

Canadian said:


> Chris - I agree with your statement about fear. The point of optimal pessimism is when everyone is talking through scenarios of the company going under.


I see no issue in holding this company long term...But like every one else..I prefer to buy it around 9 some thing


----------



## youngdad3

Aren't you guys worried about the general declining pattern of COS stock chart over the last 10 years ? the fact that it lost 83% of its value over the same period? That there never seem to be a bull run on this stock even when markets are at/near an all-time high?

When it went from $30's to low $20's in 2011 I'm pretty sure it looked like a bargain too, and yet it still got another 50% haircut.

Just food for thoughs.


----------



## gladaki

Oil will hit below 50 some time before we see any growth. 
http://www.bnn.ca/News/2014/12/18/Brent-crude-holds-below-60-as-OPEC-Russia-keep-pumping.aspx
All depend on cuts i guess...current market is gambling...and too volatile to put in any thing.


----------



## Chris L

Oil may very well go below 50, or it may not. No one is happy with $50 Oil. $6 Saudi still have $50 expenses when you factor in keeping the all the other hands happy.

With the wave of a wand, OPEC may very well simply cut production. Just like that. Or a war with Russia, or a ton of other things. Prices going down have two factors, lack of cut of production and recession. Many cuts have already been projected for next year. We'll see the shortage in the not too distant future and this may carry forward for a long while.

COS needs some management shake-up. Perhaps this is a wake up call...

Let's not forget that COS has 25 years of oil reserves.


----------



## My Own Advisor

You raise some valid points Chris, especially about the reserves.


----------



## doctrine

If you're not comfortable holding COS for a long time, you might want to take this opportunity, a 31% bounce off the low, to get out or reduce exposure. Remember: their outlook from just 2 weeks ago is based on $81 Cdn SCO, which is currently a long way away at $62, *and* production will already be below the low end of their guidance, which is a double hit. There is no way they are covering expenses and capital expenditures let alone the $390M reduced dividend. They might actually be saving money by not producing any oil through the end of Dec. The financials and operations of COS are pretty scary. I just wonder if it might be back at $8 again. It's now back at close to book value - doesn't the above facts deserve at least a discount?


----------



## Chris L

If $50 oil was here to stay, I would say, yes, it would deserve a discount. How long do you see $50 oil? No one has any answers here but my wager is on higher oil in the not so distant future. 

I could see if demand was interrupted like in '08, but right now this is overproduction - most notably by OPEC. Things depend largely on one element which WILL change if oil prices remain low - thus driving up the price. So unless there is a big recession, I can't see oil stay high. OPEC is not happy at these prices either. They just aren't as unhappy as oil sands.


----------



## bmoney

doctrine said:


> If you're not comfortable holding COS for a long time, you might want to take this opportunity, a 31% bounce off the low, to get out or reduce exposure. Remember: their outlook from just 2 weeks ago is based on $81 Cdn SCO, which is currently a long way away at $62, *and* production will already be below the low end of their guidance, which is a double hit. There is no way they are covering expenses and capital expenditures let alone the $390M reduced dividend. They might actually be saving money by not producing any oil through the end of Dec. The financials and operations of COS are pretty scary. I just wonder if it might be back at $8 again. It's now back at close to book value - doesn't the above facts deserve at least a discount?


Seriously? COS has never in their history halted production, nor would they now. They have commitments to deliver barrels to customers, halting production is not a possibility, buyers need a reliable supplier, period. Now, how many companies with a BILLION dollar market-cap can you name that trades at or near book value? How many companies can you name with the potential to generate $1 Billion in FCF? For gosh sake, GOPRO is valued at $7.3 billion (1.5 times COS) I'm not sure if GOPRO ever posted a GAAP profit and is a looong way off $1 Billion FCF. It's no surprise, companies trade purely on speculation and some of them as of this writing have higher valuations and negative earnings. You said yourself this company could be worth $30 a share at higher prices. COS could if necessary scrap the dividend, add debt, and still have the potential to earn billions down the road. The medium term risk reward here is favourable, you have maybe $3 dollars of short term downside risk (at which time it would be significantly undervalued and likely bought out) and $10 dollars of upside + dividends. Lets say I'm completely wrong and you buy at $10 today, and it goes down to $6 - will it never go back up to $10? On what fundamental basis do you disagree that the risk reward is unfavourable? Buying and holding now is for entirely different reasons than 6 months ago, get over it. AND what if this is all politically motivated, according to the Guardian (one of the last bastions of reliable journalism) it is. OPEC could fix this problem in a day. So, lock in your losses boys if you think oil does not trade higher ever, but I will take this risk/reward any day, and if you have some other dogs for me with a similar type of outlook, send me a PM.

Chris, I floated the idea of 25 years reserves being conservative to quantify a worst case outlook in a simplistic model - they probably have more than 3 or 4 decades of reserves. Check their website, or read back a few pages.

Everyone please remember if you cannot do your homework on a company you should not be buying it. The opinions here are unreliable. If you do not know how to value a company you will have no foundation for conviction, and your emotions will control your actions depending on what you read on the web or hear from other people. You will search for confirmation evidenced by the current stock price, and make a bad choice. This is how you lose money.


----------



## GoldStone

bmoney said:


> Chris, I floated the idea of 25 years reserves being conservative to quantify a worst case outlook in a simplistic model - they probably have more than 3 or 4 decades of reserves. Check their website, or read back a few pages.


They have 40+ years 2P reserves (proven + probable).

Investor Presentation, page 4
http://www.cdnoilsands.com/files/Presentations/BMO-Westcoast-Investor-Meetings_website.pdf


----------



## hboy43

youngdad3 said:


> Aren't you guys worried about the general declining pattern of COS stock chart over the last 10 years ? the fact that it lost 83% of its value over the same period? That there never seem to be a bull run on this stock even when markets are at/near an all-time high?
> 
> When it went from $30's to low $20's in 2011 I'm pretty sure it looked like a bargain too, and yet it still got another 50% haircut.
> 
> Just food for thoughs.


No.
Did not lose 83% over 10 years. Maybe you refer to 83% since 2008. I didn't buy in 2008 at $50 so again No.
Don't need a bull run, just a better price than my ACB of $9.81. A curve fit to a straight line over the last 10 years is something like $25, so I like my chances.

I have bought stocks that had charts MUCH worse (or better the way I see the world) than the COS chart, like $100 -> $5 over ~5 years. Got most of my shares $5 to $12 price range which overpowered the effects of the buys at higher prices, resulting in my current largest holding. Or the second place holding that charted $8 -> $2 -> $35 -> $8 over about 10 years ... and -> $80 -> $50 for the recent history this year. The ACB on this one is $16, has a 6 figure unrealized capital gain, and pays a 2.2% dividend, plus realized capital gains of some tens of thousands.

So I don't share your concern. I am more interested in the fact that in the 10 years range of ~$55 -> $8, I am in at $10. I salivate like Pavlov's dog when I see a chart like COS. It is one of the reasons I do individual stocks and not index investing. Indexes don't have variation like this. You see risk in volatility, I see opportunity.

The old cliche is "buy low, sell high". Given that I am at most $10 away from the worst possible low (ie zero), under $2 away from the current low and $45 dollars away from the high, I like my chances in the long run to eventually in hindsight to have bought low.

hboy43


----------



## Toronto.gal

hboy43 said:


> 1. I am more interested in the fact that in the 10 years range of ~*$55 -> $8, I am in at $10.*
> 2. I salivate like Pavlov's dog when I see a chart like COS. It is one of the reasons I do individual stocks and not index investing. Indexes don't have variation like this. *You see risk in volatility, I see opportunity*.


+10. :semi-twins: [in philosophy].


----------



## Chris L

Thanks for clarifying Gold Stone. 

Nearly to my break even point after avg down to $11.9. This may happen today with how things are trending.

So much fear, time to capitalize.

I want to buy something else, but I can't decide. More COS or more BTE? Or something else?


----------



## Chris L

Toronto.gal said:


> +10. :semi-twins: [in philosophy].



+11


----------



## thepitchedlink

Chris L said:


> Thanks for clarifying Gold Stone.
> 
> 
> 
> I want to buy something else, but I can't decide. More COS or more BTE? Or something else?


You and me both...what to do, what to do?


----------



## Pluto

for those who do not know what to do, did you consider cpg? nice dividend with no hints at a cut yet, some hedged oil, stock plunged about same as cos, so maybe same recovery potential... 

Anyway, in the next sell off it will be interesting to see if we have a higher bottom. 
I don't think you can count on OPEC for sustained price cuts. They only have 1/3 of world production presently, and back when they formed, they had about 2/3 of world production. The don't have the same power as a cartel as they once did. someone mentioned in a previous post COS would not stop production even if they are losing money based on the assumption that they need to keep their customers. Similar thing with OPEC - a production cut suggests some other producer would take their customers. It looks like the status quo will prevail until the over supply dissipates. Hopefully that won't be too long...

Any idea's on how long that will take based on some reliable production vs demand numbers?


----------



## Freedom45

Initiated a small-ish position today at $11.25.


----------



## jwsclark19

Bought some at $9.30 and sold today at $11.37....Just riding the waves up and down as the price climbs.


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## Pluto

Freedom45.

Stop buying the rebound. 
Buy when the stock is getting hammered down. You make more money that way, (or if you lose, you lose less.)


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## gladaki

Pluto said:


> Freedom45.
> 
> Stop buying the rebound.
> Buy when the stock is getting hammered down. You make more money that way, (or if you lose, you lose less.)


True....


----------



## Fraser19

Went half in today at 10.85 for 110 shares.
If it drops down to the 8.00 range again I will pick up some more. If it does not drop again I will leave it at this level.


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## My Own Advisor

Nice. COS has been beaten up.


----------



## InvestmentIQ

*Wish it keeps going*

Hey MOA, this is Peter, a lucky winner to a free subscription thanks to you. Finally registered on forum today.

Anyways, I think the same as you do. If COS or other O&G stocks can go down in the new year again, then it will give us a chance to buy in the TFSA or RRSP. But looks like it's participating in a rally right now until year end. :upset: Still not a bad price right now though to get in. But I want it lower.


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## My Own Advisor

Lower is better Peter and nice to see you in the forum! Cheers!


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## Fraser19

The way I see it is many people were saying this is a screaming buy at 17.00 so getting at in 10.80, well I feel that I have done well. Will it go lower, probably but if it doesn't I did lock in at a good price.
I can easily see the dividend getting cut again which I assume will bring on another slide in the price. Really if oil stays where it is the dividend is still too much. Someone was quoting 6.00 if oil stays low for 6 more months and the dividend gets slashed again, I can see that as a reality for COS stock. Then I will dump another grand into it.


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## My Own Advisor

I won't have any cash to invest until early in the New Year. Then, I'll be buying 200 or so shares if it remains around $10 or $11.

I also want to buy some CNQ and SU, but the latter seems to be running up in price.


----------



## Fraser19

My Own Advisor said:


> I won't have any cash to invest until early in the New Year. Then, I'll be buying 200 or so shares if it remains around $10 or $11.
> 
> I also want to buy some CNQ and SU, but the latter seems to be running up in price.


Yeah I was watching HSE and CVE, but now it will probably just be CVE. I always want enough to DRIP and when Husky shot up by 7 dollars, well picking up both ceased to be an option.


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## gladaki

Any one calculated graham price for companies like BTE, CPG, and COS. They are most beaten up companies currently. BTE & CPG both have really high pay out ratio. COS at least is better in this parameter. Will be looking at these companies closely in coming days.

Regarding COS analysis from November 2014.

The 5 year low, median and high median Price/Earnings Ratios are 10.92, 11.13 and 14.29. The 10 year corresponding P/E Ratios are similar at 10.08, 11.69 and 16.19. The current P/E Ratio is 11.25 based on a stock price of $17.66 and 2014 EPS estimate of $1.57. This stock price test suggests that the stock price is reasonable. 

Graham Price is $18.45. The 10 year low, median and high median Price/Graham Price Ratios are 0.94, 1.37 and 1.66. The current P/GP Ratio is 0.96 is based on a stock price of $17.66. This stock price test suggests that the stock price is reasonable. 

The 10 year Price/Book Value per Share Ratio is 2.96. The current P/B Ratio is 1.83 based on a stock price of $17.66 and BVPS of $9.63. The current P/B Ratio is some 38% lower than the 10 year ratio. This stock price test suggests that the stock price is cheap. 

The historical average dividend yield is 5.02 and this historical median dividend yield is 5.22. These are some 34% and 52% below historical yields. These tests do not show that the stock is cheap, but it does show that it is quite low.

Source: http://www.spbrunner.blogspot.ca/201...l-sands-2.html

whereas Graham price from this site is Graham Number: 15.94
Source: http://stock2own.com/StockAnalysis/Stock/CA/COS.UN/Canadian-Oil-Sands-Trust

whatever number says, COS is undervalued as compares to CPG or BTE


----------



## naysmitj

My biggest concern with COS today is that the dividend may not be sustainable over the next 24 months.


----------



## Fraser19

naysmitj said:


> My biggest concern with COS today is that the dividend may not be sustainable over the next 24 months.


If things stay the way they are, no the dividend is not sustainable over the next 24 months. However, a lot can happen in 24 months.


----------



## PoolAndRapid

..


----------



## gladaki

PoolAndRapid said:


> If you're going to use her analysis efforts, word for word, at least mention the source and give her credit.
> 
> http://www.spbrunner.blogspot.ca/2014/11/canadian-oil-sands-2.html


True, I thought I mentioned the source.


----------



## Valueinvestor

As others have pointed out the dividend isn't sustainable which is why it's overvalued. If it gets cut entirely I'd definitely buy in the $5-7 range as I can see it going up from there in the next year or two


----------



## Canadian

I doubled my position yesterday and reduced my ACB to ~$17. Will buy more in March with my tax refund and hopefully further reduce the ACB. Not too concerned about whether it's at $7 or $17 in the next few months. My horizon is +30 years.


----------



## Chris L

I'm really tempted to buy more at this point, but I can't make up my mind. My ACB is only 11.9 so I can double up and break even quite easily and be ready for the upswing. Lots to choose from.


----------



## Canadian

If you have a long investing horizon and know you want more of this stock I wouldn't bother fretting over a dollar or two. This name is still trading at a deep discount compared to its average price over the past couple years. If it eventually returns to ~$20 I wouldn't think one would be concerned whether their ACB is $10 or $11. This isn't my philosophy on all stocks but in this instance with a few of the oil stocks I personally think it's advantageous to continue adding at these various lower prices instead of waiting on the sidelines and trying to pick the bottom.


----------



## CPA Candidate

Playing devil's advocate, with all the other beaten down oil stocks, why COS? I'm not sure I understand the case for the stock compared to peers in the oil sands and those in the conventional/tight oil game.


----------



## Canadian

There are other candidates on my radar (SU and CNQ to name a few). I like COS for a couple reasons:

1) They have proven reserves that will last decades at current production levels.

2) There is some benefit to unhedged production (considering the other oil companies in which I am invested are hedged and/or vertically integrated). COS is feeling immediate pressure from lower oil prices and will be forced to respond, while hedged companies have a bit more time to create and implement a plan. The benefit for COS is that it will immediately realize the benefits of higher oil prices when crude prices eventually recover. Hedged companies will see a delay.

3) Having other large companies invested in Syncrude creates a bit of an insurance policy. If Syncrude were 100% owned by COS I would be more concerned about its future but having other players with vested interests means that things will work out one way or another.

It may sound like I'm really rooting for this stock - and I am - but no more than I am for any of my other stocks. I am keeping my exposure to this stock limited, just like any other holding.


----------



## SkyFall

I started to learn more about options last fews months and decided to try it today, since it was my first ever option trade and want to test the water before going onto larger investments I decided to go with the simplest option trade and with only one contract (doesn't matter if the commission cost eats my profits or makes my loses larger, this trade is intended to make me learn) so I went with COS C 17APR15 11.00 now lets see how it goes, premium was $1.01.


----------



## Canadian

SkyFall did you buy or sell this contract?


----------



## SkyFall

Canadian said:


> SkyFall did you buy or sell this contract?


I bought the contract, buy-to-open.


----------



## Canadian

Best of luck to you! Did you happen to look at the July $12 calls?


----------



## SkyFall

Canadian said:


> Best of luck to you! Did you happen to look at the July $12 calls?



I did take a look, to be perfectly honest this ''investment'' I made was more to learn and analyse how the price move and try to fully or understand more about options, I didn't want to wait 6-7 months before seeing the outcome. I see this $112.24 ''investment'' as money to blow in order learn. I know I didn't the best option at all and that is due to lack of experience I wanted to dip my toe in the water.


----------



## CPA Candidate

Canadian said:


> 2) There is some benefit to unhedged production (considering the other oil companies in which I am invested are hedged and/or vertically integrated). COS is feeling immediate pressure from lower oil prices and will be forced to respond, while hedged companies have a bit more time to create and implement a plan. The benefit for COS is that it will immediately realize the benefits of higher oil prices when crude prices eventually recover. Hedged companies will see a delay.


I think one has to be very optimistic on oil price movements to think there is potential losses for producers holding oil derivatives in 2015. I believe essentially every existing 2014 contract to sell forward oil will be settled for a nice gain.


----------



## Synergy

SkyFall said:


> I did take a look, to be perfectly honest this ''investment'' I made was more to learn and analyse how the price move and try to fully or understand more about options, I didn't want to wait 6-7 months before seeing the outcome. I see this $112.24 ''investment'' as money to blow in order learn. I know I didn't the best option at all and that is due to lack of experience I wanted to dip my toe in the water.


I've been meaning to open an option/margin account to learn myself, just haven't had a chance to make it in to my local branch to sign the paperwork. Good luck with the learning.


----------



## SkyFall

Thanks Synergy, I am very eager to learn more and more. And also they only allowed me with level 1 option trading which mean only selling covered calls or buying call options which is perfectly fine don't want to get involve in any shorting just yet.


----------



## Chris L

On sale again. Hmmmm.


----------



## naysmitj

Chris L said:


> On sale again. Hmmmm.


Couldn't resist this price point even though I am expecting a divi cut within 6 months.


----------



## gladaki

Chris L said:


> On sale again. Hmmmm.


Are they lowest since 2005 ?..I wonder what will be the effect when earnings will be out in end of Jan


----------



## AltaRed

At these oil prices, COS is getting pretty close to their cash flow/barrel breakeven. Dividend will go to zero very quickly. IF oil drops much further, they will start to bleed cash on each barrel produced. Should that occur for several months, THAT could eventually result in a default once debt covenants are breached. I suspect some analysts are busy trying to figure that out pre 4Q earnings release (COS will have to address the issue in their MD&A).


----------



## My Own Advisor

If oil goes to $40, COS will eliminate their dividend. Then, it's just capital gains to bank on from there. I'll continue to own it. Oil will not stay at $40 forever, it might not even get there.

Time will tell....


----------



## gladaki

My Own Advisor said:


> If oil goes to $40, COS will eliminate their dividend. Then, it's just capital gains to bank on from there. I'll continue to own it. Oil will not stay at $40 forever, it might not even get there.
> 
> Time will tell....


I was reading your blog ...I read some where you don't sell stocks. I wonder how much of ur portfolio is energy. Also other than cos, husky what else you own. Husky at 22 was a great deal not sure if it will go to that price again..

If I ever own suncor I think right cost is 32$, cnq should be 25.


----------



## InvestmentIQ

How does this look now at $8.50? I bought just a tiny amount at this price. Let's see what happens today.


----------



## Jungle

InvestmentIQ said:


> How does this look now at $8.50? I bought just a tiny amount at this price. Let's see what happens today.


Doesn't look good. Oil futures down again this morning, $40/oil coming and they will have to suspend dividend, for now. They should announce the next cut this month with earnings. 

I'm holding a loss and don't really know what to do. As per weighting, it's only 0.6% of our portfolio. I was thinking of selling and reinvesting into suncor, which I don't mind holding, over the long term.


----------



## SkyFall

InvestmentIQ said:


> How does this look now at $8.50? I bought just a tiny amount at this price. Let's see what happens today.


depends, on the short-term sounds like a pain in the b*tt, however on the long-term sounds like a steal!

I think my call option just went to sh*t with last few days ahhhahhaa everytime I make a speculation bet it turns like that hahahah imma stick with the long-run. I will probably add more target price point is around $7.

Remember that it is very very hard to pick exactly at the bottom, you'd be already super wealthy if you could do that... just buy when it tanks and have money to buy more if it tanks even more.


----------



## My Own Advisor

SkyFall said:


> Remember that it is very very hard to pick exactly at the bottom, you be already super wealthy if you could do that... just buy when it tanks and have money to buy more if it tanks even more.


Agreed. Nothing wrong with buying at today's prices.


----------



## Chris L

My Own Advisor said:


> Agreed. Nothing wrong with buying at today's prices.


I'm losing confidence is this one! What are the biggest risks for this company? Can it survive if oil goes low for long? I'm banking on the long 25+ years of reserves. Eventually they will come into play. I'm not averaging down on this yet. I'd like to see some indication of a bottom first. I can always ride it up if I miss it.

My guess now is that we'll see a big rebound in oil stocks when we get some uptick in oil prices, then things will normalize somewhere far lower than their peeks for a couple years. The chances of getting a return might all be due to catching the bottom at just the right moment.


----------



## HaroldCrump

Jungle said:


> Doesn't look good. Oil futures down again this morning, $40/oil coming and they will have to suspend dividend, for now


Keep in mind that Canadian WCS oil futures has been in the $40 range for a while now.
Canadian oil is priced as a discount to WTI.

Companies like COS are exposed to not just the price of WTI, but to the discount spread as well.
WTI price may stay the same or even rise, but if the spread widens, these companies will still lose money.
You have to watch both WTI as well as the spread.

The lack of approval of pipelines (such as the headstrong stance of Obama to veto Keystone XL) widens the discount for Canadian oil.


----------



## Chris L

Well this sort of thing helps:

http://www.fool.ca/2015/01/06/canadian-oil-sands-ltd-consider-the-9-4-dividend-gone/

- 45 years of oil

- This oil in the ground has value. Based on the company’s enterprise value of $6 billion and its reserves of 1.6 billion barrels, investors are paying just $3.75 per barrel of oil in the ground, and nothing for all the equipment needed to upgrade it. Sure, the company’s operations aren’t so attractive with oil at $50 per barrel, but investors won’t be saying that once oil rises again.

It's going to be a long play with a sharp upside.


----------



## 1980z28

My cost on COS is 18.59
Will wait until march or april to go in on oil

Oil is not where I am placing cash at this time,waiting to pull the trigger,sitting on some cash


----------



## rikk

1980z28 said:


> My cost on COS is 18.59
> Will wait until march or april to go in on oil. Oil is not where I am placing cash at this time,waiting to pull the trigger,sitting on some cash


Fwiw ... I was considering waiting until 3rd quarter at least based on the EIA predictions of a surplus until about then ... http://www.eia.gov/analysis/ ... but what the heck ... ok, back to "work" ... enjoy the day eaceful:


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## 1980z28

Great idea as wait and see for oil to bring down cost,so no big hurry


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## peterk

Picked up a bit more today at 8.43. COS is now my largest holding, pulling ahead of Apple. 700 shares at 10.78 ACB. Hoping things stay low until I can accumulate 1000 shares, then I think I'll stop.


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## thepitchedlink

Well, look at that , my buy order went through at 8.30$.....sweet


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## rikk

HaroldCrump said:


> Keep in mind that Canadian WCS oil futures has been in the $40 range for a while now. Canadian oil is priced as a discount to WTI ...


Fwiw, SCO, which COS produces, closed at $C/bbl 52.68 yesterday, the 6th ...


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## HaroldCrump

That's about $44.50...makes sense.


----------



## AltaRed

rikk said:


> Fwiw, SCO, which COS produces, closed at $C/bbl 52.68 yesterday, the 6th ...


If so, and looking at their 2015 guidance, http://www.cdnoilsands.com/files/Gu...et-Guidance_Final-for-Release_v001_g0hh0t.pdf they are only now cash flow positive/barrel IF some of their other costs go down, e.g. current taxes, royalties, etc.

On face value, their document states Operating costs of C$45.69/B with gas fuel at $4/MMBTU. If we assume NG is down to $3, then reduces Op Cost by 64 cents to $45.09/B. If we assume $0.50-1/B transportation charges to Edmonton, their realized SCO price is $51.68-52.18..... let's say $52.09. That is a margin of $7/B.

That does not include any other cash costs such as Royalties, Current Taxes, Administration, which at $19.29/B will come down as revenue comes down, but does not go to Zero. Maybe they can get those costs down to $10/B. Still puts them underwater on a Cash Flow from Operations basis BEFORE capex of about $3/B at yesterday's SCO price (or $120 million at an annual production level of 40 million barrels assuming reduced royalties, taxes, etc. of $10/B rather than $19.29/B).

Since we know capex can be financed by debt (flexiblity on the balance sheet), the real crunch is how much negative Cash Flow from Operations can be funded from debt, for how long, at current oil prices (or worse).


----------



## Chris L

Below $8 now.


----------



## none

Chris L said:


> Well this sort of thing helps:
> 
> http://www.fool.ca/2015/01/06/canadian-oil-sands-ltd-consider-the-9-4-dividend-gone/
> 
> - 45 years of oil
> 
> - This oil in the ground has value. Based on the company’s enterprise value of $6 billion and its reserves of 1.6 billion barrels, investors are paying just $3.75 per barrel of oil in the ground, and nothing for all the equipment needed to upgrade it. Sure, the company’s operations aren’t so attractive with oil at $50 per barrel, but investors won’t be saying that once oil rises again.
> 
> It's going to be a long play with a sharp upside.


I wonder if all the divy lovers will jump ship once the dividend is cut? Early feb may be the time to jump in assuming (ha!) little movement in oil.


----------



## peterk

Ay ay ay. Never thought I'd see 7.99 COS.

That's 10.5B for Syncrude, the very same company that Sinopec valued at 51B four short years ago... guess I'll keep backing up the truck.


----------



## InvestmentIQ

Why is it that oil price went up today and yet this one still goes down this much?


----------



## CPA Candidate

peterk said:


> That's 10.5B for Syncrude, the very same company that Sinopec valued at 51B four short years ago... guess I'll keep backing up the truck.


I don't think that is really that relevant at this juncture.


----------



## Chris L

CPA Candidate said:


> I don't think that is really that relevant at this juncture.


What is? Certainly this company has taken it a bit too hard on the chin, no?


----------



## peterk

CPA Candidate said:


> I don't think that is really that relevant at this juncture.


So it's not the same oil reserve and same upgrading plant site? Just trying to put things in perspective...


----------



## AltaRed

peterk said:


> So it's not the same oil reserve and same upgrading plant site? Just trying to put things in perspective...


If they are into negative cash flow for a long enough time that causes them to go into default, i.e. their creditors will no longer cover them, it just means COS, as a working interest owner, is toast (not Syncrude). Someone would pick up the interest. Not saying this is a likely possibility, but the risk is not zero. You need to separate the operation (and assets) from the wellbeing of one of the owners.

I was in a megaproject 30 years ago when one of the working interest owners could not meet its cash calls. By the terms of the JV agreement, they had to forfeit their interest (without compensation) after being carried by the remaining owners for a set period of time. I have no idea what the Syncrude JV agreement says.


----------



## 1980z28

IMHO please hold off,wait until there is a void in supply,play the wait and see,,,,,,THIS is MHO

ONE dollar up or down will no make a difference in you future

I have paid over 17.00 and will not buy at this price,if you have to spend go somewhere else,

THIS IS MY OPINION


----------



## Valueinvestor

I think the writing is on the wall for this one. When the dividend gets cut then it will really start to drop. No hedging equals bad strategy and poor management. 

That being said I still have a buy order for $5 and I think money can be made there. If it hit $3-4 I would probably start to wonder though


----------



## AltaRed

Valueinvestor said:


> I think the writing is on the wall for this one. When the dividend gets cut then it will really start to drop.


I disagree. Cutting the dividend entirely should support stock prices. It would indicate there might indeed be responsible management at the helm husbanding cash as they should be in this crisis.


----------



## My Own Advisor

AltaRed said:


> I disagree. Cutting the dividend entirely should support stock prices. It would indicate there might indeed be responsible management at the helm husbanding cash as they should be in this crisis.


+1

I see it the same way. Dividend cut, price rises, capital appreciation, oil prices rise, dividend gets reinstated, more people buy, stock price keeps rising.

Investors who bought, more, held, bought more could be handsomely rewarded.

My crystal ball is always very cloudy but this could pan out. Will it? No idea


----------



## bmoney

Someone asked why COS is taking it on the chin so hard. Check out the short interest

http://www.tmx.com/resource/en/372



Things we can look forward to in 2015

1. COS cuts the dividend, preserves cash flow. Management could be more aggressive on debt if they like $2 Billion is conservative. Lots of companies have debt and negative cash flows, too many examples of companies like this. It will take many many years for COS to run out of financing room.

2. SCO as of Jan 7 is $53.74 http://www.psac.ca/business/firstenergy/ Still holding above COS breakeven cost of about $47

3. Lower CAPEX. Mine Train Replacement and Tailings Pond complete, management expects up to 20% increase in operating efficiency.

4. Lower operating costs as natural gas likely remains sub $4/mbtu. Wouldn't be surprised to see management put pressure on labour to reduce costs.

5. COS continues to trade at discount to book value, during 2009 book value traded at a low of 1.1 times

6. Short covering rally?

Macro positives

1. Very strong US and China auto sales. US truck sales surpass cars in December

2. US gasoline demand now at 5 year high

3. US rig count continues to drop

4. Major reduction in 2015 CAPEX for O&G across the board

5. Oil demand is still projected to increase in 2015 

6. Lybia is off line (for now), political risk/conflict premium

7. Keystone (2016) or Energy East (Quebec likes it now)

Downsides

1. Possible surprise decrease in production targets if there are bugs to workout from the completion of last CAPEX project, or unforeseen issues.

2. Continued weakness in oil prices

3. Possible increase in production from desperate nations

4. OPEC fails to agree on production cuts in spring (I believe GCC is amendable as long as it's unanimous)

5. Global recession materializes


I haven't sold and will not add more, ACB of $14.xx


----------



## supperfly17

My Own Advisor said:


> +1
> 
> I see it the same way. Dividend cut, price rises, capital appreciation, oil prices rise, dividend gets reinstated, more people buy, stock price keeps rising.
> 
> Investors who bought, more, held, bought more could be handsomely rewarded.
> 
> My crystal ball is always very cloudy but this could pan out. Will it? No idea


Or,

Oil stays <70 for the whole year, COS defaults?

Thats a possibility no?


----------



## Valueinvestor

I see COS as a play stock and not a long term hold. A gamble I'd be willing to take if it becomes attractive. I tend not to hold companies with poor management as I know where they'll be headed long term. No sense in buying more to bring down your ACB if it's only going to go lower. 

Once they cut the dividend I could see $5 as a lot of the income investors will panic but might be wrong. A dividend cut would preserve cash but cash will soon dry up with oil prices going down. And no hedging. 

I would buy at $5 and try to sell at $6, but I'd start to be worried once it hits $3-4.


----------



## AltaRed

bmoney said:


> Things we can look forward to in 2015
> 
> 1. COS cuts the dividend, preserves cash flow. Management could be more aggressive on debt if they like $2 Billion is conservative. Lots of companies have debt and negative cash flows, too many examples of companies like this. It will take many many years for COS to run out of financing room.
> 
> 2. SCO as of Jan 7 is $53.74 http://www.psac.ca/business/firstenergy/ Still holding above COS breakeven cost of about $47
> 
> 3. Lower CAPEX. Mine Train Replacement and Tailings Pond complete, management expects up to 20% increase in operating efficiency.
> 
> 4. Lower operating costs as natural gas likely remains sub $4/mbtu. Wouldn't be surprised to see management put pressure on labour to reduce costs.


Operating cost breakeven is not $47. You have to add in the other cash costs which COS stated at $19/B but which will be less automatically due to lower royalties and current taxes and they might be able to squeeze another $1-2/B out of Administration and Development expenses. But can that get below $10/B that I mentioned in an earlier post? In any case, their cash breakeven is more like $47+$10.

I agree fuel gas costs will come down a fair bit from existing assumptions, e.g. to $3/MMBTU from $4. But that only knocks off about $0.64/B. Cash breakeven is still going to be in the $57/B range, not counting Capex. They are likely, at best, at cash breakeven now.

Granted they do have a lot of debt room to at least fund Capex. But it gets expensive to fund negative cash flow for long that way. Time will tell.


----------



## Doryman

This one has me worried. I bought in at 18 and held all the way down, hoping for it to return to it's 'normal' levels. Not sure where to jump on this one, but selling at a loss doesn't feel right.


----------



## Dom

Valueinvestor said:


> I see COS as a play stock and not a long term hold. A gamble I'd be willing to take if it becomes attractive. I tend not to hold companies with poor management as I know where they'll be headed long term. No sense in buying more to bring down your ACB if it's only going to go lower.
> 
> Once they cut the dividend I could see $5 as a lot of the income investors will panic but might be wrong. A dividend cut would preserve cash but cash will soon dry up with oil prices going down. And no hedging.
> 
> I would buy at $5 and try to sell at $6, but I'd start to be worried once it hits $3-4.



You keep mentioning that if the dividend gets cut, the stock will tumble even more. As a general rule when most companies cut
their divvy, it usually sends the stock price diving but there are certain situations *like this one* where a divvy cut or complete
removal is a good thing and shows *responsible management*. In this case the company needs to save their cash in order to weather the storm.

Income investors or any investors are not worried about the income COS provides anymore, they're worried about whether the company
can stay afloat and avoid defaulting which would be a *bigger* problem altogether than a cut dividend.


----------



## HaroldCrump

^ I agree.
When a dividend is cut to weather an economic storm, but the company is fundamentally sound, stock price should go up.
On the other hand, when dividend is cut/eliminated because the company is at high risk of going bust (such as YPG in 2011), then stock prices falls further.
It all depends on the market's view of "fundamental strength".


----------



## Toronto.gal

Valueinvestor said:


> *1.* *Once they cut the dividend* I could see $5 as a lot of the income *investors will panic* but might be wrong.
> *2.* *I would buy at $5* and try to sell at $6
> *3.* but *I'd start to be worried once it hits $3-4*.


*1.* Investors already panicked in early Dec., when the div. was reduced by 43%, taking the stock for a nearly -18% dive, but given the extreme collapse of oil prices, it was not surprising. What was surprising was that they did not reduce the div. even more last month [lows on Dec. 3rd/4th respectively: $13.05/$10.72 {year-high of $24.68}]. 

Current yield is nearing 18%. If div. were to be reduced/cut again, IMHO, this time the stock would react if not positively, not so severely [BTE stock increased 7% after the 58% div. cut].

*2.* When I have a specific price in mind [like your $5], since I have no working crystal ball, I purchase in tranches, and often times I achieve the desired ACB close enough. 

Example - desired price = $7

- 1st 30% purchase = $9
- 2nd 70% purchase = $7
- ACB = $7.50. 

*3.* What do you think would happen to this company if stock were to hit those prices, ie, a drop of nearly 90%?!


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## Chris L

According to TDW the book value is $9.77, currently trading at $8.14.


----------



## jamesbe

Man. I bought a large chunk of COS at $18 I feel like a fool but it's okay because I bought it to hold for a long time in my RRSP.

Now the question is, do I hold what I have and be happy I don't lose my shirt or do I jump in at $7... geez.


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## Chris L

Best to wait until oil hits $40. Most analysts are agreeing that we'll see the floor there...if history is any guide.


----------



## supperfly17

Chris L said:


> Best to wait until oil hits $40. Most analysts are agreeing that we'll see the floor there...if history is any guide.


Analysts have no clue. Noone knows what will happen. How do they know what SA will do, what USA will do? Just speculating. Floor might be 48, might be 40, or might be even 10. As far as I am concerned this company is done if the price of oil stays below 70 for an extended period of time.


----------



## yyz

Interesting read
http://www.reuters.com/article/2015/01/08/us-oil-tankers-storage-idUSKBN0KH1M520150108


----------



## Chris L

supperfly17 said:


> Analysts have no clue. Noone knows what will happen. How do they know what SA will do, what USA will do? Just speculating. Floor might be 48, might be 40, or might be even 10. As far as I am concerned this company is done if the price of oil stays below 70 for an extended period of time.


Analysts know that if oil hits $40 it's closer to the bottom than when it was at $50 and that will reduce risk. Waiting reduces the risk of losses in a falling market. That's guaranteed.

How do you know oil will stay below $70 for an extended period of time. Your statement hasn't really added anything to the discussion.

Through past oil collapses, investors have sought $40 as the floor. If you have a better metric, feel free to add.


----------



## blin10

bottom line is, nobody knows anything on what and when something will happen... I'm not in COS, in other bigger names, but one thing that keeps me optimistic is that US markets are doing good, so that might drive oil higher once thing settle... if US market will start to slide and will loose like 20-30%+, then it will get real ugly with oil companies


----------



## Eder

I heard on CNBC one of the talking heads said that oil has dropped over 40% in less than 6 months 5 times in the past...in each case oil was trading up over 40% within 6 months.I did not check this stat myself as I don't really care as I know its a no brainer that in the future oil will be much higher & the oil sands will recommence singing. Maybe it's different this time though (I don't think so)


----------



## fatcat

blin10 said:


> bottom line is, nobody knows anything on what and when something will happen... *I'm not in COS, in other bigger names, but one thing that keeps me optimistic is that US markets are doing good, so that might drive oil higher once thing settle*... if US market will start to slide and will loose like 20-30%+, then it will get real ugly with oil companies


its not clear to me how this will be the case since this drop has nothing to do with relative supply and demand ... this is entirely driven by one political entity ... saudi arabia ... unless there is some kind of huge demand increase or massive supply reduction the saudis are calling the shots


----------



## blin10

fatcat said:


> its not clear to me how this will be the case since this drop has nothing to do with relative supply and demand ... this is entirely driven by one political entity ... saudi arabia ... unless there is some kind of huge demand increase or massive supply reduction the saudis are calling the shots


it'll be A LOT tougher for oil to recover a little if Dow loosed 30%+ and American economy looks shaky once again... sure it's all political now, but what I'm saying it'll get tougher if leading American market sinks


----------



## bmoney

I for one am not hoping for a quick recovery to $90-$100 oil. A nice 6 months of $40-$50 WTI would be desirable as it would shake up the industry and teach some conservative management principles. Followed by 1-2 years of $60-$70 WTI which keeps a lid on CAPEX & supply and lulls the masses back to cars with big displacement (truck sales are already exploding). In the short run, low prices force many producers at the margin to abandon less profitable fields and concentrate on the lowest cost areas of production. That will then set us up nicely for a longer term recovery in oil prices at a higher base as the industry finds itself in short supply of low cost fields and/or supply from 2+ years of under investment. Futures are already pricing WTI at $76-$77 in 2020, that is a massive spread over the current price.

On OPEC

As some OPEC ministers have remarked today (check Reuters) if the Saudi's are unwilling to negotiate the perception is that SA is also at war with other OPEC producers. As another minister put it, if the Saudi's won't come to the bargaining table, there is really no point to OPEC. A breakdown in OPEC would likely lead to more regional/national pricing structures, an uncoupling of international pricing based on Brent & WTI - there's pro's & con's to this.

On Demand

The reality is most of the world's conventional oil reserves are tapped-out, and few countries can profitably produce at current levels - this was the reason for the run-up in 2005 onwards. World demand is now at 90 million bbpd of which OPEC represents a thrid of this. Demand is expected to reach 100 million bbpd by the end of the decade. Where do you think the rest comes from and at what cost? Demand is still increasing just not as rapidly as supply has. A prolonged period of low prices will cause the system to crack/breakdown and likely not be limited to corporate bankruptcies of oil companies - I don't think that is in anyones interest as when things fall apart the outcomes can be unpredictable.


----------



## supperfly17

Chris L said:


> Analysts know that if oil hits $40 it's closer to the bottom than when it was at $50 and that will reduce risk. Waiting reduces the risk of losses in a falling market. That's guaranteed.
> 
> How do you know oil will stay below $70 for an extended period of time. Your statement hasn't really added anything to the discussion.
> 
> Through past oil collapses, investors have sought $40 as the floor. If you have a better metric, feel free to add.


 I did not say the oil will stay below 70, I said "IF" oil stays below 70 for an extended period COS is done, just like most junior Canadian oil producers. You dont need an analyst to tell you that. 

Although over the past 2 months analysts were predicting the floor at 60, at 55, at 50, now it seems at 40. They will be correct eventually.


----------



## fatcat

blin10 said:


> it'll be A LOT tougher for oil to recover a little if Dow loosed 30%+ and American economy looks shaky once again... sure it's all political now, but what I'm saying it'll get tougher if leading American market sinks


unless oil is signalling that we are in some kind of deflationary spiral (i don't think we are and the gold bugs certainly don't think we are since we see gold holding the line at 1200) then low oil can do nothing but stoke the fires of the american economy

if you subtract the problems low oil has for the energy segment, $50 oil is a gift to the american consumer ... as has been said many times, oil is nothing more than a tax paid to oil producing entities from the point of view of the consumer ... a car that was filled up for $75 and is now filled for $50 puts $25 back into the economy ....

i am the camp that low oil is a stimulative to the american economy and will only help


----------



## HaroldCrump

bmoney said:


> A breakdown in OPEC would likely lead to more regional/national pricing structures, an uncoupling of international pricing based on Brent & WTI - there's pro's & con's to this.


Breakdown of OPEC will not raise oil prices either.
Each producer then will have the flexibility to increase output & price their oil based on individual trade agreements.
It will be a race condition among countries with budget deficits to export as much as possible.


----------



## Canadian

Despite the fact that a lot of these analysts are talking heads and nobody has a crysal ball, is there not a bit of a self-fulfilling prophecy here? If analyst concensus is ~$40, as oil approaches $40 then many will begin taking the buy side of oil thinking they will get in before it rebounds. Suddenly there are more buyers than sellers and the price rebounds. Self-fulfilling prophecy.


----------



## Chris L

Canadian said:


> Despite the fact that a lot of these analysts are talking heads and nobody has a crysal ball, is there not a bit of a self-fulfilling prophecy here? If analyst concensus is ~$40, as oil approaches $40 then many will begin taking the buy side of oil thinking they will get in before it rebounds. Suddenly there are more buyers than sellers and the price rebounds. Self-fulfilling prophecy.


Now you're catching on to the game. Which is why it does matter what other people think. Totally matters.


----------



## Mast3rMind

Hi everyone, I'm new here and have been reading this thread with mush interest. 

I came across this article this morning: http://www.fool.ca/2015/01/06/canadian-oil-sands-ltd-consider-the-9-4-dividend-gone/

FWIU with my limited knowledge of the stock market, If COS dividends are cut, then the stock should go down. This is when I was planning to buy. What do you think?


----------



## Chris L

Yes, the div is going to go. Management is probably weighing the possible survival outcomes as we speak and how others will react to the cut. It can't afford to lose more. But no doubt, it's going away. I think COS will live, but that's just my sense of things. Oil isn't much below the break-even point for the vast majority of oil producers right now. If COS is having it rough, so are most. COS's big issue is debt and no hedging. 

That said SA is playing a dangerous game with many possible bad outcomes. With risk comes potential rewards.

Buying after a div cut, at this point, is probably better (less risky) than buying before, even though the market could react positively to a div cut. The neg risk outweigh the positive benefit...when the stock is already low to begin with.

I've been contemplating avg down, but I don't think that it's prudent at this time. If oil hits $40, things the future will become a little less murky for COS. I'd like to see some oil stability first.


----------



## Fraser19

Has COS released anything saying they are going to further cut or suspend the dividend, or are we going of the probable assumption of that is what needs to happen therefore it will?


----------



## AltaRed

I suspect they will wait until release of their 4Q results on Jan 24th.


----------



## coptzr

^^^Can't wait, been watching this for a while and I would like to jump in like most $7, and definitely if there was a huge drop to $5. As some have said I would likely bail at $3-$4. The best thing to do is for them to cut the dividend out, but as well follow up with similar numbers later to match budget production and market estimates which I don't think will happen.


----------



## supperfly17

Might see this stock fall to under 7 this week.


----------



## My Own Advisor

I can't believe this is going to be a $7 stock soon.


----------



## gladaki

My Own Advisor said:


> I can't believe this is going to be a $7 stock soon.


with GoldMan Sach predicting 39$ oil where these guys will be going


----------



## Toronto.gal

coptzr said:


> and I would like to jump in like most $7, and *definitely if there was a huge drop to $5*. As some have said *I would likely bail at $3-$4*.


So are you saying that you would buy at $5-$7 only to bail out at $3-$4? Why buy at all then? Even if you purchased at $5 and bailed at $3-$4, that would be a drop of -20%/-40%.


----------



## fatcat

Toronto.gal said:


> So are you saying that you would buy at $5-$7 only to bail out at $3-$4? Why buy at all then? Even if you purchased at $5 and bailed at $3-$4, that would be a drop of -20%/-40%.


sheesh, i thought gold-bugs were enough, now we apparently have oil bugs ... +1 from on buying a stock with that kind of plan in place

why not just not buy any oil stocks at all and then you won't have to worry about catching the bottom ?


----------



## peterk

In for another 100 shares at 7.36. Down over 50% from my initial purchase at $15 something :eek2:


----------



## gladaki

Little commentary on COS
http://www.bnn.ca/Video/player.aspx?vid=528547


----------



## AltaRed

gladaki said:


> Little commentary on COS
> http://www.bnn.ca/Video/player.aspx?vid=528547


I agree, but then the talking head loses credibility when he pretends to know LNG. LNG product is priced off oil, i.e. heating value basis, not NG feedstock supply. That is a margin squeeze if I ever heard it.


----------



## Fraser19

Been a lot of changes in the last few months. I am wondering what you guys would like to see the management team do to help create shareholder confidence/security?

What do you want them to do for today? and what do you want them to do for a more secure future?


----------



## AltaRed

Pretty simple really. They need to: 1) explain this month how they are going to husband cash near term and the bold actions to do so (cut costs, cut capex, cut dividend), and 2) a guidance scenario closer to $45-50 oil than $75 oil taking cost cutting into account. 

Then they need to explain why they think hedging is impractical or a huge cost going forward in future years. FWIW, I am not a fan of hedging because of the substantial costs involved BUT any company not hedging a good part of their production needs to explain what their Plan B is when the poo hits the fan.


----------



## Valueinvestor

Toronto.gal said:


> So are you saying that you would buy at $5-$7 only to bail out at $3-$4? Why buy at all then? Even if you purchased at $5 and bailed at $3-$4, that would be a drop of -20%/-40%.


I'm the same. I have a buy order in at $5 and hoping it gets filled soon. But I'd probably hold on if it went down to $3-4 and try to sell at $6. Anything above $6 and I think it would start to become overpriced. I'd sell in a panic if it went to $2. 

If anyone is worried about where it's headed or whether this will continue most experts are calling for 6 months. So the drop is far from over on this one. Worst case scenario is $2 and obviously best case scenario is way higher ($6-7).


----------



## Toronto.gal

Valueinvestor said:


> 1. *I have a buy order in at $5* and hoping it gets filled soon/I'd probably hold on if it went down to $3-4/*I'd sell in a panic if it went to $2/Worst case scenario is $2*
> 2. and try to *sell at $6*. Anything above $6 and I think it would start to become overpriced.


*1.* You described the classic mistake investors make, ie, buy high[er]/sell much lower. Also, if you believe worst case scenario is $2, why would you sell in a panic at $2, it's a bit of a contradiction, isn't it?  Not exactly what I would call cutting one's losses; if that's your plan, to reduce your losses, you would need to do it before the stock dropped 60% [$5-$2].

*2.* Your desired profit is 20%, yet your loss tolerance -60%? How did you figure the stock at $6 would be overpriced? If you would buy at $5, why not $2, if you saw this as worst case scenario? Are you sure you're a 'value investor'?


----------



## Chris L

I'm done with this one as of this morning. I want to pick up a few winners and nothing I've seen is telling me this is the one. Took a decent loss on a small position but I can use the rest toward a (hopefully) better company. I may still buy in on the way up, but I see more upswing in other companies right now. Just waiting a bit longer to see where the dust settles. With no end in sight, there's no point in hanging on. Perhaps management will pull something out of their butts, but I'm not going to wait around.

I'd like to see some more weakness reflected in other companies as we see more oil weakness, but perhaps the worse is behind them.


----------



## Pluto

Prices precede the fundamentals, so you can not rely on the fundamentals to tell you when to buy. You can rely on the fundamentals to tell you what to buy, and rely on price and volume charts to tell you when to buy. 

With cos having no hedges, and oil dropping still, I'm not too sure what its attraction is/was. That one fundamental - no hedges - said do not buy this one while oil is still dropping.


----------



## SkyFall

*Not pointing finger at ANYONE! * but people really need to breath (talking about the overall investors). People are there to tell you ''yeah you should buy low and sell high'' or ''im waiting when prices tank to buy'' and here I am including myself, and when events like this happen people overthink and panic....

I did that few times and when I look at the bigger picture I realize that ''people'' (myself included) sometimes focus TOO much on the short-term.

Granted, I have no clue where COS will be in few days, weeks, months from now.... BUT I know that oil price isn't staying at rock bottom forever! I am playing the ''oil crash'' but with severals companies... I am not trying to buy at the bottom, I can't.... so what I do is buy.... if it tanks buy more... and I always have enough cash to keep buying (so far)... I am pretty young and I can recover from a TOTAL wipeout here... when I invest money I don't see it as funds that I will need to finance any of my expenditures, to me it's gone! I won't see it until retirement.

So my 2 cent here, but relax... during the 08-09 crisis a lot of people thought the stock market was forever doomed.... look where are we today.


----------



## none

Relevant:

http://www.investopedia.com/articles/stocks/08/average-down-dollar-cost-average.asp


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## Chris L

I might buy back in when I see some reason to do so. Right now, I don't like this stock. I may have just sold out at the bottom, but I'll make money elsewhere with another company, as near as I can tell. I don't see COS as a big winner and do see it as a potential big loser. I didn't panic, I just don't like the fundamentals to the company enough to justify keeping it. I can still get in anywhere from here to $12 and still come out ahead - though I will have missed the absolute bottom. But as I see it, with this one, there seems to be no bottom right now and no reason for one to form.


----------



## none

So Mark (Myownadvisor). Why did you buy this stock? It seems to go against your investing strategy? Was this with gamble money?


----------



## My Own Advisor

Not really a gamble. I like getting paid to be an owner, I don't follow a strict "dividend growth strategy" meaning only buy companies that increase their dividends for decades on end.

There are only 2 companies that do that in Canada anyhow, FTS and CU.

I believe COS will recover. When I don't know. Will it cut its dividend again in the process? Maybe. But even if another cut comes, I see some capital upside in the years to come. Months, maybe not. Years, yes.


----------



## none

So in your professional opinion you think I should "load up the truck?"


----------



## My Own Advisor

I'm no pro! Leave that label to HP, MoneyGal, and others in here! 

FWIW, I'm likely going to buy more next month, hopefully 200 shares. I have no money now. I made a small lump sum payment on my mortgage and busy saving up for TFSA 2015 contributions. My wife told me to index more since that is what Andrew Hallam said. Crazy she knows this stuff now. Part of my goals for 2015.
http://www.myownadvisor.ca/2015-financial-goals/


----------



## none

I was kidding. I've learned my lessons. I'm index all the way and go to vegas on vacation.


----------



## My Own Advisor

Good on you, safer that way. Indexing. Not Vegas!


----------



## protomok

My COS shares are down 65%, hanging on for dear life but will not be selling at a loss...even if I have to hold on to this dog for years lol.


----------



## Valueinvestor

Toronto.gal said:


> *1.* You described the classic mistake investors make, ie, buy high[er]/sell much lower. Also, if you believe worst case scenario is $2, why would you sell in a panic at $2, it's a bit of a contradiction, isn't it?  Not exactly what I would call cutting one's losses; if that's your plan, to reduce your losses, you would need to do it before the stock dropped 60% [$5-$2].
> 
> *2.* Your desired profit is 20%, yet your loss tolerance -60%? How did you figure the stock at $6 would be overpriced? If you would buy at $5, why not $2, if you saw this as worst case scenario? Are you sure you're a 'value investor'?


1. My plan is to buy at $5. Is $5 high? What did you buy at? If it's at $7.50 now and oil is projected to stay down for months what do you expect will happen with COS? One thing you'll learn over time is oil and gas is cyclical. This is a downturn. It will go back up in time. As you gain more experience you'll see the cyclical nature of these stocks. 

2. I won't respond to personal attacks but to answer your question about the profit and loss I think at $6 there would still be a dividend but at $2 there would not. Since it's my non registered investing account I would use the loss and apply it against my gains. But I guess it will all play out soon


----------



## none

Assuming that the efficient market hypothesis is a reasonable approximation then .... oh right... We're gambling here.


----------



## peterk

Current guidance says $0.34/share after operating expenses and capex, based on $75 oil.

I'll assume $50 oil and $3 nat gas, $300M saved in operating expenses (I bet it will be more like 500M+ but let's be conservative), $50M saved in capex ex, and 85c CAD

so that's:

-1.50 Oil
+.06 Nat gas
+.18 Cost reductions
+.15 Exchange rate

=-0.77/share

That is a loss of 373m, or an increase in debt from 1.89B to 2.26B or an increase in debt:assets ratio from 19% to 22.5%. If this goes on for 2 whole years and another $400m loss it could increase to 26.5%. Not great, but not disastrous by any means, IMO.


** One thing I'm confused about is the stated price of oil sensitivity. The guidance claims $27M (0.05) per dollar change, but I calculate $43M (.088) based on 37.8M barrels sold... anyone know what gives with this 27M figure or how it is calculated?

http://www.cdnoilsands.com/files/GuidanceDocument/2015-Budget-Guidance_Final-for-Release_v001_g0hh0t.pdf


----------



## AltaRed

I have not gone to the COS guidance to look for myself but I will take a wild guess their lower number takes reduced royalties (and perhaps reduced current tax due) into account. Reduced sales prices results in lower royalties.


----------



## supperfly17

Valueinvestor said:


> One thing you'll learn over time is oil and gas is cyclical. This is a downturn. It will go back up in time. As you gain more experience you'll see the cyclical nature of these stocks.


I think she knows a little about investing. If you stick around long enough you will realize that too, and take her advice to the bank.


----------



## Fraser19

supperfly17 said:


> I think she knows a little about investing. If you stick around long enough you will realize that too, and take her advice to the bank.


I have to second with that. Her contribution to this forum is something I highly value. 

ValueInvestor I do not intend to attack you but sometimes you seem a little reckless with your posts.


----------



## peterk

AltaRed said:


> I have not gone to the COS guidance to look for myself but I will take a wild guess their lower number takes reduced royalties (and perhaps reduced current tax due) into account. Reduced sales prices results in lower royalties.


Yes, upon second look that must be it! I was not accounting for taxes and royalties, just sales and currency conversion...


----------



## killuminati

Does anyone have any insight from following this stock in the past? When oil dipped to prices lower than it is today (08/09) COS still hovered around the $20 range in that time.

Is there a reason it should be so badly beaten down now? Has debt grown and cash decreased? Is it all this panic that oil prices will never increase back to 100? If the thinking that prices will raise then this seems like one hell of a deal.


----------



## lightcycle

killuminati said:


> Is there a reason it should be so badly beaten down now?


Because this time around it's an assassination attempt and COS and other high-cost, over-leveraged producers are the target.

Saudis have locked themselves in an air-tight room with all the other producers and have turned off the air supply. They're the only ones with an oxygen tank and they'll only open the doors and windows once their own air has run out, hoping everything else in the room dies first.

If you're buying COS, you are betting that they will survive this targeted attack because you believe the Saudis will run out of nerve or reserves. Plain and simple. So question for you: would a country like Saudi Arabia embark on this course of action if it didn't believe it would win...?


----------



## Chris L

Exactly. Look for the survivors. Is that COS? I don't know, but they sure haven't given me enough confidence to hang on to find out. Other companies have.

You tell me what makes COS special over any other company this time around.

The Saudis now want oil prices to rebound on their own, without losing market share. All producers are now losing money they could otherwise be profiting from.

Why are the playing this game? They've run out of levers to pull. They are backed up against the wall.

If not enough production comes offline with the price being restored to $80-$100 without losing market share, the Saudis have failed. 

Can COS tolerate this?


----------



## daddybigbucks

lightcycle said:


> Because this time around it's an assassination attempt and COS and other high-cost, over-leveraged producers are the target.
> 
> Saudis have locked themselves in an air-tight room with all the other producers and have turned off the air supply. They're the only ones with an oxygen tank and they'll only open the doors and windows once their own air has run out, hoping everything else in the room dies first.
> 
> If you're buying COS, you are betting that they will survive this targeted attack because you believe the Saudis will run out of nerve or reserves. Plain and simple. So question for you: would a country like Saudi Arabia embark on this course of action if it didn't believe it would win...?


what an amazing analogy!

Lets hope its not true.


----------



## hboy43

Valueinvestor said:


> 1. My plan is to buy at $5. Is $5 high? What did you buy at? If it's at $7.50 now and oil is projected to stay down for months what do you expect will happen with COS? One thing you'll learn over time is oil and gas is cyclical. This is a downturn. It will go back up in time. As you gain more experience you'll see the cyclical nature of these stocks.


I don't know if she is in COS of late, but I am at: $10.39, $8.85, $8.13, $7.16 for ACB of $8.47 and 3.3% of portfolio. I quite agree that oil is cyclical which is why I think around now is the time to buy. "Around now" could last years and take this down lower, even to zero. Or it (around now) could be done tomorrow with some large development. That is why I have so far taken 4 stabs at this: I cannot know a priori what will be a brilliant price. Some of my other holdings I am in for 8 or 9 buys before I get a few buys really near the bottom. Sometimes it takes years to get in near bottom, but what can one do? I cannot predict the future. I have to start somewhere and I started at $10.39 with COS.

Sometimes it takes years for the return to show up, but then it does, say NBD in 2012. I started at about $100 (adjusted for share consolidations) with this one back I don't know when 2005 maybe, and finished at $5 to $10 or so circa 2009-2010 to give an ACB of $17 with something like $4/share of dividends so far. Not a great result over a decade, but at something like 8 or 9% PA time adjusted, better than GICs and better than those that bought at $100, and sold lower instead of taking the new opportunities to buy lower.

But the way I look at things is that many were quite happy back in the summer to speculate that oil prices would stay around $90 and COS was a good idea at $25. Some of those same people, maybe you are among them, I don't know, are now speculating that the end of the world is nigh and won't touch it at 1/3 of the summer price. You may be right and I may lose it all here, but investing is a business of chances and probabilities. The way I see it is someone else has already done most of the work for me, those owners that collectively rode it from $25 to $8. Even if it goes to zero, I have done better than them for they lost $17/share and I would only lose $8/share. But I have 100% of the upside, if any. Take this attitude often enough with enough shares in enough industries over enough years and it all works out in the aggregate, even with the odd bankruptcy. I have seen 6 bankruptcies in my holdings, though non any more recent than Nortel. Take Nortel, what was a more sure thing than Nortel? At least on oil here I know I am not buying a wolf in sheep's clothing, I can see the snarling teeth.

I leave with you a final thought. Consider that the naysayers are right this particular instance and it goes to zero, but at the same time over the next say 5 years, I have a higher total portfolio return. Is it more important to win any one battle, or the war? Most investors concentrate on the battles, and in the process losing the war. That is of course the great numbers of them that don't even get the return of the funds they hold, let alone the 2 percentage points above that if they avoided the MERs and went with ETFs or individual holdings.

hboy43


----------



## Fraser19

lightcycle said:


> Because this time around it's an assassination attempt and COS and other high-cost, over-leveraged producers are the target.
> 
> Saudis have locked themselves in an air-tight room with all the other producers and have turned off the air supply. They're the only ones with an oxygen tank and they'll only open the doors and windows once their own air has run out, hoping everything else in the room dies first.
> 
> If you're buying COS, you are betting that they will survive this targeted attack because you believe the Saudis will run out of nerve or reserves. Plain and simple. So question for you: would a country like Saudi Arabia embark on this course of action if it didn't believe it would win...?


Yes very good way of explaining it, to be honest as I read it I got a sinking feeling in my gut.


----------



## off.by.10

My opinion is that the reason is panic. You can almost smell it. Which means it's a good time to buy.


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## CPA Candidate

off.by.10 said:


> Which means it's a good time to buy.


Like it was a good time to buy in October, November and December?


----------



## Eder

I will not be surprised if Iran had a nautical mishap that accidentally closed the Suez, or a 100 other things that might be a catalyst here...fear is a wonderful thing for us as usually the herd ends up stampeding in the wrong direction.

It took a lot of heart to buy BMO and CIBC in early 2009...not every investor can buy low, but those that did likely have been cherry picking the energy sector in the last few months.


----------



## Jungle

I sold cos and agf.b today. I bought them originally bought them for growing dividends. Well we know he story now. Used the cash and bought hxs, I have way too much cad stock.


----------



## My Own Advisor

I could see selling AGF but COS? Humm...I wonder how many other investors might do the same.


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## 1980z28

was thinking of selling about 1000 shares of fts would still have 1500 plus shares and buy more SU and TD,will wait for COS for a couple of months


----------



## off.by.10

CPA Candidate said:


> Like it was a good time to buy in October, November and December?


I don't recall hearing about oil producers going under back then, so not as much. Still wouldn't have been such a bad idea.

Let's face it: we're not about to stop needing oil. I expect drilling in the US will slow to a crawl, production will decline and price will go back up before too long. Fractured wells decline quickly so the drama should be over in a year or two at most, assuming the Saudi do not cut before then.


----------



## supperfly17

1980z28 said:


> was thinking of selling about 1000 shares of fts would still have 1500 plus shares and buy more SU and TD,will wait for COS for a couple of months


Sounds like you really want to get rid of those FTS shares.


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## 1980z28

Have two many,about 18% of my investments

Could use more TD and SU


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## My Own Advisor

Those are studs (TD and SU). If they go under, our economy is in serious trouble.


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## InvestmentIQ

Well, did oil rebound quickly in a couple of hours to $48.00 all of a sudden? Let's see where this takes us tomorrow.


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## Pluto

lightcycle said:


> Because this time around it's an assassination attempt and COS and other high-cost, over-leveraged producers are the target.
> 
> Saudis have locked themselves in an air-tight room with all the other producers and have turned off the air supply. They're the only ones with an oxygen tank and they'll only open the doors and windows once their own air has run out, hoping everything else in the room dies first.
> 
> If you're buying COS, you are betting that they will survive this targeted attack because you believe the Saudis will run out of nerve or reserves. Plain and simple. So question for you: would a country like Saudi Arabia embark on this course of action if it didn't believe it would win...?


You made some sense on this one lightcycle. That's exactly what the Saudi's are doing, and really they have no viable alternative. So they are not going to cut production until they see enough bodies floating face down in a sea of oil. When the Saudis did this in 1986 it took about 4 years for the oil price to recover. Can cos survive 4 years? 

The only oil thing worth buying is likely survivors, and cos doesn't fit the profile. It might survive, but its too risky for me. According to a guy on BNN recently, cos requires $56 oil to cover its operating costs and royalties. If true, its already bleeding very badly and its a true gamble to assume oil will get above 56 soon enough to save this underwater animal. And if it does survive, how many years above 56 is it going to take to repair the damage? And if this $56 break even point is true, why is cos even paying a dividend at all? I don't get it. 

Wasn't cos one of those high flying income trusts? If so maybe the interest in cos is just a halo effect from the good old income trust days.


----------



## Fraser19

Pluto you make a good point, however one of my many trains of thought is when I look at stocks with 15+ years of history where they traded cheap and then just shot up over the last 15 years.
Lets say oil stays under $70 for 4 years. Cos would probably trade pretty cheap and if they are still dripping at even .05C a share it would be easy to acquire many shares and then have it go back to 25.00. 
I try to look at both dividends and capital gains. While COS in not really the best candidate it has opportunity.

Do I own COS, yes.
Will I sell it, no.
I see opportunity to it but I would not risk too much on it either.


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## peterk

Notice in the last couple days this thing has been jumping up and down with even greater volatility than the price of oil. This indicates to me that if oil goes up even slightly to mid 50s and fear eases about Saudis causing the end of the world then COS is going to spike hard to $12+, even if it is only breaking even at $55.


----------



## Chris L

peterk said:


> Notice in the last couple days this thing has been jumping up and down with even greater volatility than the price of oil. This indicates to me that if oil goes up even slightly to mid 50s and fear eases about Saudis causing the end of the world then COS is going to spike hard to $12+, even if it is only breaking even at $55.


Possibly, or maybe it's going volatile because it's going down hard. I'll make some money with BTE and HSE to make up for COS. I don't miss it yet, even if it's going up. I don't understand the point of owning it. It's fairly priced right now, but it certainly has a lot of downside potential. Others aren't as risky - to me.


----------



## protomok

Chris L said:


> Possibly, or maybe it's going volatile because it's going down hard. I'll make some money with BTE and HSE to make up for COS. I don't miss it yet, even if it's going up. I don't understand the point of owning it. It's fairly priced right now, but it certainly has a lot of downside potential. Others aren't as risky - to me.


It depends on how each of us define "fairly valued"  COS is currently priced as if it will be potentially going bankrupt and oil will take years to recover. As of writing COS is at...8.35 per share trading under book value @9.62! For those that believe COS will likely be going bankrupt and oil will take years to recover than sell. For long term holders I think the point of owning COS is because it's an opportunity to buy a blue chip company trading under book value due to temporary market conditions.

That said nothing wrong with picking up bigger fish like Husky, Suncor, CNQ etc. to reduce the risk level, to each their own.


----------



## Pluto

Well, you might get saved protomok. 

I get the feeling the worst is over with the oil drop. It could go lower than its recent low, but I doubt it will stay there long. If the action in HSE, cpg and some others is any indication, this crash has pretty much bottomed out already. If that is true, it might get to the mid 50's soon enough for cos to get its snorkel to some air.



http://www.marketwatch.com/story/in...he-wrong-oil-prices-2015-01-16?dist=countdown


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## Chris L

Sure it's priced as if oil will stay low. Are there other indicators or speculation that it won't? Isn't that just a blind faith assessment? Yes, COS will go up a lot faster than other companies and there will be rewards for this, but oil needs to be higher for that to be so. Obviously no one knows...but I'd rather be in a safer company right now than hope that oil goes to a level that does not bankrupt this company. Things will be clearer moving forward. 

I'd also guess that the low point for oil has been achieved. I actually think it probably overshot to the downside given the fear OPEC/SA put out. Things still have a shot at settling around $65-80 this year as it's required for much of the oil producers.


----------



## OurBigFatWallet

COS reports their Q4 results later this week. Curious to see just how bad it is, and how it will compare to analyst expectations (and if the dividend will stay)


----------



## Chris L

Me too. I also wonder how investors will react to a possible cut, or elimination.


----------



## 1980z28

Chris L said:


> Me too. I also wonder how investors will react to a possible cut, or elimination.


For me it would be ok to dollar cost,down over 50% on this acquisition


----------



## Wormiez

With the price of crude opening today at $44, was expecting COS to take a hit. Stock actually rallied with 20% increased in volume traded. 
With the expected dividend cut come this Wednesday, are people stipulating this stock to increase? 

COS is the first of the top Canadian Oil shops in 2015 to release their quarterly results. Exciting to see what happens this Wednesday.


----------



## My Own Advisor

I'll predict a 50% dividend cut. Then, the stock will soar triggering a bottom has been reached. 

(I really have no idea). Wednesday news should be interesting...


----------



## peterk

When do results get released? Will this affect Wednesday open or Thursday open? Or come sometime during the day Wednesday?


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## BCouto

Earnings are released Thursday after close.


----------



## Homerhomer

I would speculate that eliminating dividends all together would send the stock drastically down, get paid while you wait won't apply anymore, and getting paid while waiting is something many investors like.

Overall I am waiting to see if oil can hold on to $45 support over the next little while, if not I again speculate that the recent run up in some oil stock prices will be reversed.

I also speculate that the next Saturday's lotto 649 numbers will be 2, 7, 15, 24, 31, 32.


----------



## thepitchedlink

I also speculate that the next Saturday's lotto 649 numbers will be 2, 7, 15, 24, 31, 32.[/QUOTE]

Ooooo, that reminds me, I haven't bought my tix yet....thanks for the numbers


----------



## Toronto.gal

*Q4*- January 29, 2015/Time: 03:00 PM MST

Investors didn't like the 1st div. reduction back in Dec., but another inescapable reduction should be expected and welcomed this time around.

Given the odd reduction last month of 43%, despite the current oil prices, and not even reducing it by 1/2, I don't think they will eliminate the div. altogether.

Looking at the historical distributions, the company cut deep in 2006 & 2009 [70% & 80% respectively], so an additional 50% to 80% reduction is likely IMO.


----------



## peterk

Why do you guys think that the dividend won't be cut to 0? At $45/B they are bleeding even with significant cost cuts to expenses.


----------



## lightcycle

Also, I think if the dividend is cut, the stock price will fall. Even if most people are expecting it.


----------



## Chris L

I'm guessing 50/50 chance of a drop in the stock price. More if the divi goes to zero. I'm not so sure the divi will actually go to zero, but it probably should. I'm sure they're trying to hold all the lose ends together until there is hope of a rebound. So that might delay a big divi cut/drop.


----------



## 1980z28

I am in a funny place,dollar cost

Just purchase 1000 shares at 7.80

Waiting for the bad news have enough cash for some more share with the cut maybe a couple thousands or more if needed



Please let me add

Do not chase a falling Knife


----------



## Toronto.gal

From 2008 to 2009, when oil was trading in the low $30's [?], the div. was reduced from 40% one quarter, to 88% the next [$1.25/$.75/$.15]. Why did they not cut it 100%?

Div. was cut in 98/99, but not before first reducing it -90%, why not 100%?


----------



## 1980z28

Lets hope no cut


----------



## leeder

If management does not cut its dividend, it would either mean they are confident that oil would bounce back up within the next few months or they are inept. If they are cutting it, it makes sense to me to cut it down to a quarterly dividend of 6 cents per share and slowly grow it back up when oil prices see better days. Either way, I think COS investors should all brace for impact.


----------



## Fraser19

leeder said:


> If management does not cut its dividend, it would either mean they are confident that oil would bounce back up within the next few months or they are inept. If they are cutting it, it makes sense to me to cut it down to a quarterly dividend of 6 cents per share and slowly grow it back up when oil prices see better days. Either way, I think COS investors should all brace for impact.


Makes me curious as to what bracing for impact looks like to you?


----------



## leeder

Perhaps I may be too bearish, but it wouldn't surprise me if the stock price move below the current 52 week low of $7.10 if COS management reports negative news.


----------



## Chris L

What if COS is bought out? What does it mean for the shareholders? I don't have any experience with this. I understand that it's possible that share prices could go up a bit from their bottom. What plays into this?


http://www.fool.ca/2015/01/28/could-imperial-oil-limited-buy-canadian-oil-sands-ltd/


----------



## 1980z28

https://research.tdwaterhouse.ca/re...ticle/1413-A916121-3KM01I3B9J95LCJ3FHNP96HBL1


Looks like a div cut to 5 cents


----------



## My Own Advisor

Good sign. Responsible management.


----------



## Fraser19

1980z28 said:


> https://research.tdwaterhouse.ca/re...ticle/1413-A916121-3KM01I3B9J95LCJ3FHNP96HBL1
> 
> 
> Looks like a div cut to 5 cents


For those who cant see the article.



> 10:26 AM EST, 01/28/2015 (MT Newswires) -- Canadian Oil Sands (COS.TO), which owns a stake of more than 30% in the giant Syncrude operation, is seen cutting its dividend again by TD Bank, according to BNN TV. BNN cites TD as saying the yield on the COS stock is now above 10% with the market pricing in a second cut, by half to $0.10. But, BNN said, TD says it is possible that the dividend could be cut to $0.05 when COS reports on Thursday. BNN cited TD as adding that large retail income focussed investors will prevent COS from eliminating the dividend in full, so a "token" dividend will remain.
> 
> COS, which has a 52 week low of $7.10, said in December it was going to cut its dividend by 40% to $0.20, effective in the first quarter.
> 
> Price: 7.41, Change: -0.41, Percent Change: -5.2


----------



## Toronto.gal

*If *so, then the company is doing almost same as they did in 08/09, reducing from 40% to 88%, and now from 43% to 85% [I speculated from the company's div. reduction history]. That history also explains why the div. was not reduced higher last month.


----------



## Pluto

Video: At $50 oil, 80% of Canadian oil companies will go under. 

http://www.bnn.ca/Video/player.aspx?vid=539335


----------



## My Own Advisor

Toronto.gal said:


> *If *so, then the company is doing almost same as they did in 08/09, reducing from 40% to 88%, and now from 43% to 85% [I speculated from the company's div. reduction history]. That history also explains why the div. was not reduced higher last month.


After the cut, and run from 2008/2009 to fall 2014, investors would have made a small fortune if they "backed up the truck"? No?


----------



## Pluto

No, they would not make a small fortune. COS stock didn't even double after 08/09. And for long term holders, they are now in a serious loss position. So buyers of cos in '09 would have to be traders to make money. This is not the type of company to be rewarded long term.


----------



## 1980z28

Can collect dividends along the way and dollar cost,this it not for the light of heart

Most that buy into this sector must be in for the long term 5 to 10 years out


----------



## CPA Candidate

Pluto said:


> Video: At $50 oil, 80% of Canadian oil companies will go under.
> 
> http://www.bnn.ca/Video/player.aspx?vid=539335


Yes, nearly the entire industry is bankrupt at these levels. Traders have overshot and will end up devastating the industry within 12 months. Then, a couple years down the line oil will be an astronomical price. Most companies won't exist long enough to take advantage of it.


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## 1980z28

No such thing as to big to fail in oil


----------



## Pluto

1980z28 said:


> Can collect dividends along the way and dollar cost,this it not for the light of heart
> 
> Most that buy into this sector must be in for the long term 5 to 10 years out


I have nothing against buying into the sector, but why COS? I continue to wonder what the fascination with cos is. Its share price now is about the same as it was in 2004. And I have nothing against dollar cost averaging into dividend paying companies. But why COS? I believe dividend investors are too focused on the dividend. They need to balance that with appreciation potential of the stock, otherwise, what they gain in dividends can very quickly vanish with capital losses. There are plenty of other dividend paying companies that are stronger financially.


----------



## CPA Candidate

Pluto said:


> I have nothing against buying into the sector, but why COS? I continue to wonder what the fascination with cos is.


You and me both. I think COS is a sell. Averaging down is death spiral of throwing good money after bad. There is no V-shaped oil price recovery coming. I suspect oil will breach $40 within a month or two.

Bottom line, it's going lower before it's going higher and the dividend is toast. You can either get out with a flesh wound or face total annihilation.


----------



## 1980z28

Volume today is appox 8 million

Tomorrow maybe 10 million or more

I would say it is like a lottery a bet oil will go up in the next 5 years


----------



## Toronto.gal

My Own Advisor said:


> After the cut, and run from 2008/2009 to fall 2014, investors would have made a small fortune if they "backed up the truck"? No?


Anyone who first bought in 09 could have made a 'small fortune' with or without backing up the truck [not just in oil stock], but not those that purchased before and did not sell while oil prices were trading in the mid $140s in 2008 [only to fall to $32 in 2009]. 

Since the Feb.09 cut, share prices have traded between the low $20's and $30's, but the trend has been pretty much horizontal the last few years [prior to the current crash].

O&G's attractive dividends is what makes people hold, but this most volatile sector is not for prospering just with dividends.


----------



## protomok

Pluto said:


> Video: At $50 oil, 80% of Canadian oil companies will go under.
> 
> http://www.bnn.ca/Video/player.aspx?vid=539335


Here's a link to the report: http://cdn2.hubspot.net/hub/312313/file-2316059151-pdf/Canadian_Oil_Gas_50_Sustainable_Report.pdf.

A couple comments on the report...
-> Cost calculations were not up to date, they were based on when oil was trading much higher.


> Average cost levels between Q1 2013 and Q3 2014 have been used throughout.


-> The report doesn't seem to mention that a lot of the debt matures many years from now. For example the #2 most exposed to debt company MEG doesn't have to start repaying their debt until 2020. Disclosure I have shares in MEG.
-> Actually the report indicates that at $50 oil many of the Canadian oil companies will be cash flow positive:


> That is because virtually all Canadian oil and gas producers
> (including oil sands producers) should continue to generate positive cash flow at US$50 oil.
> Trouble is, it’s not sustainable.


 The "80% will go under" narrative is only applicable if oil prices stay at $50 long term since they'll be forced to invest in new wells, new projects, etc. I personally doubt oil will be staying at $50 for another 5 or 10 years but who knows


----------



## daddybigbucks

Pluto said:


> I continue to wonder what the fascination with cos is.


COS just has the best name in the stock market.

Canadian Oil Sands--its sounds like your buying a government backed company.

That's my opinion anyways.


----------



## My Own Advisor

I see this as "this time it is not different", meaning, 2008/2009, there was a financial crisis and those that bought financial stocks in 2009/2010 I suspect did VERY well in the recent 5 years.

I could see the same thing happening with the O&G sector. Sure, just like the financial crisis, some players will be eliminated but I could see many players thriving starting 12-18 months from now and on a great bull run 5+ years thereafter.

I could be totally wrong though, but it seems every few years, in some sector, there is a "crisis".


----------



## peterk

daddybigbucks said:


> Canadian Oil Sands--its sounds like your buying a government backed company.


Edit: Wow the video was in Spanish!


----------



## Chris L

Taking a beat today, smashing through $7. For the sake of the shareholders, hopefully they have some rainbows in their report tomorrow night.


----------



## leeder

Dropping to a quarterly payout of 5 cents per share would be wise of management. This is what TD speculates though. I think investors should question the quality of management if they don't cut its dividend to a much sustainable level. It is during tough environment like this where you can truly evaluate.


----------



## My Own Advisor

Agreed leeder. A dividend cut is expected and responsible management would make it happen. No dividend cut, this has me nervous.


----------



## My Own Advisor

http://business.financialpost.com/2...cut-dividend-but-by-how-much/?__lsa=e89c-de44

I'll say it goes to $0.05/share. 75% haircut like the article says. 

It will be interesting to see what happens to the stock price. Thinking it should go up, a responsible management move.


----------



## 1980z28

Will be interesting in the trading volume today,bail or buy


----------



## Toronto.gal

My Own Advisor said:


> http://business.financialpost.com/2...cut-dividend-but-by-how-much/?__lsa=e89c-de44
> 
> I'll say it goes to $0.05/share. 75% haircut like the article says.


Pretty much what most are predicting given the current yield/oil prices.

The article notes that the div.'s lowest on record was $0.15¢, but during the oil crisis of late 1997 & 1998, when supposedly another overproduction sent prices to near 1986 levels, the div. was reduced from $0.50¢ to $0.5¢ to $0 for 6 quarters [AOS.UN].

One can definitely see a pattern in the way the company reduces dividends. Wild.


----------



## 1980z28

https://www.google.ca/url?sa=t&rct=...94DIAw&usg=AFQjCNHON-lW1HXGedDn-nkXQiUfH_JUnQ


----------



## Fraser19

Now we are sitting a 14 year low.
Been a wild experience.
Hopefully there is some good news tonight. But even with that, there is still hard times to come.


----------



## My Own Advisor

Could this company go under? I have to wonder? I hope not for investors! Could be a wild ride but if/when oil comes back, wouldn't this thing just possibly roar back?


----------



## Fraser19

Since there isn't anything COS can do it increase the price of oil. I am wondering what COS and other companies can do to lower the cost of producing a barrel of oil. Is that even possible in the current situation? I see a lot of companies putting projects on hold and all that, but what can be done to make a barrel of oil cost less to produce? In a timely fashion.


----------



## dogcom

Help me here but wasn't it back in 2009 that Teck resources was being discussed I believe mostly by Spidey about turning around just like COS today. Back then going under was the discussion of the day and the profits were big but the risks were also very big.


----------



## HaroldCrump

TCK did turn around indeed.
Went all the way up to high $20s I believe.
TCK is still above 2009 lows.


----------



## AltaRed

COS would only go under if it violated its debt covenants and creditors called their loans. It is unlikely lenders would force COS into receivership. They are more likely to extend debt repayment terms and/or convert some debt into equity at super low share prices. As a last resort, a white knight would come in and swoop up the full interest at some super low share price.


----------



## Chris L

My Own Advisor said:


> Could this company go under? I have to wonder? I hope not for investors! Could be a wild ride but if/when oil comes back, wouldn't this thing just possibly roar back?


I would come back a lot faster than the rest. This stock is one of the most punished. The rest haven't touched on their 52 week lows for some time. All on the price of oil....big gamble, big reward. Or it could go under or be bought out.


----------



## 1980z28

https://www.google.ca/url?sa=t&rct=...6IHwAw&usg=AFQjCNFhr4Zg46w4yb23JH-W6XJME4ukhQ


----------



## 1980z28

Trading Halted


----------



## Synergy

My Own Advisor said:


> I'll say it goes to $0.05/share. 75% haircut like the article says..


Good call! Stock was down about 7% then suddenly halted??? It went to zero really fast:biggrin:


----------



## Chris L

1980z28 said:


> Trading Halted


http://www.prnewswire.com/news-releases/iiroc-trading-halt---cos-290236701.html

http://www.newswire.ca/en/story/1479517/iiroc-trading-halt-cos

" TSX Symbol: COS (all issues)

Reason: Dissemination"

What does that mean? Something big/bad is happening?


----------



## 0xCC

The reason given is dissemination. Basically there is news and it looks like maybe it has leaked so they halt trading until the news is officially out and everyone is operating on the same information.

I would not be surprised to see the dividend suspended but it is probably the 75% haircut talked about above.


----------



## 1980z28

I made a small trade at 3:03

Shortly after that ,a couple of minutes,trading halted

Was dropping fast at that time


----------



## peterk

GD COS!

I can't catch a break. Bought another 150 shares a couple hours ago...

I also sold my gold stocks a month ago before they shot up 25%. Sold my MCD last week before going up 5% today, bought VALE last week which promptly dropped 15%, and decided against buying more AAPL before earnings!

What a crappy January!


----------



## 0xCC

It looks like maybe earnings leaked. They are scheduled to report at 5:00pm ET. We likely won't hear anything until then and when we do hear something it should be quite interesting.


----------



## 1980z28

Volume was way up in the 10 minutes before the trading haulted


----------



## SkyFall

peterk said:


> What a crappy January!


hahahah talk to me about it hahahahha

lets ride this wave back to the shore


----------



## daddybigbucks

peterk said:


> GD COS!
> 
> I can't catch a break. , bought VALE last week which promptly dropped 15%,
> 
> What a crappy January!


YOUR the reason Vale dropped. I couldn't figure it out.

j/k. 

do you know what I do when that happens to me, I do the opposite. When I think I want to buy more COS, I sell. IF I think about selling Vale, I buy more.

works for me (most of the time)


----------



## OptsyEagle

peterk said:


> GD COS!
> 
> I can't catch a break. Bought another 150 shares a couple hours ago...
> 
> I also sold my gold stocks a month ago before they shot up 25%. Sold my MCD last week before going up 5% today, bought VALE last week which promptly dropped 15%, and decided against buying more AAPL before earnings!
> 
> What a crappy January!


Yeah, everyone has had a month like that. It always seems like only bad luck is available since if all those things worked out you would be patting yourself on the back for making such great investments. That is why it seems like there is no such thing as good luck.

Anyway, I just heard that COS dropped their dividend to $0.05 per quarter.


----------



## SkyFall

on the bright side is, because of the halt by IIROC, on my TD waterhouse account they inputed a 100% losses.... which mean my account balance has completely disregard COS... and I still don't feel bad about it hehehhe Lets hold hands and go through the storm


----------



## leeder

http://www.theglobeandmail.com/repo...-dividend-86-as-shares-slump/article22709189/

Confirmed. 5 cents per share quarterly dividend payout. Will be interested to see how this news will affect the stock price tomorrow.


----------



## SkyFall

I like this part:

_"We entered the current period of low crude oil prices with a strong balance sheet, and by reducing our dividend and cutting costs at Syncrude, COS is well positioned to manage its business through a prolonged period of low oil prices and retain its long-term value," said Ryan Kubik, President and Chief Executive Officer. "Syncrude has the flexibility to respond to market conditions without affecting projections for 2015 production."

"While the potential cost savings announced today are substantial, Syncrude is continuing to examine the longer-term opportunities to achieve a sustainable, lower cost structure. Syncrude and its owners strongly believe the competitiveness of the business can be enhanced through the full oil price cycle," said Mr. Kubik.

_

https://ca.finance.yahoo.com/news/canadian-oil-sands-announces-fourth-212644977.html


----------



## 1980z28

COS is maintaining its estimate for annual Syncrude production to range from 95 to 110 million barrels with a single-point estimate of 103 million barrels. -- We are reducing our estimate for the average WTI crude oil price to US$55 per barrel. Assuming an $0.82 CAD:USD exchange rate and a $4 per barrel discount for synthetic crude oil ("SCO") relative to Canadian dollar WTI, our forecast annual realized SCO selling price is about $63 per barrel. -- The estimate for operating expenses has been reduced to $1,521 million, or about $40 per barrel, based on a production estimate of 103 million barrels at Syncrude and a natural gas price assumption of $3 per gigajoule, as well as the other assumptions outlined in our guidance. The decrease is comprised of $166 million in cost reductions and $45 million due to the lower natural gas price assumption. -- We have decreased our estimate for 2015 Crown royalties to $119 million. -- Based on our updated guidance assumptions, cash flow from operations is estimated at $368 million, or $0.76 per Share. -- The estimate for capital expenditures has also been reduced to $451 million, net to COS, which includes $104 million of remaining expenditures on the major projects and incorporates $110 million in cost reductions. - See more at: http://www.cdnoilsands.com/Media-Ce...at-Syncrude/default.aspx#sthash.fuJC5cHb.dpuf


http://www.cdnoilsands.com/Media-Ce...-and-Cost-Reductions-at-Syncrude/default.aspx


----------



## peterk

Hmm... I bought shares this afternoon at 2:38 for $6.89, about 25 minutes before the halting. Now, at 4:21, after the close, my broker appears to have reversed the purchase and sold the shares right back to me at $6.89..... did I just catch a major break???


----------



## Synergy

Even with the dividend cut they will still have a 400 million post dividend funding gap according to Jameson Berkow's report on BNN. I suspect the halting saved shareholders from some pain today, tomorrow will be interesting.


----------



## SkyFall

Synergy said:


> Even with the dividend cut they will still have a 400 million post dividend funding gap according to Jameson Berkow's report on BNN. I suspect the halting saved shareholders from some pain today, tomorrow will be interesting.


lets forget my options, thats dead! tomorrow should probably be a bloodbath!


----------



## My Own Advisor

I would think the stock price should go up....but maybe not....


----------



## lightcycle

A dividend cut is a long term boon for the survivability of the company, but there are plenty of shareholders suckered in by the artificially high yield.

Despite the extensive pre-telegraphing of the dividend cut, I'm sure there are still those who were gambling on no cut. Those will be the ones driving the price downwards tomorrow morning as they scramble to cut themselves loose of this stock.


----------



## Chris L

Pre-report, things looked bad because people knew what was coming. I can't see tomorrow looking any better when they halted trading on a downtrend on exactly what was expected to happen. No pleasant surprises in the report. Halted for what? Because they wanted to wait overnight for a level head? Stock going down to it's new bottom tomorrow. Oil is isn't looking up, no positives in this. But only tomorrow can say for sure. At what price is this company worth buying? Risk continues to grow for this one.


----------



## KaeJS

Looks like a bad aapl to me.


----------



## 1980z28

I believe that this corporation will be trading 10 years from now

Also that oil will be more than 45 a barrel

So if you own a couple hundred or thousands of shares,it will come back but will take a couple of years

Good luck


Just check my trade found this(Pending Cancel1) was a couple minutes before trading stop

Was at 6.63

So I believe that my trade was Void and could not be placed


----------



## 1980z28

also volume was at 8.5 million when I did my trade

now around 5 million

so a lot of trades did not get filled


----------



## leeder

The cancelled trades might be a blessing. You might find better entry points tomorrow.


----------



## supperfly17

leeder said:


> The cancelled trades might be a blessing. You might find better entry points tomorrow.


Rather put my money on the Seahawks this Sunday.


----------



## bmoney

The dividend cut was no surprise, both RBC and TD were bang-on predicting it, so was the market as the yield was over 10%. 

As a COS shareholder the news was positive to my ears, the cost and dividend cuts will allow the company to ride a protracted period of low oil prices and quickly repair the balance sheet when prices move higher as they will be both profitable and less burdened by dividend payments. 

ALSO

Keystone XL passed it first major hurdle and was approved by the senate with 62 votes, and only a few shy of being able to over-turn a veto.

This will be a U shaped recovery, and if you have any belief that oil prices will recover NOW is when to start accumulating. It's too bad some of us thought this was a normal correction as opposed to a catastrophe, so much for being optimistic. 

Good luck


----------



## thepitchedlink

I too, as a shareholder am happy at the press release....but also hoping for a little panic tommorow to pick up a few more shares!!!


----------



## My Own Advisor

If it goes lower, I buy more. Will the bottom be $6 or $5? Hard to say. In another 5-10 years when this is back at $20-$25, it's going to be nice!


----------



## SkyFall

I suspect that today will be a red day, but like most of you guys said it... this means buy more! I am not too sure about my target price here, however COS and LRE too a greater beatdown than the rest of my oil company stocks so time to stack up more.

it in those moment that you fully understand the meaning behind phrases like ''you need to be strong mentally and know how to control your emotions''


----------



## leeder

My Own Advisor said:


> If it goes lower, I buy more. Will the bottom be $6 or $5? Hard to say. In another 5-10 years when this is back at $20-$25, it's going to be nice!


Probably bottoms to $5.30 today, but i speculate...


----------



## supperfly17

SkyFall said:


> I suspect that today will be a red day, but like most of you guys said it... this means buy more! I am not too sure about my target price here, however COS and LRE too a greater beatdown than the rest of my oil company stocks so time to stack up more.
> 
> it in those moment that you fully understand the meaning behind phrases like ''you need to be strong mentally and know how to control your emotions''


 I dont understand why you guys would be looking to buy this stock. Makes no sense, goes against any investment advice and any advice of the famous investment books.
Yes there is blood on the streets but this is nowhere close to being a blue chip.


----------



## Toronto.gal

Last trade yesterday was $6.845/opened today at $6.04 [if I caught it right], so down -11.5% so far.


----------



## Synergy

SkyFall said:


> COS and LRE too a greater beatdown than the rest of my oil company stocks so time to stack up more.'


Lots of other energy names (SGY, BTE, etc.) took a pretty good beatdown as well.


----------



## SkyFall

so far day high $7.08 (up 7%+) but lots of swings here!


----------



## blin10

that's some volatility, from low 6 to 7.30 ...


----------



## Chris L

SkyFall said:


> so far day high $7.08 (up 7%+) but lots of swings here!


Price of oil is swinging up too. And the price of other oil stocks are swinging up as well. Someone tell me why this company is better than buying any other.


----------



## Toronto.gal

I ended up buying more BTE at the open.

The market reaction is never as bad as when the news is very much expected.


----------



## hboy43

Trading halted again, but cannot find why as of yet.

And back again, maybe just a TDW glitch.

No, trading was halted for about 4 minutes on a "Single stock circuit breaker" whatever that is.


----------



## My Own Advisor

I wonder if it will get to $8 today?


----------



## Synergy

My Own Advisor said:


> I wonder if it will get to $8 today?


Did you get a chance to pick some up this morning? I think the buyers will slowly go away and the stock will fall into negative territory by late afternoon - just a hunch.


----------



## SkyFall

hboy43 said:


> Trading halted again, but cannot find why as of yet.
> 
> And back again, maybe just a TDW glitch.
> 
> No, trading was halted for about 4 minutes on a "Single stock circuit breaker" whatever that is.


hehhehe triple editing


----------



## bmoney

Picked up 2000 at $6.79 this morning, I'm already holding too much COS, wondering if I should dump, hold or hedge.


----------



## peterk

peterk said:


> Hmm... I bought shares this afternoon at 2:38 for $6.89, about 25 minutes before the halting. Now, at 4:21, after the close, my broker appears to have reversed the purchase and sold the shares right back to me at $6.89..... did I just catch a major break???


It appears I caught the opposite of a break. I got hosed. What's new though...


----------



## SkyFall

bmoney said:


> Picked up 2000 at $6.79 this morning, I'm already holding too much COS, wondering if I should dump, hold or hedge.


well excluding fees, you made $900... i don't know how the rest of your holding but that can offset a part of the losses and makes you more comfortable holding what you currently have!

Nice catch by the way!


----------



## SkyFall

peterk said:


> It appears I caught the opposite of a break. I got hosed. What's new though...


hahahah don't worry Peter I feel the same.... its as if the ''market god'' knows what I will do and ALWAYS go the opposite


----------



## the_apprentice

SkyFall said:


> I suspect that today will be a red day, but like most of you guys said it... this means buy more! I am not too sure about my target price here, however COS and LRE too a greater beatdown than the rest of my oil company stocks so time to stack up more.
> 
> it in those moment that you fully understand the meaning behind phrases like ''you need to be strong mentally and know how to control your emotions''


Didn't work out the way we had expected today as Oil stocks skyrocketed today. Regardless, there should be more buying opportunities in the near future. 

Personally, I will be following COS, but do not expect to be an investor at this moment.


----------



## Hiitsme

supperfly17 said:


> I dont understand why you guys would be looking to buy this stock. Makes no sense, goes against any investment advice and any advice of the famous investment books.
> Yes there is blood on the streets but this is nowhere close to being a blue chip.


Tell me if I'm missing something: Assets in the ground are currently worth about the trading price, correct? Worst downside is someone buys the shares at current value or a slight discount? Or a bidding war?

I bought in late December because that was my only alternative to renting one of these at $50K a day 
http://www.wsj.com/articles/worlds-largest-traders-use-offshore-supertankers-to-store-oil-1421689744


----------



## bmoney

SkyFall said:


> well excluding fees, you made $900... i don't know how the rest of your holding but that can offset a part of the losses and makes you more comfortable holding what you currently have!
> 
> Nice catch by the way!


I had a few unforced errors along the way lol ACB of $12.xx Now still well underwater on this.


----------



## SkyFall

bmoney said:


> I had a few unforced errors along the way lol ACB of $12.xx Now still well underwater on this.


I am in the $14.xx ACB.... but have call options, lets hope I will be right on that bet...


You are up by $1280 now (on your morning trade)


----------



## Toronto.gal

the_apprentice said:


> Didn't work out the way we had expected today as Oil stocks skyrocketed today.


I think it did somewhat; not to skyrocket, but not to take the beating that followed the 1st reduction back in Dec., when shares fell as much as -23% from the previous day [$13.87/$10.72].

Oil price is up, too, but this one is reacting to the welcomed div. reduction IMO, for today anyway.


----------



## peterk

Hiitsme said:


> Worst downside is someone buys the shares at current value or a slight discount? Or a bidding war?


Yes I think this is the biggest risk in this stock personally. If Imperial or some other operator swoops in with a $9 hostile takeover most of us posting in here are hooped.


----------



## Synergy

Looks like investors are seeing value here...


----------



## HaroldCrump

peterk said:


> Yes I think this is the biggest risk in this stock personally. If Imperial or some other operator swoops in with a $9 hostile takeover most of us posting in here are hooped.


That is what happened with Talisman Energy.
A foreign company swooped it and pretty much stole the company for a hefty discount.


----------



## SkyFall

I never been involve in a hostile takeover with any of my holdings.... can someone tell me what will happen?

If my ACB is above the hostile takeover price im f*cked right?


----------



## HaroldCrump

SkyFall said:


> If my ACB is above the hostile takeover price im f*cked right?


If takeover goes through, then yup :biggrin:

Sometimes (rarely, though) price spikes up in speculation that there will be competing bids.
In such a case, you can cash out with only a small drawdown (hopefully), depending on how far off your ACB is.


----------



## Hiitsme

SkyFall said:


> I never been involve in a hostile takeover with any of my holdings.... can someone tell me what will happen?
> 
> If my ACB is above the hostile takeover price im f*cked right?


It all depends where you bought in and what's on the table for bids. Talisman was bought out at 60-75% premium over preceding share price.


----------



## Toronto.gal

*SF:* I mentioned this a while back, under either this, or the BTE thread.

That's the danger of riding a stock all the way down without taking any action, of either reducing/cutting one's losses, or lowering one's ACB. 

TLM had been a potential takeover for years, so this was not a surprise.

*How oilpatch giant Talisman Energy became a takeover target*
http://business.financialpost.com/2...rgy-became-a-takeover-target/?__lsa=d19d-21c1


----------



## SkyFall

I was using call options to ''lower'' my bets costs at a fractional price..... but looks I will have to lower my ACB.

oh by the way, what will happen to options?


----------



## bmoney

A hostile takeover is rare, I wouldn't worry about this. In a hostile takeover the shares would be accumulated privately for instance from a pension or other significant shareholder, and then offer to the market at a premium to the current price to secure the remaining shares required for control. It's rare because if the takeover fails, the purchaser would likely have paid a premium to acquire the shares, and be left holding a significant stake that is largely illiquid. If COS were taken over, it would likely be a formal offer presented to management representing a premium to the current share price.


----------



## Wormiez

This is absurd to see such a gain in one day forCOS..


----------



## SkyFall

Bmoney, almost $2k


----------



## Toronto.gal

Wormiez said:


> This is absurd to see such a gain in one day for COS..


Not at all. There are times when the cuts are considered + news.

How about when it drops as much? Not absurd often times? Like after an earnings report, for example?


----------



## Fraser19

Yeah I have to agree with Tgal.
While the report was not really the best, it shows that management is doing something proactive. Also the stock has been beaten into the ground so for it to go up nearly 2 dollars isn't really that surprising.


----------



## Synergy

And / or it could be atributed to the 7+% spike in crude prices today.


----------



## Toronto.gal

^ CPG/SU, etc., are up about 4%, not 19%.


----------



## Synergy

CPG and SU didn't get hit so hard with falling crude prices over the last few wks / months. BTE had a comparable fall compared to COS and it was up over 11% today? Plus, COS is unhedged and has direct exposure to crude volitility so one would expect it to spike up more than others.


----------



## Toronto.gal

^ Yes, that is true, but my point in response to Wormiez' comment & yours, was that the jump had more to do with the div. news than the rise in oil [ie, more buyers due to the former]. BTE reacted to COS, in addition to the rise in oil, and not just in the increase after markets opened, but also in the decrease in pre-market hours [US side], and why I bought the former. 

Anyway, a good day. Happy w/end!


----------



## 299889

SkyFall said:


> Bmoney, almost $2k


Are you referring to bmoney or like bonus money?


----------



## Synergy

Toronto.gal said:


> ^ Yes, that is true, but my point in response to Wormiez' comment & yours, was that the jump had more to do with the div. news than the rise in oil [ie, more buyers due to the former]. BTE reacted to COS, in addition to the rise in oil, and not just in the increase after markets opened, but also in the decrease in pre-market hours [US side], and why I bought the former.
> 
> Anyway, a good day. Happy w/end!


It's likely a combination, to what extent we'll never know. Why did COS drop 6-7% upon opening if the Q4 release and the dividend cut was interpreted so positively by investors? I'm not saying it was a negative, I just felt that they really had no other choice so I felt that the cut was a given.


----------



## dubmac

this is purely hypothetical, but what would happen if Suncor, or any other co. bought COS?

http://www.fool.ca/2015/01/30/3-reasons-suncor-energy-inc-could-buy-canadian-oil-sands-ltd/


----------



## Toronto.gal

Synergy said:


> 1. *Why did COS drop 6-7% upon opening* if the Q4 release and the dividend cut was interpreted so positively by investors?
> 2. I felt that the cut was a given.


*1.* Well, you need to give the investors/markets a bit of time to digest/react to after-market/pre-market hour news, and it did not take that long. 

I rarely buy early in the morning because prices/volumes look indecipherable often times, especially in anticipation of news, so I typically wait until it settles a bit, but sometimes it is the best time to buy while others are selling [if you know your desired price].

*2.* I had that much deciphered by studying the pattern in their div. reduction history. Given the yield, it was a given indeed.


----------



## Synergy

Toronto.gal said:


> *1.* Well, you need to give the investors/markets a bit of time to digest/react to after-market/pre-market hour news, and it did not take that long.
> 
> I rarely buy early in the morning because prices/volumes look indecipherable often times, especially in anticipation of news, so I typically wait until it settles a bit, but sometimes it is the best time to buy while others are selling [if you know your desired price].
> 
> *2.* I had that much deciphered by studying the pattern in their div. reduction history. Given the yield, it was a given indeed.


1. Your're probably right (early morning is not normally a great time to jump in), the markets need time to come to some sort of consensus. I just thought investors would have had all night to digest the news so I was somewhat surprised by the spike down and then the large spike upwards if the move was largely attributed to earnings, the dividend, etc. It was fun learning / watching though.

@ dubmac, if I was a SU shareholder I'm not sure how happy I'd be with a COS acquisition.


----------



## SkyFall

eeehitscody said:


> Are you referring to bmoney or like bonus money?


to bmoney's morning trade


----------



## My Own Advisor

I wouldn't be surprised if SU or another big player bought COS. I think consolidation will happen in this low oil price market.

Like Tgal, not really surprised at all with COS jumping today. Dividend cuts can mean great news, responsible management.


----------



## Synergy

My Own Advisor said:


> Like Tgal, not really surprised at all with COS jumping today. Dividend cuts can mean great news, responsible management.


I'm not 100% convinced on that. Take a close look at the crude chart for today. It bottomed out at approximately 9am and then spiked up over $1.00. Since investors had all information pre-market, I think investors placed their bets before market open, hence why COS opened down 6-7% from it's previous close (investors not happy with the Q4 2014 earnings release). Once oil spiked, it took COS for a ride with it. The div cut news should really be a non issue, management had no other choice. Most investors following COS should have known this and you'd think it would have already been priced into the stock to a certain degree and definetely not something worth a 15-20% surge.

Even if no one agrees, how much would you wager is attributed to the price of oil and how much to the earning / div news??? 50/50, 60/40, 40/60, 80/20, 20/80 etc.


----------



## rikk

^ 33.3 oil price (due to short-covering), 66.6 earnings/dividends ...


----------



## 1980z28

1980z28 said:


> Just check my trade found this(Pending Cancel1) was a couple minutes before trading stop
> 
> Was at 6.63
> 
> So I believe that my trade was Void and could not be placed


I purchase 4000 shares @ 6.63 3:03pm

Just check my trade from yesterday it was returned

Still holding 4200 shares,oh well,will pickup on the next drop,my average cost is at 10.87

TMX and the Ontario Securities Commission both said they are investigating the incident.

The shares began tumbling at about 2:50 p.m. (1950 GMT) on Thursday before being halted 20 minutes later. By then they had tumbled 7.1 percent.


----------



## SkyFall

1980z28 said:


> I purchase 4000 shares @ 6.63 3:03pm
> 
> Just check my trade from yesterday it was returned
> 
> Still holding 4200 shares,oh well,will pickup on the next drop,my average cost is at 10.87
> 
> TMX and the Ontario Securities Commission both said they are investigating the incident.
> 
> The shares began tumbling at about 2:50 p.m. (1950 GMT) on Thursday before being halted 20 minutes later. By then they had tumbled 7.1 percent.


4000 shares dammn!


----------



## 1980z28

Trying to dollar cost to get average down

Will be looking for the next couple of weeks

Sucks when it was returned


----------



## SkyFall

1980z28 said:


> Trying to dollar cost to get average down
> 
> Will be looking for the next couple of weeks
> 
> Sucks when it was returned


yeah you would have made $5480 (excluding fees)! dont worry there will always be another opportunity.


----------



## peterk

^ Now I don't feel so bad for my 150 shares returned.... Still sucks though.


----------



## webber22

There was a message posted on the TD website

_Important Notice: Canadian Oil Sands Limited
Please be advised that all trades for Canadian Oil Sands Limited (Symbol: COS) executed on January 29, 2015 after 13:04:56 pm (ET) are being cancelled at the direction of the Investment Industry Regulatory Organization of Canada (IIROC).
Should you have any questions about this matter, please contact IIROC or the Investor Relations department at Canadian Oil Sands Limited. If you require assistance with your TD Direct Investing account, an Investment Representative can be reached by calling 1-800-465-5463._


----------



## peterk

^ Bah. Ridiculous. Volume seemed perfectly normal until 14:50 on Thursday, and price was 6.80 at that point, dropping off hard in the 20 minutes following. How can they back cancel trades that happened up to a full 1h:45m earlier?


----------



## webber22

1980z28 said:


> https://www.google.ca/url?sa=t&rct=...6IHwAw&usg=AFQjCNFhr4Zg46w4yb23JH-W6XJME4ukhQ


The above was roughly the time of the leak so all trades were cancelled after it


----------



## yyz

Apparently so here is the news release 

an 30 (Reuters) - The first published word on a sharp dividend cut by Canadian Oil Sands Ltd on Thursday took not only investors by surprise, but the company too, and thousands of trades were reversed on Friday as a result.

Canadian Oil Sands is the biggest stakeholder in the Syncrude Canada oil sands project in northern Alberta. It was caught off guard after the Toronto Stock Exchange inadvertently published news before the market close and before the company had released the information on Thursday that it would cut its dividend to 5 Canadian cents from 20 Canadian cents.

"They made a mistake," said company spokeswoman Siren Fisekci. "The practice is always that you give them the dividend you're announcing and you give them the preview of your release, and then we get their approval that we're OK to go, and then we release it to the wire."

Carolyn Quick, spokeswoman for TMX Group, the Toronto Stock Exchange's parent company, said the exchange doesn't review or approve company releases before issue. That is the role of a separate self-regulatory body, the Investment Industry Regulatory Organization of Canada (IIROC), she said.

IIROC said on Friday that it had canceled all 14,793 trades in the stock executed after 1:04:56 p.m. (1805 GMT), the exact time the material information was published on the exchange's "Trader Notes" notification system.

TMX and the Ontario Securities Commission both said they are investigating the incident.

The shares began tumbling at about 2:50 p.m. (1950 GMT) on Thursday before being halted 20 minutes later. By then they had tumbled 7.1 percent.

Canadian Oil Sands included news of the cut when it released its fourth-quarter earnings report a half hour after the market closed.

The stock shot up 20 percent to C$7.85 on Friday, closing higher than it had been in the two days before its earnings release. (Reporting by Alastair Sharp in Toronto and Scott Haggett in Calgary; Editing by Peter Galloway)


----------



## Toronto.gal

Synergy said:


> 1. It bottomed out at approximately 9am and then spiked up over $1.00/. *Once oil spiked, it took COS for a ride with it.*
> 2. *how much would you wager* is attributed to the price of oil and how much to the earning /div news??? 50/50, 60/40, 40/60, 80/20, 20/80 etc.


*1.* By around 10 a.m., the stock was up by 25% from the open, and pretty much where it closed. The rig count info. that triggered additional speculation/surge came later. Had the oil news of Friday been released a week ago, would COS have surged as much as it did?

*2.* More than a single factor fed the price rally, so how about splitting it 3 ways [somewhat evenly] to include the short-traders & hence end the speculation? 

Reducing spending and slashing the prev. $.35c div. by 85% in 2 stages, was one such factor. As an article put it: *'The oil industry is dead-serious when it talks about slashing operating costs and capital expenditures. It has to. Preserving cash is suddenly a priority, after years when money was growing on trees.'*


----------



## My Own Advisor

Crazy stuff guys...

The market is not always efficient!


----------



## SkyFall

How can you mistakenly leak dividend news? when you CLEARLY know it WILL impact the market? I mean, if I was in charge of the release of a news on a company, I will look when they are suposse to release their numbers and won't come close to releasing it before. They are profesionnal, how can a well educated person in the industry not know stuff like that... anyways 

However, I think it was a good thing after all, I am not sure COS would skyrocketed like that if everything went according to earnings schedule.


----------



## My Own Advisor

I'm not so sure, dividend cuts can be excellent news. In this case, it was.


----------



## Synergy

Toronto.gal said:


> More than a single factor fed the price rally, so how about splitting it 3 ways [somewhat evenly] to include the short-traders & hence end the speculation? ]


That's fair


----------



## Ag Driver

I might take my profits from POT and HSE to buy into COS and sit on it for a while. Is COS going to disappear off the map? I'm looking at about 450 shares.


----------



## 1980z28

No,

I own 4200 shares,so do not worry,if it drops,it will be purchased


----------



## Toronto.gal

$9+/up 16% already.


----------



## Ag Driver

400 @ $8.955 .... Here's to the next 5 years! Hopefully it will play out like POT did for me and only take 1.5 years.


----------



## bmoney

Sold just my 2000 bought on Friday @ $8.89, I was holding too much weight but I knew it was good for a pop and follow through. Lowered my ACB, still holding 5,300


----------



## SkyFall

I could have bought 200 shares and the remaining use it to buy one year options... but anyways if you really intend and can weather the market for 5 years, I don't believe you will be worse off with your trade today


----------



## SkyFall

bmoney said:


> Sold just my 2000 bought on Friday @ $8.89, I was holding too much weight but I knew it was good for a pop and follow through. Lowered my ACB, still holding 5,300


dude thats amazing, excluding fees thats $4200 profits woot woot!!!!!!!!!!


----------



## 1980z28

bmoney said:


> Sold just my 2000 bought on Friday @ $8.89, I was holding too much weight but I knew it was good for a pop and follow through. Lowered my ACB, still holding 5,300


Well done,I have stopped @ 4200

Loss out on the 4000 shares @ 6.63

Used the 27k this morning for other interest


----------



## Toronto.gal

^ Shares went lower the next day though, albeit for not long, so some may have been pleased that their orders did not fill the previous day.

Congrats *bmoney!*


----------



## bmoney

Thanks SkyFall and 1980z28. The trade brought my ACB into the $13.40 range, still a ways to go from here. By my math that's about 1.4 book value which still represents a great value (COS traded at 2.2 book in mid 2014). I just didn't want to hold 7,300 shares, the 2000 was just a great opportunity I saw on Friday so I took advantage.

I'm still long COS, I think as time digests changes oil will finish the year in the $55-$60 range. Futures are already pricing WTI in the $70 range a few years out. With the CDN being beaten up SCO is trading at a premium to WTI, and should help mitigate. Coupled with the dividend cut and cost cuts, I hope that the balance sheet will not take on much debt, although it's likely they will this year. Another thing, some of COS losses are superficial since they have debt denominated in USD - that should be largely out of the way unless the looney continues to slide (which it could). All we need is one solid year of oil at $65-$70 USD (hopefully 2016) that repairs the balance sheet, then I can see COS increasing dividends again in 2017 after they are on solid ground. 

New longs should be prepared to hold for 2-3 years, but I think the wait will be worth it.


----------



## bmoney

1980z28 said:


> Well done,I have stopped @ 4200
> 
> Loss out on the 4000 shares @ 6.63
> 
> Used the 27k this morning for other interest


Too bad about the trade being cancelled, you made the right call on that one.


----------



## bmoney

Toronto.gal said:


> ^ Shares went lower the next day though, albeit for not long, so some may have been pleased that their orders did not fill the previous day.
> 
> Congrats *bmoney!*


Thanks! Of course now that the stock is another .60 cents since my last post I'm begining to question my trade lol you can never win


----------



## SkyFall

the way I see it bmoney is you have a beautiful $4200 of margin of safety on your ACB


----------



## Fraser19

Quite the rally/bounce or whatever one calls it on this one.
Sure has been an interesting experience. I an glad I got to watch this and I will continue to watch. It has been a neat lesson to learn about the volatility of the market, or a stock in the market and how it can plummet and shoot up and so forth.


----------



## jamesbe

Wow those that took the chance at $7 are laughing now.


----------



## Freedom45

Keep going! Almost back to level! My ACB is $10.18.


----------



## jamesbe

Yeah I have a long way to go. Too chicken to get in at $6 to lower my ACB So needs to double again for me


----------



## My Own Advisor

jamesbe said:


> Wow those that took the chance at $7 are laughing now.


Yup!


----------



## Fraser19

Nice to see the jump, I got in at 10.99 after commissions are factored in. The only thing that sucks is with the new yield being 2% I do not have enough shares to DRIP. Now I am sitting here wondering if this is going to continue to rise, or if it will fall again so I can pick up some shares when it is lower so I can DRIP.

I have the feeling that it will fall a bit. But I don't feel that the 7 dollar rage will be the new normal. Unfortunately my feelings are usually wrong so hard to say what to do.

Also is the February dividend .05 a share or .20? I have some troubles keeping up with that when all the changes happen so fast. Looks like it is .05 but just looking to confirm it.


----------



## Chris L

I can't believe what this stock has done. They cut their divi to squat, report crap earnings and bam, recovery.

Either it was irrational before or it's irrational now. This company still needs to report some profit. Me thinks there is some speculation here. Let's see if it can hold out. If I had a run up like this one this stock, I'd be cashing out. Perhaps there are a lot of ACB'ers out there trying to remedy their positions.


----------



## My Own Advisor

Why cash out Chris?


----------



## 1980z28

Chris L said:


> Perhaps there are a lot of ACB'ers out there trying to remedy their positions.


Correct even institutions


----------



## peterk

Fraser19 said:


> Quite the rally/bounce or whatever one calls it on this one.


I'd like to call it "a return to the realization that COS is not a small-cap junior oil company, that can survive for many years of low oil with only moderately increasing their debt, which creditors will be all too happy to provide."

But "bounce" certainly sounds a lot springier


----------



## bmoney

Kudos to those that took the plunge, time to wait this one out. I think the shorts were caught on the wrong side, short interest was extreme on this stock.

Looking at the chart, I think we can rally back to $10 - there does not appear to be any resistance up to this point. I would like to see the Dec 4 $13-$11.50 gap eventually filled.

Off topic, took the proceeds of my 2000 shares and picked up RBC @ $72.5x to initiate a small position. I am concerned about Canadian banks, but I could be wrong and a 15% decline is correction territory. Will add more if it goes into the $60s - I hope since I want to build a sizable position. This is retirement money so I've got 20+ years and 4% dividend is nice.


----------



## Wormiez

Same, not many positives for this stock. But the media and speculators like it..

I've got my limits to cash out on this soon.


----------



## My Own Advisor

@bmoney,

I think we'll see COS in the low teens in the not too distant future. That would be about 4% yield which seems about right. I am guessing of course!

Canadian banks have been dividend payers and have provided long-term capital appreciation for generations. I think any slide in financials including banks is a great time to buy.


----------



## blin10

be careful though, it can drop as quick if oil goes into red...


----------



## bmoney

Chris L, by this logic Amazon should be worthless among a number of other companies with multi billon dollar valuations.

COS has the potential to generate a billion in FCF when the wind blows in their favour. Sometimes the wind changes, doesn't mean the company is impaired. If COS were to return to paying 20 cents per quarter or for that matter 35 cents, you could be getting a dividend of 8%-12% plus equity.


----------



## Chris L

I hold HSE and BTE. I had enough exposure to oil without holding COS. I held if from 12 to 7.5. I still can't see how COS is going to dig it's way out of this. That's why I sold. Would I buy more now? No, I'd rather buy another company. I'm just amazed by what it's doing. I'm having a hard time comprehending this movement.


----------



## hboy43

Hi:

Well, it took 2 or 3 months, but my recent oil transactions (sell SU, buy COS, BTE) are in the black today. I don't imagine it will hold, but fun to watch for today.

hboy43


----------



## bmoney

hboy43 said:


> Hi:
> 
> Well, it took 2 or 3 months, but my recent oil transactions (sell SU, buy COS, BTE) are in the black today. I don't imagine it will hold, but fun to watch for today.
> 
> hboy43


You could hedge and sell covered calls. With all the volatility there are some pretty decent premiums on calls 2 strikes out from in the money.


----------



## SkyFall

Chris L said:


> I hold HSE and BTE. I had enough exposure to oil without holding COS. I held if from 12 to 7.5. I still can't see how COS is going to dig it's way out of this. That's why I sold. Would I buy more now? No, I'd rather buy another company. I'm just amazed by what it's doing. I'm having a hard time comprehending this movement.


Well sometimes market is simply irrational


----------



## bmoney

Chris L, here's how they do it.

COS has about $1.9 Billion of debt and a book value of about $10 share or $4.3 billion (net of the debt) as of Jan 31. You are buying COS operations at a discount to book (after a huge capex project), and the mining rights are free. With the dividend and cost cuts they net about $400 million a year and look to reduce the cash cost of production to $40CDN, probably closer to $55 CDN all in - SCO is trading at $58 with WTI at $48 USD (Jan 30). They are operating at likely a small loss, but for a few dollars more they could finish in the black by year-end, depends where oil ends up. Now if oil plunges into the 30s and holds, then yes we have major problems, but so do all the stakeholders so that's in no one's best interest.

About 20 pages back I showed the 5 year average FCF for this company in the $800 million range on a steady. $2 billion of debt is nothing, even if they accumulate some this year or next. Put that into perspective, COS debt is like you buying a house with 3.5x your annual savings after-taxes & expenses; meanwhile people are buying houses at 7-9x their GROSS earnings at 20:1 leverage. The market is over reacting like it always does. COS is not out of the woods, but I think oil will recover before COS goes bankrupt, if and when oil recovers COS could be in the teens again.


----------



## Chris L

Rumours about take-over by others in Syncrude.

http://business.financialpost.com/2...s-jump-20-amid-takeover-talk/?__lsa=910a-9900


----------



## CadMan

Chris L said:


> Rumours about take-over by others in Syncrude.
> 
> http://business.financialpost.com/2...s-jump-20-amid-takeover-talk/?__lsa=910a-9900



Let's hope not. I'm long on this one, so don't want to see it get taken out at a low price. (I don't think I have enough shares to carry a shareholder vote though).


----------



## AltaRed

I have commented before about a current partner taking out COS especially if COS was on the skids. Logical buyers would be SU or IMO, a JV of SU and IMO, or XOM through its wholly owned CDN subsidiary, or a JV of IMO and the CDN sub, or any other JV combination. I don't know any of them would want to pay more than $10/share though.


----------



## sags

I thought I read awhile back that the Chinese investors in Syncrude wanted out of the project and had their ownership for sale, with no interested parties.

Part of Syncrude's problem, is they have consistent production and maintenance problems. They have underperformed their forecast production numbers.

A simple replacement of a valve, can put production down for 30 days to remove the gunk that accumulates in the pipes during the repair.

I talked to a guy one time in Edmonton, who worked for a company that did that. They would wait until the repair was done and then go in and start cleaning out the pipes.

They got paid their wages, hotel rooms and food..........to sit in a hotel in Edmonton and wait for repairs that were always behind schedule. 

I recall something about waiting for parts or something.

The guy had been in Edmonton for 2 weeks and was scheduled to go home and be replaced with another crew. 

They hadn't left the hotel in those 2 weeks to do any work.

They said they were hiring and offered my son a job. I thought it sounded sketchy, and he had to go to Red Deer to apply.........but it was true.


----------



## Jon_Snow

What a move over the past several days...and my TFSA appreciates it. :biggrin:


----------



## JordoR

Glad to see COS coming back up... just makes me wish I would have had the funds to get in at around 6-7. :biggrin:

This thing was looking pretty grim for awhile there. Hopefully not too many people here sold at the low.


----------



## off.by.10

Jon_Snow said:


> What a move over the past several days...and my TFSA appreciates it. :biggrin:


Mine as well  And we're off for another surprising day it seems. If this keeps going, it will be hard not to sell before too long.


----------



## Jon_Snow

I bought my position in COS with the intention of a ten year hold...but given the stress it has caused me, I'd be tempted to unload it if it gets close to my buy in price. A way to go yet...it's the dividend cut that really irks me...


----------



## Freedom45

Freedom45 said:


> Keep going! Almost back to level! My ACB is $10.18.


Finally above water. Let's hope that the last few days mark the beginning of a slow, sensible recovery in oil prices. I have my doubts, but I'm crossing my fingers.


----------



## bmoney

Nice to see that the market is finally waking up to the value of COS.


----------



## SkyFall

Oh god! COS is above my option strike price! yay


----------



## Fraser19

Pretty wild. 1.7% yield, now I am sitting here deciding if I want to tack on another 100 shares. 
I don't want to buy at the top of a temporary spike, but on the other hand its still 50% below its normal range.
I keep saying I want to see some more hope before I pick up some more shares. But it is hard to tell hope apart from a temporary spike.


----------



## SkyFall

Fraser19 said:


> Pretty wild. 1.7% yield, now I am sitting here deciding if I want to tack on another 100 shares.
> I don't want to buy at the top of a temporary spike, but on the other hand its still 50% below its normal range.
> I keep saying I want to see some more hope before I pick up some more shares. But it is hard to tell hope apart from a temporary spike.


why not call option?


----------



## Fraser19

No experience with that yet.


----------



## SkyFall

Fraser19 said:


> No experience with that yet.


Alright, I am pretty noob as well, and only trading call options (well the only options the broker allow me so far).

If you want Fraser, T.Gal recommended me a awesome book, Understanding Options by Michael Sincere very easy to read and you don't have to go throught the WHOLE book meaning you can skip all the advanced strategies and focus on simple one.

Do you have a little bit of understanding of options? because it can be a very useful tool to add to your arsenal.


----------



## peterk

Finally in the black on this. Wish I had that order filled the day before earnings to finish off my position though. Was targeting 1000 shares but have only managed to buy 800 so far. Will probably hold off on more now.




Jon_Snow said:


> I bought my position in COS with the intention of a ten year hold...but given the stress it has caused me, I'd be tempted to unload it if it gets close to my buy in price. A way to go yet...it's the dividend cut that really irks me...


COS has never offered a stable dividend, and has cut aggressively in the past immediately after oil price declines. Equally, the dividend will come roaring back immediately if/when oil rises again. If we get $200 oil as that OPEC guy says is possible, we'll be looking at $100 stock price and $1.50 quarterly dividends. Bet that won't irk you! :biggrin:


----------



## Ag Driver

Beautiful. ~23% profit in a couple days. I was shooting for a $16-$20 exit as a long term hold. What everyone's exit strategy on this one?


----------



## SkyFall

Ag Driver said:


> Beautiful. ~23% profit in a couple days. I was shooting for a $16-$20 exit as a long term hold. What everyone's exit strategy on this one?


When oil price will stabilize at $60+ and even there not sure because if its skyrocketing to $100+ I will be crying. Ideally since energy is cyclical, I will try to hold it until the next full cycle.... but thats a hard call.


----------



## My Own Advisor

Ag Driver said:


> Beautiful. ~23% profit in a couple days. I was shooting for a $16-$20 exit as a long term hold. What everyone's exit strategy on this one?


Held some before the crash.

Bought some under $9. DRIPping the stock.

Will continue to DRIP as it climbs back up in a few years. 

No harm done


----------



## Fraser19

SkyFall said:


> Alright, I am pretty noob as well, and only trading call options (well the only options the broker allow me so far).
> 
> If you want Fraser, T.Gal recommended me a awesome book, Understanding Options by Michael Sincere very easy to read and you don't have to go throught the WHOLE book meaning you can skip all the advanced strategies and focus on simple one.
> 
> Do you have a little bit of understanding of options? because it can be a very useful tool to add to your arsenal.


I got a vacation coming up. Ill try to pick up a copy to read on the flight. Thanks for the tip.


----------



## Causalien

Ag Driver said:


> Beautiful. ~23% profit in a couple days. I was shooting for a $16-$20 exit as a long term hold. What everyone's exit strategy on this one?


None. I was lucky to have bought 1300 of this in my RRSP, so it will sit there.


----------



## My Own Advisor

@Causalien, nicely done.


----------



## Fraser19

I was thinking over the last few days. Over the past few months there has been a lot of talk about companies with unsustainable dividends.
Is it possible for a company to have a variable dividend? For example lets say COS always had a dividend of 5% meaning that the dividend would always be 5% of the share price so the actual divided would fluctuate every payment date.
Do any companies do this?


----------



## jwsclark19

I bought 125 shares in my RRSP at $10.25/share. Thought about buying a lot more when it was down to $7, but I was too chicken. Still pretty happy with my position though. Not going to get rich off 125 shares, but I'm happy with this. I just have $1300 in my RRSP that I've devoted to self-managed stock trades while I gain more and more knowledge about stock investing.


----------



## Ethan

Fraser19 said:


> I was thinking over the last few days. Over the past few months there has been a lot of talk about companies with unsustainable dividends.
> Is it possible for a company to have a variable dividend? For example lets say COS always had a dividend of 5% meaning that the dividend would always be 5% of the share price so the actual divided would fluctuate every payment date.
> Do any companies do this?


I've never heard of a company paying a dividend that is pegged to the share price.

Terra Nitrogen (NYSE:TNH) pays a variable dividend based on profits and future cash requirements. Each quarter the dividend amount is different.


----------



## SkyFall

wow 3 days in a row COS closed up by at least 20%


----------



## 1980z28

Still have 4200 shares and another dollar and we are even

Will sell at that point all of it


----------



## 299889

What are the odds of this stock going up another 20% tomorrow? Any thoughts? 

I don't think it'll go up exactly 20% but it'll definatly go up a bit


----------



## SkyFall

eeehitscody said:


> What are the odds of this stock going up another 20% tomorrow? Any thoughts?
> 
> I don't think it'll go up exactly 20% but it'll definatly go up a bit


To be honest I didn't expect to see COS go up by 20% on Friday... If oil goes up tomorrow, which I hope, COS should do ok and if oil slump tomorrow... oh well get ready for some roller-coaster ride!

Hey 1980z28 , out of curiosity, why having to go through all that roller-coaster to settle for break-even? (no offense just curious)


----------



## 1980z28

Will place the 50k in other areas,have 600 td shares,will buy more banks and sit on some cash

at 54 and will retire in two years,I have to settle in on slow and steady,no pension only savings

Missed out on thursdays 4000 shares at 6.63 of COS,because it was cancel,spent that cash on monday,I do not hold any bonds or fixed income maybe time to look at this direction,


----------



## Ag Driver

That makes sense now 1980z28! I was curious as well. I wasn't expecting such a quick return, so I'm debating on bailing ... but I think I will wait for fuel prices to go back up. We will still be driving gas cars in the next 5 years.


----------



## SkyFall

Alright thanks for the clarification


----------



## maxandrelax

It has fallen from $24 bucks since the summer. Why is this anything more than a dead cat bounce due to short covering? Rougher times are still ahead with our oil patch. When I see a lot of !!!! marks in peoples' posts I get concerned. If you are thinking of jumping on this train now, be careful. jmho. Good luck to all.


----------



## 1980z28

maxandrelax said:


> It has fallen from $24 bucks since the summer. Why is this anything more than a dead cat bounce due to short covering? Rougher times are still ahead with our oil patch. When I see a lot of !!!! marks in peoples' posts I get concerned. If you are thinking of jumping on this train now, be careful. jmho. Good luck to all.


+1


----------



## Causalien

I bought this in my RRSP. It is a premium to net liquidation value buy. Was attractive play before it reached $11. Since it is in RRSP, I want to leave it in for the eventual return to dividend payment that will just increase my total RRSP room. I am not DRIP it as that jeopardizes this goal.

Plus while it is at $8, it effectively have a natural leg of the iron condor already there for me at $0. Next, I just need to buy put to open, sell covered call to open and I have a legit iron condor within an RRSP at the cost of only 3 of the legs.


----------



## SkyFall

brace for some turbulence today! oil is down! looks like the winning streak will stop at 3 hehhehehe


----------



## dotnet_nerd

Hehehe. Took some profits yesterday, time to buy again the dips.

Lather, rinse, repeat....


----------



## Ag Driver

dotnet_nerd said:


> Hehehe. Took some profits yesterday, time to buy again the dips.
> 
> Lather, rinse, repeat....



I wonder if I should do the same. I have never played these short term swings before. I would make a good quick profit if I follow suit with Lather, rinse, repeat.


----------



## OptsyEagle

In my experience, you win these trades a maximum of about 3 times, and most times less. Then you either sell when it has gone up, only to watch it continue to go up and up and up, or you buy it back again during a pull back, to enjoy the fun of it going down and down and down...wiping out most gains from previous trading.

In hindsight, this always looks easier then it really is in real time or by reading someone else's posts of a good trade. Obviously there have been exceptions, even in my personal experience but I don't believe they are the norm. Maybe others can give you some thoughts on this as well.


----------



## 299889

Dropping today!


----------



## Jon_Snow

Very predictable.


----------



## Ag Driver

OptsyEagle said:


> In my experience, you win these trades a maximum of about 3 times, and most times less. Then you either sell when it has gone up, only to watch it continue to go up and up and up, or you buy it back again during a pull back, to enjoy the fun of it going down and down and down...wiping out most gains from previous trading.
> 
> In hindsight, this always looks easier then it really is in real time or by reading someone else's posts of a good trade. Obviously there have been exceptions, even in my personal experience but I don't believe they are the norm. Maybe others can give you some thoughts on this as well.




I think you're right. "Quick/Easy Money" is the hook. I am forced to sit on this one now as my account is currently frozen (come to find out). I am going through the process to transfer in kind from QTrade to TD .... time to watch from the sidelines!


----------



## Toronto.gal

Key is knowing your goals/tolerance, and having discipline; the latter easier said than done. 

I balanced my new longer-term positions twice since Dec. Most of the time, I don't even sell my trading positions in full, selling just 1/2; that way I don't miss on the upside, and have capital for the downside to top-up.

I have no positions in COS atm, I was speaking in general terms [oil stocks].


----------



## bmoney

OptsyEagle said:


> In my experience, you win these trades a maximum of about 3 times, and most times less. Then you either sell when it has gone up, only to watch it continue to go up and up and up, or you buy it back again during a pull back, to enjoy the fun of it going down and down and down...wiping out most gains from previous trading.
> 
> In hindsight, this always looks easier then it really is in real time or by reading someone else's posts of a good trade. Obviously there have been exceptions, even in my personal experience but I don't believe they are the norm. Maybe others can give you some thoughts on this as well.


Well said. The best anyone can do on a trade is capture a part of a move. It's really impossible to predict how long or short a stock will run in any direction. This is why it's best to scale in and out of positions with an objective and discipline, however you need enough shares to make it meaningful.

Today I sold some Feb $14 covered calls on 2300 shares, shoulda woulda coulda sold them yesterday but who knows. $14 is above my ACB and above the Dec 4 gap. If this stock goes parabolic in the next 2 weeks, I'd be happy unwinding more shares at a profit to bring my target allocation in line. It's wishful thinking to see this stock at $14 by Feb 20, but I get paid 20 cents to sit and wait.


----------



## SkyFall

Totally right about the swing trade, you can do it but not easy, I winned a few times with the TVIX and also burned myself... to me it's as if god knows I know the pattern and change it hahhaha


----------



## hboy43

OptsyEagle said:


> In hindsight, this always looks easier then it really is in real time or by reading someone else's posts of a good trade. Obviously there have been exceptions, even in my personal experience but I don't believe they are the norm. Maybe others can give you some thoughts on this as well.


I started buying COS back in early December at $10.39. My thesis at the time was that some day oil will probably be worth real money again and COS will be back to ~$20. Since I have purchased 3 more times and now have an ACB of $8.47. Sure I could strip out some 25% profit at current ~$10.60 and have fun saying I made a what, 200 or 300% annualized return. Pat myself on the back and all and brag at parties (well not that last part as I am effectively a hermit). 

I'd rather wait it out and get a 100 or 150% return over the 2 or 10 years it might take and add real live dollars to my situation.

No my game is 8% average annual return by buying low(ish) and selling high(ish) with often many years in between. Often buying the same security again and again as my initial stabs at low(ish) were in the fullness of time proven incorrect. 8% is just the stock market ~century average, so I am not in reality shooting for the moon. As I am currently over that goal, I am a happy camper.

hboy43


----------



## 1980z28

I have a sell at 12.00 4200 shares as that is where I will break even,when ever that happens


----------



## SkyFall

does anyone know why COS is lagging when OIL is up by over 5%? just curious...


----------



## Hiitsme

SkyFall said:


> does anyone know why COS is lagging when OIL is up by over 5%? just curious...


If anyone in here really knows...I for one would like to offer them $1000/hr for investment advice. Although that wouldn't be worth their time as they're busy making money on the way down (and up).


----------



## Fraser19

http://www.theglobeandmail.com/glob...ith-canadian-oil-sands-stock/article22786309/

I believe that it will go up and down several more times.

This is the way I see it, although I doubt I could sell my thoughts for much. Oil falls down COS falls down, selling like crazy to minimize there losses. Oil goes up people start buying like crazy. Once they have got some gains they exit. Then it falls again. I expect COS to do this quite a bit over the next while. I would like to pick up some more in the low 8 range.

I expect COS to be a true roller coaster ride, lots of ups, downs, unexpected twists. I just hope at then end I am filled with joy and excitement, instead of feeling sick and wanting to puke.


----------



## Toronto.gal

hboy43 said:


> 1. I started buying COS back in early December/*Sure I could strip out some 25% profit at current ~$10.60 and have fun* saying I made a what, 200 or 300% annualized return.
> 2. I'd rather *wait it out and get a 100 or 150% return over the 2 or 10 years* it might take and add real live dollars to my situation.


*1.* In my case it was with BTE. The fun for me is always about reducing risk, even if I had purchased at all time lows [I leave the bragging for others to do].

*2.* Sure, I'm with you for the most part, but not with all sectors/companies/scenarios. With extreme & ongoing volatility of commodities, in order to reduce risk/not let all profits evaporate/not increase your ACB/have dead money for long periods of time, etc., it can be effective to use multi-strategies; balancing is one of them, especially when extreme & rare opportunities present themselves. In the case of COS, shares rose about 100% in 3 days, and while it was good for many to DCA, recent new buyers would have certainly sold/balanced. 

I started my BTE position on Dec.12, and given the swift price increases/decreases since, I decided to balance & trim 30% & later 20% of my shares at 33% & 35% respectively. In between the 1st & 2nd balancing acts, shares dropped nearly 20% [same day COS hit the low of $6.01], at which point I not only bought the sold position back, but also increased it by an additional 20%, & later balanced a 2nd time due to the rapid increase just since Jan.29th. The end result: have same # of shares/ACB increased by only 4.5%/reduced investment + more. No matter how much higher prices may go, considering that I kept same # of shares @ at ACB only slightly higher, I have not left money on the table, I simply took some.

There are also scenarios when time [waiting], is not your friend, ie, opportunistic takeovers, bankrupticies, etc.


----------



## bmoney

Looks like the stock is beginning to fill in the Dec 4 gap between $11.50-$13.00.


----------



## Ag Driver

Congrats 1980z28! That didn't take long for it to hit $12


----------



## bmoney

Anyone else making money? Who got on the boat under $10?


----------



## BCouto

I sold at 11.23 with a 36% return. Guess I sold too soon haha. Oh well I'll wait for next time.


----------



## Ag Driver

Got in a hair under $9. Up +36% and in it for the long haul. I'll load up again if it ever dips below 9.... I'll even dump my loser TA.TO


----------



## Bistouri

Bought 4500 shares at 7.95 in Jan. Just sold at 11.36 Tuesday. 43% in one month.....Thank you TFSA! Will buy more when price drops again.


----------



## 1980z28

sold 4200 shares

never made a penny

sold at 12.00

now to shop again


----------



## bmoney

Kudos if you bought and made money, this was a rare opportunity and took guts to buy at or near the lows. I'm off maybe 10% off for the moment, less if my covered calls pay off next Friday and I add up my dividends. 

Lessons learned:

1) Don't load up early or try to catch a falling knife - I was reminded of this again with COS.
2) markets can be irrational
3) always keep some cash on the sidelines to take advantage of opportunities 
4) dollar cost averaging can sometimes get you out of a jam, I bought my largest positions under $10, but had stock at $22 long and more around $18.
5) do your own homework


----------



## SkyFall

Good day for my options  

I also bought puts to protect against short term downturn


----------



## hboy43

Hi:

Well Toronto.gal I hated to do it, but I sold 1/3 COS. It was more a play on wanting to reduce my margin debt. Plus it had worked its way up to 4.7% of the portfolio and the largest energy position in the portfolio. I also sold 1/5 of HSE for good measure.

There is just something unsettling and unreasonable about a 2:1 price range in a half month.

Anyhow not bad for average 6 weeks work on borrowed money.

hboy43


----------



## Toronto.gal

*Hboy:* I'm speechless. :wink:


----------



## bmoney

In case any one is not keeping up with the latest rumors, the Saudi's are apparently dangling a carrot in-front of the Russians, OPEC would be willing to talk production cut if Russia backs off from Syria. The recent Ukraine cease fire is a positive step that shows Russia is willing to cooperate with the West. If you're inclined to believe that part of the reason Saudi's were talking tough about marketshare for political reasons, this crises could be all over with a simple production cut. 

Stay strong, stay long


----------



## Toronto.gal

bmoney said:


> 1. Stay strong, stay long
> 2. If you're inclined to believe that part of the reason Saudi's were talking tough about marketshare for *political reasons*


1. Much easier after reducing risk, like you did when you made a few thousands with a short-term trade. Good points in post #1141 btw, but you left out the part about taking profits.
2. When have oil prices not correlated with politics & political turmoil? Always since I follow the markets.


----------



## Chris L

bmoney said:


> In case any one is not keeping up with the latest rumors, the Saudi's are apparently dangling a carrot in-front of the Russians, OPEC would be willing to talk production cut if Russia backs off from Syria. The recent Ukraine cease fire is a positive step that shows Russia is willing to cooperate with the West. If you're inclined to believe that part of the reason Saudi's were talking tough about marketshare for political reasons, this crises could be all over with a simple production cut.
> 
> Stay strong, stay long


A cut would be HUGE! Overnight swing.

Got any sources?


----------



## Jon_Snow

Oh boy.


----------



## PuckiTwo

bmoney said:


> ..... OPEC would be willing to talk production cut if Russia backs off from Syria.......


Something along those lines was also mentioned in financial papers when I was in Europe a month ago. That SA made their to decision not to cut in order to force Russia giving up support for Syria.
*Edit: however, it seems that the information comes only from questionable media sources!*


----------



## bmoney

T.gal yes, it helps to stay flexible with cash and take advantage of opportunities. Some hedging and profit taking (swing trading) has helped me to lower my ACB from the high teens to the low teens. A bit of luck, guts and strategy turned a 50k paper loss into 8k of losses. I can fix this with a few more options strategies and of course, a little more luck!

Regarding the Saudi's it's just a rumor right now, its been picked up by a few outlets a quick google news search can turn up some articles. I do think a production cut is possible, it's a win-win. 

A 10% supply cut that results in a 11.1% increase in price results in the same net revenue. The market was roiling over 1-2 million of excess supply. The Saudi's in 2009 cut production by almost 4 million barrels (if I recall correctly). A 1 million bdp cut is all that's required and we could easily see a price spike. For a scare commodity it makes zero sense to supply more at a lower price, especially Saudi Arabia that boasts about it's foreign reserves sufficient to whether any financial storm. If they don't need the money, why give away it...this is why I think the oil price collapse reeks of politics.


----------



## AltaRed

There is nothing for the Saudis to gain in cutting production and shoring up prices. It will not help shrink North American supply, especially US production. At some point I believe they will blink and cut back a bit to shore up price, but only after there has been quantifiable production decreases elsewhere, especially in the USA.


----------



## Chris L

AltaRed said:


> There is nothing for the Saudis to gain in cutting production and shoring up prices. It will not help shrink North American supply, especially US production. At some point I believe they will blink and cut back a bit to shore up price, but only after there has been quantifiable production decreases elsewhere, especially in the USA.


Yes there is. Math.

There's no way for SA to double their market share, thus it makes no sense to half the price of oil. The rational works both ways.

It's also correct that they may wait longer to see where the market settles to decide how much they really need to cut which will end up being less than they would had they not run this little experiment.

But if prices don't return to 'normal', they will cut. Makes zero sense otherwise. No one likes making 50% less money.


----------



## AltaRed

Chris L said:


> There's no way for SA to double their market share, thus it makes no sense to half the price of oil. The rational works both ways.
> 
> It's also correct that they may wait longer to see where the market settles to decide how much they really need to cut which will end up being less than they would had they not run this little experiment.
> 
> But if prices don't return to 'normal', they will cut. Makes zero sense otherwise. No one likes making 50% less money.


There is a risk SA would have to keep shrinking their production to maintain prices. As USA in particular (amongst others) increased their production, what is the risk of SA falling to a low producer? If they cut back 1 million bpd now to support prices, should they cut back another million bpd end of 2015 if the need is there? Then another 1 million bpd in 2016? Then they could become a 2 million bpd producer in 5 years. How is that going to work for them then? The Saudis know the world could be awash in oil at $100+ prices. There is no lack of development potential at those prices and hence the supply glut.

Best to bite the bullet now at 9 million bpd.


----------



## bmoney

AltaRed, I disagree with you.

Let's put some figures on this to add context. The US imports between 1MM to 1.5MM barrels of crude from SA and it's been this way for the past 20 years, albeit today it's at the lower end of the range, around 1MM bpd. Be it what it may, US Shale is not a major threat to SA, and US imports represent something around 15% of SA production. The market share narrative, its make believe, its a story that is easier to believe than not, because coming to one's own conclusion requires effort and undertaking. Meanwhile on the other side of the world that most of us never see, Asian demand has been growing by almost 1MM bpd per year since 2008. You don't have to look to hard to find this research, it's all on the EIA website. 

Each and every producer has their limit, in production capacity today, foreseeable capacity, political will, technology, management know-how, labour skill, appetite for risk, access to capital, and all in the context of demand and of course, Price. When oil was skyrocketing SA could not increase production, they have been tapped out at 10MM bpd for what seems like forever - remember that narrative? SA are pumping significantly more sea water to pressurize wells, it's a huge undertaking to maintain current production let alone expanding it. Back to the US, the shale revolution has been impressive because of the speed at which technology has been deployed to increase production, and this was largely financed by Wallstreet a lesson they seemed to forget they learned in the 80s. I don't completely accept the narrative threat of US shale to SA or for that matter OPEC. At the moment, the US cannot export crude without executive order, that might change one day, but then you'll have to slap on another $10-$20 per barrel for transportation charges, how competitive do you believe the US or Canada will be exporting crude across seas and at current prices that effectively allow most producers to just break even. US Shale is a greater competitive threat to Canada than SA. To increase capacity is to tap additional wells particularily the more costly ones. What's more plausible is that SA would like to remain relavent politically to their US ally, and oil is the only weapon they have, one which the US is very close to neutralizing.


----------



## Chris L

We go one with this forever.

But 100% (market share) of 50% (oil price) is still 50% money.

50% (market share) of 100% (oil price) is still 50% money.

However, SA does not have to cut market share by 50% to maintain 100% price. Therefore, the hope is that price will come up without touching market share in a way that is less than the net affect on overall revenue. I don't really care about any other particularities. Price is my only concern and this entire experiment relies on the price coming up, or if not, SA will cut production.


----------



## OptsyEagle

Has anyone read this article by Jeremy Grantham.

http://www.advisorperspectives.com/commentaries/gmo-why-were-we-so-surprised

A little long but he pretty much beats to death what he feels has happened to the price of oil, why the Saudi's have not cut production and what he believes will happen in the near future and longer term.

I am not usually a reader of people who give economic predictions but I do read Jeremy Grantham. You can tell, simply by reading his stuff, that he knows what he is talking about ... especially because he points out the areas where he might be wrong. That usually tells me when a guy has a full grasp on the situation. The pundits who never point out those areas are almost always wrong.

Anyway, some weekend reading for you, if it has not been posted before.


----------



## Chris L

Great article. I agree with his assertions. 

This also stood out (why he thinks SA messed up): "Second, the Saudis could probably have absorbed all U.S. fracking increases in output (from today’s four million barrels a day to seven or eight) and never have been worse off than producing half of their current production for twice the current price … not a bad deal."

This is why I think SA will end up tossing in the towel early on their experiment quickly restoring oil prices. They might even f-around with their output making investment in US fracking a fools game.


----------



## Eder

I am enjoying recent posts from both camps on oil, thanks to all for the effort!


----------



## AltaRed

I will continue to disagree though I agree every producer ultimately has production limitations, but $100 oil will buy a lot of development. SA does feel threatened by North American production increases (amongst others regardless* of demand increases), albeit no one really knows with any accuracy what the upper limit might be for NA production. If oil had stayed at $100 or more, it was only a matter of time, e.g. 3-4 more years at current development rates, before NA would be exporting surplus volumes. Canada and the USA would love nothing better than to ultimately supply Europe with some oil to reduce Russian influence on Europe given the pyschopath currently in power over there. Canada's East-West pipleine proposal would do just that. So would Keystone XL and other expansions out of the US Bakken. The current US restriction on exports is a red herring. Rest assured if the US could use their oil as a sphere of influence, they would do it in a heartbeat. Many people just are not thinking macro enough.

FWIW, I spent 30 years in the business. That does not make me 'more right' but I have seen discussion on oil be underestimated time and time again. All we do know is current geopolitics will change over time. The Saudis causing havoc in the marketplace with low oil prices, creates forward pricing uncertainty and undermines financial planning assumptions on development budgets. That is just what is required to halt/temper unabashed oil development which was getting out of hand and way too bullish. The best way to re-establish reality is to cause havoc and bankruptcies.

* At $100+ oil, a lot of global small producers have the ability to support increasing IEA demand projections. Even basket cases like Libya, Egypt, Syria, Iraq and Yemen can increase production at those prices, not to mention Brazil, Angola, Nigeria, Iran and even Mexico/Venezuela. It does not take much by that collective group to support IEA's annual 0.5-1 million bpd demand increases. So, for the sake of argument, demand growth can be met by marginal player supply growth. 

It really comes down to how Saudi, Russia, Canada and the USA play the game. Canada has the smallest capability of this group to expand production regardless of Harper's rhetorical vision of an oil superpower and thus has the greatest difficulty influencing the outcome. It could indeed be a loser. Bottom line is Saudi knows it must temper Russian and American ability/willingness to increase production and THAT is the end game in maintaining its place in the oil supply game. I believe there is no better time than now for Saudi to create havoc while still having major influence as the 2nd or 3rd largest player.


----------



## londoncalling

I am also following this discussion with great interest. Could you explain Canada's production expansion issues. My guess is they are pipeline related but your years in oil and gas are about 6x as much as mine and my knowledge is more of a micro than macro nature. Thanks


----------



## AltaRed

londoncalling said:


> I am also following this discussion with great interest. Could you explain Canada's production expansion issues. My guess is they are pipeline related but your years in oil and gas are about 6x as much as mine and my knowledge is more of a micro than macro nature. Thanks


Right now the main issues are transportation constraints, i.e. pipeline capacity especially either to the East or West coasts, but also to the Gulf Coast where Canadian heavy would likely still push out whatever remains of Mexican and Venezuelan volumes. Having said that, Canadian producers are still at a disadvantage because of: 1) the tolls required to move crude to tidewater (relative to some other major producing countries - Russia excepted) and thus a lower plant gate price for their oil, 2) the cost of developing and producing our crude oil is more expensive than most countries except maybe Russia due to higher labour and material costs, taxes and royalties, and 3) our industry and sedimentary basin size other than oil sands is much smaller than that of America, Saudi or Russia. The USA increased production in the last 5 or so years by as much as Canada produces by its entire industry!

The primary advantage we have (as do the Americans) is the rule of law and that is worth something. When I did development proposals for places like Angola, etc. versus North America, there was a risk premium required, i.e. a better rate of return just in case country politics went south (and sometimes did - like some companies recently found out with Yemen, Syria, Libya... and not so long ago Venezula with Hugo Chavez.

It is tough being in the oil business. One tries to envision 5-10-20 years out when deciding where to spend billions and it never quite unfolds that way.


----------



## sags

Would government land auctions be indicative of slowing exploration interest, or are they a minor factor in the macro view ?


----------



## gardner

A small amount of oil ships from the Trans Mountain Pipeline out of Burrard Inlet. Whose oil is it, where does it go and how is it priced?


----------



## AltaRed

gardner said:


> A small amount of oil ships from the Trans Mountain Pipeline out of Burrard Inlet. Whose oil is it, where does it go and how is it priced?


You would have to know who the shippers are (that own the oil) and to whom they sold each specific cargo too. Could be anywhere down the West Coast to the Far East. It will be priced at whatever price the shipper and the buyer negotiated. Probably related closer to WTI since that will likely be California pricing.


----------



## gardner

I did a bit of googling and it looks like, in 2012 at least, 90% went to the US and 10% to China. Mostly to California. It would arrive there with a similar value to Mexican heavy oil. I guess if it was bought at Hardisty as WCS it could be piped, shipped and sold at a healthy profit.


----------



## AltaRed

gardner said:


> I did a bit of googling and it looks like, in 2012 at least, 90% went to the US and 10% to China. Mostly to California. It would arrive there with a similar value to Mexican heavy oil. I guess if it was bought at Hardisty as WCS it could be piped, shipped and sold at a healthy profit.


It doesn't matter the point at which it was sold. It is who the buyer is and what is the comparable alternative for the buyer at his point of use (refinery). A California buyer would discount a point of sale at Hardisty by the amount of shipping charges it takes to more the crude from Hardisty to his refinery in California (which is really related to WTI prices, i.e. Mexican crude is priced to compete with WTI). 

Bottom line, the point of 'transfer' takes into account shipping charges and does not change the netback price the producer gets at his production point.


----------



## bmoney

Just thinking out loud, oil seems to be consolidating here around $50. The news headlines are still quite bearish, lots of bottom calls at outrageous prices of $10-$20 WTI, the huge oversupply from the EIA report, but the price is not reacting to the news like it did between July and December, we have had a few intraday rallies on days WTI was initially down 3% or 4%. This feels like a bottom is in but a retest is possible - I just don't think we are seeing new lows. I have a sense the smart money is moving in and/or the shorts are not poised to take risks on what might amount to a 10% move lower from here, that risk reward is unfavourable. The back-drop is a US refinery strike of 11 facilities that's affecting something around 1-1.25 million barrels of refining capacity. This seems to jive with the inventory build figure of 14 million barrels for a strike now over 2 weeks. Also Lybia, Syria and Northern Iraq are in shambles we could get a middle-east premium that is bouying the price. Barring a huge move tomorrow my covered calls will be paying off, I'm goig to look at writing a few more covered calls into March hoping that the volatility settlesdown a bit as we sway in the $50 range. Anyway my guess is as good as any


----------



## SkyFall

I usually don't really pay attention to Jim Cramer, but I have to admit that on this one he is pretty right about the fact that for Wall Street its all about ''guessing''

http://www.cnbc.com/id/102439886


----------



## 1980z28

I have a buy at 10 for 5k shares

sold 4200 at 12.00 last week


----------



## thepitchedlink

1980z28 said:


> I have a buy at 10 for 5k shares
> 
> sold 4200 at 12.00 last week


So, your thinking that we won't be seeing it go back to 7$ again? You think the first panic is going to be the worst? I'd like to buy some again as well....can't decide on my buy in number


----------



## SkyFall

thepitchedlink said:


> So, your thinking that we won't be seeing it go back to 7$ again? You think the first panic is going to be the worst? I'd like to buy some again as well....can't decide on my buy in number


buy call options, they have call options for Jan16.... you get the exposure of 100shares per contract for a fraction of the price.


----------



## 1980z28

thepitchedlink said:


> So, your thinking that we won't be seeing it go back to 7$ again? You think the first panic is going to be the worst? I'd like to buy some again as well....can't decide on my buy in number


I was even on the 4200,starting buying at just under 20

Have the 50k on hand,will watch,I do not see 20 dollar oil,I keep watching the futures


----------



## thepitchedlink

SkyFall said:


> buy call options, they have call options for Jan16.... you get the exposure of 100shares per contract for a fraction of the price.


ya, I haven't even begin to learn about call options yet.....some day.....


----------



## SkyFall

thepitchedlink said:


> ya, I haven't even begin to learn about call options yet.....some day.....


Oh alright, don't rush but I advice that you take a look at it, it can be a very useful tool


----------



## KaeJS

Jan 16 calls are pretty expensive.

About $2.50 for a strike of $11.

I guess it depends on if you think it will be worth more than $13.50 in a year from now. That could be a tough one if the earnings reports start lagging. I don't know. I don't feel comfortable buying calls for 1 year out. There are too many "unknowns" that can occur within a year from now.


----------



## AltaRed

thepitchedlink said:


> So, your thinking that we won't be seeing it go back to 7$ again? You think the first panic is going to be the worst? I'd like to buy some again as well....can't decide on my buy in number


Nothing is a given in the current oil environment, i.e. December lows could be re-visited. 1Q15 results will be telling....as the first full quarterly results at low oil prices, and with new assumptions about the impact of lower royalties and taxes for the 2015 fiscal year. The same thing MAY apply for a number of other companies, albeit there will be wide variations depending on which companies still have hedges in effect.


----------



## SkyFall

KaeJS said:


> Jan 16 calls are pretty expensive.
> 
> About $2.50 for a strike of $11.
> 
> I guess it depends on if you think it will be worth more than $13.50 in a year from now. That could be a tough one if the earnings reports start lagging. I don't know. I don't feel comfortable buying calls for 1 year out. There are too many "unknowns" that can occur within a year from now.


To me its still cheap compare to buying the 100 shares, to me it's approx a 5 to 1 leverage.... if those so-called forcaste are true that oil should be back up around $60-$70 toward the end of the year... it should be good.

thats pretty much my play on the oil recovery... i get that its super speculative and not meant for everyone but to me to make a trade on approx 10-11 months from now its a very little price to paid.

I dn't feel comfortable to buy short term call right now.... look at recent weeks it was way too nerve racking hahahah

what I am trying to explain is that in my case, seeing the oil market tumbling for the last few months, If I would want to lower my ACB I would have to keep buying and exposing more and more money, what I love about options is for a fraction I can lower my ACB (by using the profits to offset) thats why it's working for me. But I have to admit that I bought mine at $0.89 for jan16 a strike at $11


----------



## KaeJS

I understand your point.

I would just be more inclined to buy the stock outright and keep selling calls and collecting dividends until Jan 16 to lower my ACB through premium collecting.

But I guess that's what makes the market go 'round.


----------



## bmoney

KaeJS said:


> I understand your point.
> 
> I would just be more inclined to buy the stock outright and keep selling calls and collecting dividends until Jan 16 to lower my ACB through premium collecting.
> 
> But I guess that's what makes the market go 'round.


I'm with you on this strategy. I am contemplating selling March or April $14 calls, just hoping we get a bit of a pop next week so that I can garner a greater premium. I don't like buying leaps, never have and don't quite get it. Using the example mentioned earlier $11 leap costs $2.50, that is like buying and hold the stock with downside risk to $8.50. If you're willing to take that risk, you may as-well buy it and capture all the upside; unless you've got better uses for your money. Also with leaps you're paying a big premium for the time value, I would rather be a seller of a leap then a buyer. You could lock in upwards of a 22% return if you're okay with giving up some upside for taking some downside risk.


----------



## scientist

bmoney said:


> I'm with you on this strategy. I am contemplating selling March or April $14 calls, just hoping we get a bit of a pop next week so that I can garner a greater premium. I don't like buying leaps, never have and don't quite get it. Using the example mentioned earlier $11 leap costs $2.50, that is like buying and hold the stock with downside risk to $8.50. If you're willing to take that risk, you may as-well buy it and capture all the upside; unless you've got better uses for your money. Also with leaps you're paying a big premium for the time value, I would rather be a seller of a leap then a buyer. You could lock in upwards of a 22% return if you're okay with giving up some upside for taking some downside risk.


http://www.theglobeandmail.com/repo...-long-delayed-oil-sands-mine/article23153131/

Shell pulls plug on long-delayed oil sands mine

not looking good...and I am no expert, but if I add what I have read, 1. Oil in Alberta is not cost effective. 2. Add to that, environmentally unfriendly. 3. Saudi's plan is to shift the economy by lowering their prices - and they can do this fairly easily. 4. Everyone argues, Oil will go up again. Yes, but even then, are the people not buying oil going to be aiming for the cheapest possible deal ie. still the Saudis? They have shown from these past couple of events that they can make things way cheaper without any hampering on their side. 5. Reserves. Yes, we have lots of reserves. But again, reserves are there to be sold, for a profit. If the Saudis are willing to do what they're doing right now, they're never going to sell their oil for the same price or more expensive than our oil. I just don't see a way out. But again, unless I'm not seeing something, as I've not followed this from the very beginning. Hopefully Canadian Solar drops again so I can buy in


----------



## SkyFall

It's in the darkest moments where you need to be strong 

@scientist, no offense, but you seems to rush things with ETFs, mutual funds, bonds and now solar stocks... take it easy don't rush things. Take your time to really do the analysis. Investing isn't as straight forward as it seems. Sometimes market will react in ways that will drive most of us crazy. my2cent


----------



## scientist

SkyFall said:


> It's in the darkest moments where you need to be strong
> 
> @scientist, no offense, but you seems to rush things with ETFs, mutual funds, bonds and now solar stocks... take it easy don't rush things. Take your time to really do the analysis. Investing isn't as straight forward as it seems. Sometimes market will react in ways that will drive most of us crazy. my2cent


Hey Skyfall, no offence taken at all! I'm just doing a lot of reading and trying to learn, hence all the questions... I'm not asking questions in the way that I'm saying that I'm about to do this (stocks), but am trying to figure out how I would react if I were in the position to. Also, as in my previous post the situation appears really clear cut and I like to hear other people's opinions on the situation - perhaps there's something really important that I'm just blind and not seeing. That being said, I am going no where beyond the potato right now  - I have read too many stressed posts on this forum to not realize that the market is complex...That being said, I see that you are trying to prevent me from making dumb expensive mistakes, and appreciate it very much!


----------



## SkyFall

scientist said:


> Hey Skyfall, no offence taken at all! I'm just doing a lot of reading and trying to learn, hence all the questions... I'm not asking questions in the way that I'm saying that I'm about to do this (stocks), but am trying to figure out how I would react if I were in the position to. Also, as in my previous post the situation appears really clear cut and I like to hear other people's opinions on the situation - perhaps there's something really important that I'm just blind and not seeing. That being said, I am going no where beyond the potato right now  - I have read too many stressed posts on this forum to not realize that the market is complex...That being said, I see that you are trying to prevent me from making dumb expensive mistakes, and appreciate it very much!


That's very good. Getting into the investment world means reading a ton of things, I think you are really on the right track (especially with the question lines you have). If I may, remember that everything you read isn't the truth and very very often it's only opinion (like what I am writing at the moment).

I once was where you were, getting into this world seems overwhelming, you read things left and right and they often have contradicting point of views... I am sure you will be able to navigate through all this and form your own opinions.

Remember, stick with what YOU are comfortable and that investing is a no strike call game, you can wait as long as you don't feel it's the good one. Sorry about the solar statement, keep going with questions I thought you were about to buy some stocks right away.

Cheers mate


----------



## KaeJS

The reality is that the most common sense answers are usually the ones that prevail and end up being the case. It is fear and greed that will cloud your judgement. Oil at $20? I highly doubt that.

Oil will go up again. Just as AAPL will continue to make money and BlackBerry will languish.
Solar will not make money currently because it isn't yet cost effective, nor popular. Also, people tend to care about money more than the environment.

The Saudi's may be able to produce oil efficiently, but it also doesn't mean they want to sell it cheaply. More importantly, they aren't going to want to sell it cheap for any extended period of time. The Saudi's still benefit from a higher oil price (as does _almost everybody_ except for consumers)


----------



## 1980z28

will we see 10.00


----------



## thepitchedlink

Hhhhmmmmm, hoping so........


----------



## bmoney

Oil is up today, and WTI is only down 1.5% over the last week, and SCO is back above $60, yet COS is sinking. I can only attribute this to 2 things, 1) Three crude carrying train derailments within 1 month is not good for business. Obama trash talking the oil sands & keystone XL today. I'd be interested to hear your theories.


----------



## SkyFall

pretty frustrating hehhehehe


----------



## bmoney

Yea I'm bitter because I didn't sell $14 March calls like I wanted to and left money on the table. 

COS is falling apart on low volume, not sure what to make of it, just troubling me because WTI and SCO have firmed up the last month and COS is showing lots of relative weakness.


----------



## SkyFall

Yeah thats what gets to me too is seeing WTI get some traction but nothing for COS.... oh well we will see... i really need to stop looking at it on a day to day basis hahahahah.


----------



## Ag Driver

SkyFall said:


> i really need to stop looking at it on a day to day basis hahahahah.


Same. I bought with long term intentions and watch it on a daily basis. I'm still up 10%, not terribly concerned.


----------



## BCouto

I might be looking at a re-entry soon :biggrin:


----------



## SkyFall

Ag Driver said:


> Same. I bought with long term intentions and watch it on a daily basis. I'm still up 10%, not terribly concerned.


thats pretty good! I averaged down through the 18s so I am down much much more. It means you got it at almost near bottom (so far)

I have a dream......... 

That..... One day.....

I wake up as usual....... around 5-5:30am.....

Look at my sexy naked girlfriend that sleeps next to me...... smile.....

And then....... pick up my phone.....

Tap on the web browser icon......... type in ''cnbc.com''......

And read....... _BREAKING NEWS: OPEC decided to cut their supply_..... go back to sleep happy...

The End.......


----------



## hboy43

SkyFall said:


> I have a dream.........


I have the same dream. Not about the Saudis ... rather looking at YOUR sexy naked girlfriend that sleeps next to me......:cower:


----------



## Homerhomer

hboy43 said:


> I have the same dream. Not about the Saudis ... rather looking at YOUR sexy naked girlfriend that sleeps next to me......:cower:


If Skyfall wants the oil to go up maybe he should start sleeping with the Saudis ;-)


----------



## InvestmentIQ

*Deja vu?*

Well, at those low levels again. Feels like deja vu. Oil at $43.00

Hmmm...... :confused-new:


----------



## peterk

Picked up a bit more at 8.83. Total 930 shares @ 10.14 ACB.

Expect a plunge any minute now :stupid:


----------



## SkyFall

peterk said:


> Picked up a bit more at 8.83. Total 930 shares @ 10.14 ACB.
> 
> Expect a plunge any minute now :stupid:


hahahah your luck is as bad as mine hahahha the investment god is against us hahahah


----------



## My Own Advisor

peterk said:


> Picked up a bit more at 8.83. Total 930 shares @ 10.14 ACB.
> 
> Expect a plunge any minute now :stupid:


You wonder how low it might go? Good on you to buy more...currently in saving mode for more COS, CPG, SU, CNQ, etc.


----------



## Ag Driver

If only I had more money, I would be topping up some more!


----------



## Flash

COS, BTE to big to fail if oil continues into the 40-60s throughout the year and maybe next? Or would they at least be bought out, finally increasing their share price anyway


----------



## AltaRed

Flash said:


> COS, BTE to big to fail if oil continues into the 40-60s throughout the year and maybe next? Or would they at least be bought out, finally increasing their share price anyway


They would be bought out by someone. They are never too big to fail. Remember Dome Petroleum (eventually bought by Amoco).


----------



## gardner

AltaRed said:


> They would be bought out by someone.


Sure. When COS is at $1.60 it will get bought by SinoChem or Chennai Petroleum or something for $2.10 -- big whoop if your ACB is in the $11 to $15 range. Holders like us will get bubkes.


----------



## peterk

peterk said:


> Picked up a bit more at 8.83. Total 930 shares @ 10.14 ACB.
> 
> Expect a plunge any minute now :stupid:


Hey look at that. Finally some decent timing for once. Of course now it is _definitely_ going to plunge... for being so cocky. :biggrin:


----------



## Getafix

Don't jinx it! I'm stuck at 10.84!


----------



## SkyFall

man this can screw the oil market today, already down 4% for WTI and 2.15% for Brent...

OPEC oil minister '' _Oil prices fell once again Thursday, after a minister from the Organization of the Petroleum Exporting Countries (OPEC) said the group did not have a choice with regards to cutting oil production because it did not want to lose its global market share._"

http://www.cnbc.com/id/102518316


----------



## InvestmentIQ

Omg, sky is falling again. :distress: 

COS is going to be down big today as per oil price.


----------



## My Own Advisor

Sky falling is a good thing when it comes to stocks. Even if COS falls to $7 yield will remain under 3%.


----------



## Flash

thinking of waiting until Fri/Mon and buy CPG. I don't know how much lower can the oil drop. Every week rigs are being shut down.


----------



## InvestmentIQ

My Own Advisor said:


> Sky falling is a good thing when it comes to stocks. Even if COS falls to $7 yield will remain under 3%.


I was just being sarcastic. Or trying to.


----------



## Fraser19

Happy to see this one back in the green for me.


----------



## My Own Advisor

It will come back...it will take time...but it will come back...


----------



## Getafix

Same here, i'm just sad that i gave in to all the bad news a few weeks ago and sold off half of my shares for a loss. Should've just stuck to my gut and tuned out all the crap, oh well lesson learned!


----------



## SkyFall

I just avoided oil news and looking at daily quotes on my oil holdings... except for today, I accidently look at it...  feels good!


----------



## InvestmentIQ

My Own Advisor said:


> It will come back...it will take time...but it will come back...


Agreed!


----------



## Synergy

Yikes, rough day for LRE today - down close to 12%


----------



## Ag Driver

1980z28, What is your latest take on this guy. I know you watched and held it for quite some time. I wouldn't mind securing some profits if this thing is going to sled ride down again. I'm up over 30% at this point, so I don't want to get too greedy.

Thanks for your input.


----------



## Getafix

Wow you got in at a good price! I'm not 1980, but i'm up over 10% and am going to wait out just a tad bit more. So far the trend is pretty strong, when it changes i'll probably cash out.


----------



## Bistouri

Ag Driver said:


> 1980z28, What is your latest take on this guy. I know you watched and held it for quite some time. I wouldn't mind securing some profits if this thing is going to sled ride down again. I'm up over 30% at this point, so I don't want to get too greedy.
> 
> Thanks for your input.




I'm in the same boat as you. Just sold all at 11.71 . Will purchase again when it drops.....likely after 1st quarter results are posted (it's going to be a bloodbath)
.


----------



## Ag Driver

I chickened out and took a cool 33% profit. 400 @ 8.955, sold all at $11.98

Now to play the waiting game.


----------



## Getafix

Same here, i sold at 11.99, might buy in again if it drops a decent amount. I'm long in RDS.B, so enough coverage in oil for now.


----------



## peterk

Sold 130 Shares at $12.03. Still hanging on to 800 shares though.


----------



## bmoney

From a purely technical perspective, if this stock holds $12 its a clear path to $13 possibly $14, there's still a massive gap to fill. I never disagree with taking profit, but now is not the time to bail. Theres a higher probability of oil ending this year at $60 or $65 than $40, and COS will be worth much more than $12. Those that bought at lower prices the risk/reward is in your favour


----------



## My Own Advisor

Here's hoping!
http://calgaryherald.com/business/energy/canadian-oil-sands-ripe-for-takeover-analyst-speculates


----------



## SkyFall

I hope COS will keep going up so if a takeover happens I will cover my ACB


----------



## peterk

peterk said:


> Sold 130 Shares at $12.03. Still hanging on to 800 shares though.


Oops.


----------



## Getafix

Getafix said:


> Wow you got in at a good price! I'm not 1980, but i'm up over 10% and am going to wait out just a tad bit more. So far the trend is pretty strong, when it changes i'll probably cash out.


Should've listened to my own advice!


----------



## 1980z28

1980z28 said:


> I have a buy at 10 for 5k shares
> 
> sold 4200 at 12.00 last week


Purchased cos at 10.75 on april 8 and ftt at 23.25 on march 25 will keep adding for now

Will hold both 

When you watch 4 days a week you see and make your best bet


----------



## Toronto.gal

peterk said:


> Oops.


Hooray, you kept 86% of your shares!


----------



## peterk

^ At least I did that thank goodness. And I haven't sold any LRE yet!

If oil takes another dip down into the 40s again I'm going to invest into Alberta companies big time. It'll either be a disaster and that ends with me crawling back to Ontario flat broke, or will be the foundation for my early retirement!

*Currently have 28k of my 57k portfolio invested in "western Canada" companies.


----------



## SkyFall

Sold my first ever option today with a very little profit in term of money but good return in term of percentage... it was a very very little trade since it was my first trade with a option and didn't want to risk too much.

Sell to close: COS C 17APR15 11.00 

with a return of approx. 68% before fees.


----------



## Toronto.gal

^ And you didn't even finish M. Sincere's book I think you said. Congrats!

*PerterK* - You'll definitely be an ER, just not at 30, right? :biggrin:


----------



## peterk

Well I would be if I could figure out how to make 68% flipping options contracts like Mr. Bond there... ^^


----------



## SkyFall

peterk said:


> Well I would be if I could figure out how to make 68% flipping options contracts like Mr. Bond there... ^^


Im pretty noob when it comes to options, by T.Gal recommended me a very good book, easy to understand and you don't have to go throught the more complex startegies, which is what I did, I am sticking with the basic strategies.

Take a look, the book is pretty cheap '' Understand Options 2E by Michael Sincere ''


----------



## KaeJS

SkyFall said:


> Sell to close: COS C 17APR15 11.00


Congratulations.

Now, I'm curious. Why did you sell to close?

Why not wait until tomorrow, or why not take posession of the stock?

Surely it costs money and commissions to STC the option. Do you not think COS will go up tomorrow/Friday?
Do you not want to own it long term?


----------



## SkyFall

KaeJS said:


> Congratulations.
> 
> Now, I'm curious. Why did you sell to close?
> 
> Why not wait until tomorrow, or why not take posession of the stock?
> 
> Surely it costs money and commissions to STC the option. Do you not think COS will go up tomorrow/Friday?
> Do you not want to own it long term?


The reason is that over the course of the past few months, every time that particular option went up (in the profits) I decided not too sell, because I thought it would go up more... but every time oil had a great run, right after it has some setbacks which make that option drop down. Since I already have other options on COS that are currently in the profits (with triple digits percentage) I wanted to cash in that little tiny trade just so I can brag that my first option trade was profitable heheheh :biggrin: 

Also, why I didn't simply wait and exercise the right is that I am already heavily invested in the energy sector (both US and Canadian), I didn't want to add more... especially when I don't know if the recent pop is due to temporarily market attention shift or it's truly a fundamental change.

I do think that oil will go steadily up, but on that particular option coming to the deadline, I didn't want to be too greedy.


----------



## KaeJS

Understandable.

I am thinking at this point we are going to be slow and steady upwards. Very slow, mind you. But I don't think we are going sub $50bbl again.


----------



## bmoney

I reduced some risk and took some profits on today's strength, sold 2000 shares at 13.28, still holding 3300 shares. After being down 50%, to up a few percent it's a prudent move and gives me some leeway. 

I think the chance of an acquisition is low, and although I am bullish on oil to the end of this year, from a technical perspective the stock is over-bought (RSI 78), the gap has been filled, and I expect WTI will hit some resistance at $60. I'm concerned about OPEC Iran, and US inventories short run. Don't want to chance everything after digging myself out of a huge hole, I will buy more on a pull back as opportunities present themselves.


----------



## peterk

KaeJS said:


> But I don't think we are going sub $50bbl again.


What is this based on, if I may ask?


----------



## 1980z28

sold some cos picked up more csh.un and are


----------



## bmoney

I'm going to pat myself on the back. Kudos to 1980z28 as well


----------



## 1980z28

Just checked ,yesterday sell price was 13.30 

Did not think that would take place

Very little oil left in my holdings(equities )but in e funds there is oil only have 1000 TDB 900


----------



## KaeJS

peterk said:


> What is this based on, if I may ask?


The fact that the rig count keeps dropping in the ocean and summer is around the corner.

Now you also have China trying it's hand at increasing their growth.

This all spells Demand Increase and Supply Decrease. Also, keep in mind that low oil prices are not good for anyone.


----------



## AltaRed

I wouldn't bet on oil not dropping below $50 again this year. It partly depends on the megaprojects that come on stream this year to dampen any supply decreases. That should not be overly hard to find if one digs deep enough. There has to be several offshore platforms currently under development coming on stream this year and next. Canada has its own examples in the oil sands and perhaps on the Grand Banks as well.

Further, platform based rigs on existing producing platforms will continue to drill to keep platform production up as a way to pay for the high proportion of fixed costs for such ventures. Those rigs may not be included in the offshore rig count. The real supply decreases will come from land based light oil and shale oil.


----------



## bmoney

I wouldn't bet on oil never breaking $50 this year either, I would bet we do not see a new low.

Oil markets are getting jittery over Iran today, that's the story. I don't believe Iranian oil ever stopped flowing into the marketplace, but it's news that will move prices.


----------



## KaeJS

Well, everyone has their own opinions of course.

Sub $50/bbl oil is just stupid IMO.
The whole world runs on oil and I am definitely a buyer at these prices.

Just go look at every single oil correction in history. It's no surprise that it comes back in value. It's a commodity, not the YellowPages.


----------



## AltaRed

KaeJS said:


> Sub $50/bbl oil is just stupid IMO.
> The whole world runs on oil and I am definitely a buyer at these prices.
> 
> Just go look at every single oil correction in history. It's no surprise that it comes back in value. It's a commodity, not the YellowPages.


Of course it will come back. It is a question of when and whether one has the patience to 'stay the course'.


----------



## sags

Oil consumption has been falling in the US since 2004 and peaked worldwide in 2010.

In the US, vehicles are more fuel efficient than ever before, there is a transition to natural gas and alternative energy, and the population is aging and will use less fuel.

China's growth has slowed considerably, and their roads are so congested that vehicles can only drive on alternate days.

Many of the third world countries don't have the roads or highways to accommodate a big influx of vehicles.

Vehicles can barely move in India, and even in North America big cities are falling into traffic gridlock.

The world will need oil for some time into the future, but that doesn't mean they need high cost Canadian oil.

The rest of the world could care less what the per barrel cost of production is in Alberta. 

Oil is like any commodity. The price follows the cheapest supplier. Look at potash and wheat prices in Canada. They follow world prices based on supply and demand.

The Saudis have said their biggest concern is falling world demand, and that is why they are so adamant in protecting the market share they have.

In Canada, we should be looking at our future beyond the days of oil.

People often say that advancing technology will solve many of our problems, but don't attribute the same benefit of technology to eliminating the need for oil.

Technology is already improving production in shale gas and allowing the restoration of abandoned wells.

Unless technology improvements allow the Canadian operators to improve their cost of production, they aren't going to be competitive.


----------



## Synergy

AltaRed said:


> Of course it will come back. It is a question of when and whether one has the patience to 'stay the course'.


The other question in my mind is whether an individual company will be able to weather this storm, for how long, etc. That's why I decided to play the bottoming of oil with XEG.


----------



## bmoney

World oil demand DID NOT peak globally, it continues to increase, and is projected to reach 94 mbd of demand by the end of this year according to IEA. Oil consumption has waned in Europe and NA, mostly due to natural gas use in the production of energy.


----------



## 1980z28

I have a buy at 12


----------



## Eder

I know I flunked my economics class in 1973 but I think dropping the price of something by 50% should increase demand. Or is oil different?


----------



## AltaRed

Eder said:


> I know I flunked my economics class in 1973 but I think dropping the price of something by 50% should increase demand. Or is oil different?


No, oil is not different BUT the impact (demand increase) will be less than what people think it could be. Demand increases have happened every time oil prices have dropped considerably for any length of time but not materially. 

And global demand continues to climb with the odd aberration from time to time, such as during times of global recession. Where it will eventually peak is anyone's guess.


----------



## Fain

Eder said:


> I know I flunked my economics class in 1973 but I think dropping the price of something by 50% should increase demand. Or is oil different?


Your right about that and oil demand is increasing.


----------



## Taraz

So I've noticed that some of the stock sites (Financial Post, Motley Fool Canada) are pitching this as a takeover target (e.g. Suncor or Imperial Oil might try to take them over). However, wouldn't it make more sense for Exxon to just continue running it into the ground and then buy the rest at a discount? It's a bit like the long-term slum landlord strategy - buy some houses in a not-so-great neighborhood, rent to losers & let it run down to make the value drop, buy up more houses in the same area as values drop, then later on fix them all up ("revitalize" the neighbourhood) and cash out.


----------



## protomok

^ I think the COS panic selling days are gone at this point. COS is claiming they break even at $ 60 CAD / barrel (see the "Adjusted Break-Even Costs Based on 2015 outlook"  here ). SCO is sitting at $70.22 CAD / barrel at the moment so they are presumably making a small profit but I'm thinking more like break even.

As the year progresses pretty much everyone is predicting oil to continue recover. If I was a Suncor I would move on acquisitions sooner rather than later.


----------



## AltaRed

US production may have peaked given week ended Apr 17th production is back to week ended Mar 6th production, albeit one month does not yet set new direction.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

Nor do we know what significant new offshore production is due to come on throughout 2015. The next few months will continue to be interesting based on these numbers and the upcoming OPEC meeting in June.


----------



## bmoney

AltaRed said:


> US production may have peaked given week ended Apr 17th production is back to week ended Mar 6th production, albeit one month does not yet set new direction.
> 
> http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
> 
> Nor do we know what significant new offshore production is due to come on throughout 2015. The next few months will continue to be interesting based on these numbers and the upcoming OPEC meeting in June.


US production seems to have peaked, I'm not sure exactly how the rig count affects production, how much time it takes to see the changes digested. It's interesting to see Saudi Arabia both raise production and prices; I think they are testing the market as US supply issues are essentially a domestic concern - although I fear it's a Canadian concern as-well. With the front running nature of WTI contracts, we are already into June pricing. June and July happen to be the peak months for gasoline demand which likely explains some of the short term run-up (in light of supply increases). I would feel more comfortable seeing strong demand continue into May & June, carry us into the fall, otherwise prices could come under pressure again come Q3. I still believe we will see $60 WTI this year, possibly $65 if inventories can decrease for a string of weeks; but I think this is going to be closer to a 24 month U shape recovery. 

Considering hedging my 3300 shares with another covered call, just waiting for the right time.


----------



## bmoney

In again for 2000 shares @ $12.03 (sold a few out of the money May calls to bring down my ACB). Hoping for a pop. Will close out my position at $13. I guess you can say I'm gambling.


----------



## bmoney

Anyone following this? Nice pop today, hopefully it hits my $13 target for a quick 2k.


----------



## 1980z28

I got out at 13.10 a while ago

Still have a buy for 5k shares

I think you will hit the 13 soon,can always sell 1/2 and wait and see


----------



## bmoney

I'm out! That was an easy $2,000 trade


----------



## 1980z28

bmoney said:


> I'm out! That was an easy $2,000 trade


Nice to see that was easy


----------



## SkyFall

wow nice jump this morning! 

grats bmoney!


----------



## Toronto.gal

Volatility is your friend!


----------



## bmoney

Thanks fellas, sometimes you get lucky. I was betting on a positive EIA report that would lift WTI and COS


----------



## peterk

Sold another 100 shares at $13.20. Still holding 700.

edit: Will be back in for more if it goes to the 11s again.


----------



## bmoney

Earnings report was just released, loss of 38 cents vs consensus estimate was 22 cent loss. Seems like most of the losses were forex. Management did better than expected on cost cutting, and guided upwards, production was slightly ahead of Q1 last year. I'm quite surprised the cash cost of production is now around $36/bbl. With management predicting average sale price of $61 (and SCO currently well above that), lower operating costs and savings and the higher end of the mid-point range, over-all I'm feeling pretty good. Now let's see what the market thinks of this tomorrow.


----------



## Fraser19

Yep this looks a lot better than I thought it would.


----------



## bmoney

I'm not anticipating a fed rate hike in Q2, possibly not at all this year. Makes me think we've seen the full effect of forex losses in Q1. If WTI and USD can simply hold here, that would already be a huge plus, any improvement could be massive.

Someone on the call couldn't help but ask about the buyout speculation, the CEO said something to the effect, selling at this low price is not something we are focused on.


----------



## SkyFall

so far at 9:35 am a nice jump of 2.29%


----------



## bmoney

Nice to see the market agrees. I think we consolidate around the $13-$14 range as WTI begins to meet resistance at $60. I am very optimistic about the share price over the next 12-14 months


----------



## Barneystinson

Whats your feeling about the NDP being elected there and the stock losing 6% today?


----------



## bmoney

It is very difficult to anticipate, this is politics afterall and many competiting interests taking sides, most (if not all) with a profit motive. My gut feeling is that the NDP will likely raise taxes, but will leave the energy sector alone otherwise. The NDP will come to realize if they do not already, that many stakeholders are tied to the energy economy, they will not want to disrupt that, too many jobs at stake.


----------



## AltaRed

Also most mega players in the oil sands, I believe, have fiscal contracts that are not affected by legislative changes. IOW, changes from a royalty review would not affect the existing/developing big mining projects as an example (just new ones not yet sanctioned). That is to protect against regulatory extortion on long payout mega developments. That is the way it is done in banana republics and Canada is really no different... just one with law and order.


----------



## newfoundlander61

I don't think it is as bad as some media are reporting, if we get a few more days down it could be a nice time to enter for sure.


----------



## peterk

Bought another 100 shares at $12.20. I'm not happy about this NDP government, to be sure. But I don't think a 10% decline is warranted. There won't be much of a tax hit right now since they aren't turning a profit anyways, the royalty increase probably won't happen right away either, and the NDP may be out before long anyways. I don't think a mine with 60 more years of production deserves a 10% haircut just based on speculation about a new government.


----------



## 0xCC

It will be interesting to see if the Alberta NDP will do for the NDP parties across the country (most notably the federal party) what the Ontario NDP party did 25 years ago... I would think that if they fiddle too much with their revenue streams (income tax, sales tax, royalties) they could very easily get slammed as hard in the next election as the PCs did in this election.

On a side note, how can the provincial PC parties blow elections so badly? Last year it was Ontario, this year Alberta and it seems like in both cases they basically did it to themselves - their opponents didn't have to work too hard to out-campaign the PCs.


----------



## none

peterk said:


> Bought another 100 shares at $12.20. I'm not happy about this NDP government, to be sure. But I don't think a 10% decline is warranted. There won't be much of a tax hit right now since they aren't turning a profit anyways, the royalty increase probably won't happen right away either, and the NDP may be out before long anyways. I don't think a mine with 60 more years of production deserves a 10% haircut just based on speculation about a new government.


Or perhaps it's due to something completely unrelated (which is far more likely).


----------



## Toronto.gal

0xCC said:


> ...blow elections so badly? *Last year it was Ontario..*.


I guess it had been that experience that made me think anything is possible, even in Alberta. 

But I didn't really think the NDP would win, but even so, took no chances with my CAD short-term trades closing them all on Tuesday. I don't think many were surprised what such a win would mean for the stocks, at least in immediate terms, so when I saw CAD energy stocks go up in pre-trading hours on Wed., I had been surprised it was reacting to seemingly the other + oil news and not to the election results, except the surprise ended shortly when I saw the bid/ask spread. For example, for BTE there had been a difference of about -5% [USD $19.55/$18.60]. I wasted no time to place buy orders at -10%. 

I'll take advantage of the roller-coasters & not worry about it.


----------



## peterk

And what are you assessing that on none? Surely some hard fact and not your own bias? (as we all have)

Oil goes up $2 in 2 days and the Alberta energy index, XEG, goes down 5%. That's my evidence of the market decline due to NDP shocker. Obviously it's not all the reason of the price move, maybe only part, or maybe it's due to something completely unrelated as you said. It is evidence though.

So where's yours? Or are you just throwing darts in the dark as much or more as what you're claiming us conservatives types are dong?


----------



## Fraser19

You guys figure the decline is due to the NDP election or is there anything else going on causing this one to sink?


----------



## bmoney

Some of it is due to the election, there are also fears that oil has rallied too far too soon and not enough damage was done to the frackers, that as we approach $65 or $70 the rig count will start to increase. People are also keeping a close eye on inventories which are still very high. Personally, I think they are right and this is closer to a 24 month recovery than 12; that does not mean it is not a good time to buy and hold, just be selective about the companies that can weather the storm. Keep in mind, $60 WTI is still very low and below the cost of many producers; there is room for WTI to settle in a new lower normal range of $70-$80 where everyone can make money and the market can find an equilibrium. 

I have 20 May $13 covered calls that expire on Friday. I will look to sell a $14 June covered call, and hoping we get a bit of a bounce going in to the June OPEC meeting.


----------



## bmoney

Taking a beating the past few days, hoping 50 MA holds. 

SCO is trading near the top of the range this year around $77, if this keeps up COS will be in good shape.


----------



## peterk

Bought a bit more at $11.00


----------



## thepitchedlink

Got some more at 11.19


----------



## bmoney

thepitchedlink said:


> Got some more at 11.19


Likewise, picked up 2000 shares at 11.175. Hoping to catch a bounce back


----------



## bmoney

bmoney said:


> Likewise, picked up 2000 shares at 11.175. Hoping to catch a bounce back


Getting smoked! No idea why. SCO trading around $76-$77. EIA report was good and showed a 2.8 million inventory decrease, more than expected. Loonie broke 80 cents. Wild fires are not in the area of COS. Volume has been pretty light. I think this is a technical move lower and will continue to hold. Hoping for an upside surprise for Q2 earnings if SCO continues to trade above $70 (above COS guidance) like it has in April and May.


----------



## janus10

bmoney said:


> I think this is a technical move lower and will continue to hold.


Do I have it right that it is now below 50, 100 and 200 MA?


----------



## bmoney

janus10 said:


> Do I have it right that it is now below 50, 100 and 200 MA?


Indeed. COS is significantly underperforming other energy producers. My guess is people confusing COS for the area of the oil sands hurt by the forest fires.


----------



## OnlyMyOpinion

The StatsCan news certainly doesn't help. Per the Huffington Post: *Canadian Oil And Gas Firms See Largest Profit Collapse On Record, And ‘It's Not Over'*


----------



## AltaRed

Thomson Reuters apparently has a nice summary of TSX performance for the first quarter and it was something similar. O&G was a disaster.


----------



## thepitchedlink

And down again. Might be an interesting week with the OPEC meeting......


----------



## bmoney

thepitchedlink said:


> And down again. Might be an interesting week with the OPEC meeting......


Meaningless action this week, volume is insignificant. We had another bullish EIA report. The news about the NDP carbon tax and royalty review, coupled with the fires has been negative for this stock.

Neutral about OPEC on Friday. They are pumping 1.2MM bpd over quota, they could make it official and simply up the quota to 31MM bpd, but they know it would be negative for crude prices and will likely maintain existing quota and continue the course. 

On the bright side, SCO is up to $80 and has been over $75 through May. I'm hoping Coker 3 is back online, COS May production was about 138,000 bpd, the planned outage lopped about 62,000 bpd from normal production. Hoping for a return to normal production without surprises. If WTI can stay in the $57-$62 range the rest of the year, COS will be in great shape due to the SCO premium over WTI and some of the cost cuts.


----------



## bmoney

Spent the better part of an hour going through every trade on COS the past 12 months. ACB is now $11.72, that's from an original ACB of $21.51 in June 2014 on 5300 shares. Goes to show that active money management is worth something.


----------



## bmoney

Sold 33 July $12 calls for 23 cents - you can check todays volume for confirmation. I'm looking to scale down my position, and take advantage of some of the volatility. 2000 shares are unhedged. I just might make it out of COS in the black by end of year, will need a little luck to make it happen.


----------



## thepitchedlink

Below 9$ now......hmmm


----------



## Ag Driver

All of my cash is tied up again, otherwise I would be back in at this price.


----------



## gardner

I doubt it's hit bottom. There could still be a deal with Iran and new sanction-free Iranian production flooding the market to drive oil down another 20%.


----------



## Canadian

I see most energy down today and there's COS down 5.7% at the moment - quite a bit lower. Thinking it could be a good opportunity to add to the position.


----------



## none

Ouch.


----------



## Fraser19

Been a good ride, from up 35% to down 33% within 6 months. 
Those takeover rumors sure did drive this stock up for a while. Now that the share price is depressed like this I wonder if another round of take over rumors will emerge? At this price I would imagine it would look like a nice takeover target. But realistically I don't actually know. 
Q2 numbers will be interesting, does anyone want to speculate on what the Q2 results will look like?


----------



## bmoney

Q2 will be terrible, not sure if that's priced in already. I think the market will be focusing on how well they can manage costs/debt. Production was down significantly because of planned maintenance. Syncrude was trading above $70 for most of Q2, and as high as $77 - it's been beaten down to $64 recently. The drop in the loonie will increase their non-realized losses on forex due to USD debt. June production was excellent 126k+ bpd, hope they can keep it up, higher production levels will prove the success of recent investments and lower their cost per barrel.

They have operated in a lower price environment over the past 40+ years, if they can keep costs down they will do fine.


----------



## none

So a screaming buy then?


----------



## blin10

none said:


> So a screaming buy then?


there are so many higher quality names to buy in energy sector, why risk it on cos


----------



## bmoney

none

There is a general consensus that current oil prices are unsustainable to maintain production of 90+ million bpd. Unless Elon Musk sells us millions of Teslas and Giga packs, prices will be higher. The over-supply condition is as much a function of market forces as politics. People are placing bets, is it 1-3 years out? Pick your horse.


----------



## bmoney

blin10

I've been wrong thus far, but COS could double or triple and spin out massive dividends in a higher price environment. Higher quality like IMO or SU, you might make 20%.


----------



## blin10

bmoney said:


> blin10
> 
> I've been wrong thus far, but COS could double or triple and spin out massive dividends in a higher price environment. Higher quality like IMO or SU, you might make 20%.


true, but it can also disappear...


----------



## Canadian

Is anyone still buying?


----------



## Pluto

I agree with this:

http://www.cnbc.com/2015/08/04/oil-price-will-recover-over-the-longer-term-rubenstein.html

That oil will turn out to be one of the best investments. 

But I'm not sure COS is the way to go. CPG has enough volatility, and better safety.


----------



## blin10

Pluto said:


> I agree with this:
> 
> http://www.cnbc.com/2015/08/04/oil-price-will-recover-over-the-longer-term-rubenstein.html
> 
> That oil will turn out to be one of the best investments.
> 
> But I'm not sure COS is the way to go. CPG has enough volatility, and better safety.


i'm playing it with pipelines, a lot less risk


----------



## thepitchedlink

blin10 said:


> i'm playing it with pipelines, a lot less risk


Such as.........


----------



## fatcat

blin10 said:


> i'm playing it with pipelines, a lot less risk


i wouldn't underestimate political risk which is not insignificant

obama is signaling that he will cr#p all over keystone xl


----------



## HaroldCrump

KXL rejection is said to be almost a certainty now - it will be one of the last acts of this President as soon as congress leaves for the summer recess.
TransCanada is said to be toying with the idea of *filing a tax loss claim under NAFTA*.

The ZIRP led rally of utilities and pipelines seems long in the tooth now.
I am personally not too bullish on pipelines.

Although, one could allocate a % of portfolio to pipelines and utilities as a long-bond proxy, such as very large cap pipelines & utilities like TransCanada, Enbridge & Fortis that are extremely unlikely to go bankrupt, and quite unlikely (but not impossible) to cut dividends.


----------



## Getafix

Interesting that COS is on quite a few people's list! Mine is also COS, not too worried about it though as it has rebounded in the past. Surprisingly another one that was my favorite until now is PHM. Down double digits on both, the rest of the stocks are also down but single digits, which isn't as worrisome.


----------



## gardner

fatcat said:


> obama is signaling that he will cr#p all over keystone xl


I am certain that a decisive "no" would hurt TRP, but at an EPS of 21, dividend of 4% and payout ratio below 90% make me think that the business will remain sustainable on the basis of current capacity. What I would worry more about would be a potential drop in volumes transported leading to a drop in transportation revenue. No amount of "yes" would fix a fundamental drop in the transport volume.


----------



## AltaRed

TRP's business is not at risk. They can keep their pipelines full since that is the cheaper solution than crude by rail. The issue is lack of growth and all the pipelines still have growth built into their multiples. IOW, there could be flat or slightly decreasing share prices in the pipeline sector for a long time.


----------



## fatcat

i am more concerned about an ndp victory in october which i think would put a hurt on the pipelines temporarily at least as well as the likely keystone rejection

i have my enbridge but sold my trp ..

i would rather be a little lighter at the moment

though i get the argument that these are still probably good buys for stability and income


----------



## HaroldCrump

fatcat said:


> i am more concerned about an ndp victory in october which i think would put a hurt on the pipelines temporarily at least as well as the likely keystone rejection


An NDP-led federal govt. is a far bigger issue than just our TRP shares.
IMHO, of course :biggrin:


----------



## blin10

thepitchedlink said:


> Such as.........


ipl,ppl,trp,ala,enb... let oil companies go through the hassle of getting resource while pipelines do the transfer


----------



## fatcat

HaroldCrump said:


> An NDP-led federal govt. is a far bigger issue than just our TRP shares.
> IMHO, of course :biggrin:


well yes harold, that's another, much longer story :cower: 

though i confess i am fed up with the fat man from alberta and there are some things the i want an ndp government to do, i will be happy and sad no matter who wins


----------



## none

What a bloodbath.


----------



## peterk

Finally some good timing on this one (for now). Bought 200 shares 2 hours ago at 6.89 and am up 10% already


----------



## peterk

Can we all get back into the proper COS thread here and stop posting in that other pointless thread?



AltaRed said:


> There may be Rights of First Refusal in the Syncrude agreement... and if so, other participants could match the price for a proportionate share if they so chose to do so. Eiher way, it is a takeout if COS shareholders agree.


It seems like the market price this morning indicates such a potential? It's trading above 9, but the deal in dollar value has the COS shares at $8.87 and the SU 25% share swap at $8.64.

Usually with hostile takeovers the stock price shoots up to just below the takeover price, to account for the risk of the buyer backing out, doesn't it?


----------



## peterk

I just sold 800 shares at $9.10


----------



## Spudd

peterk said:


> I just sold 800 shares at $9.10


And I sold 704 shares at $9.10 with you.  I was thrilled this morning because it put me into the green on COS - I had originally bought in the $10's somewhere and then averaged down in the 7's. Sold for a 4% profit and happy about it!


----------



## Eder

I'm out at $9.15 ....its usually best to sell on the news with these things. I am well underwater on this thing but need some capital losses this year.


----------



## SkyFall

Anyone knows what will happen to call options? If the sell goes through?


----------



## Getafix

Out on 9.12 for a small loss.


----------



## peterk

SkyFall said:


> Anyone knows what will happen to call options? If the sell goes through?


Damn you bought calls? Drinks on SkyFall! Need HP in here to answer those questions probably.

Dumped another 200 @ $9.17


----------



## thepitchedlink

HHHhmmm. holding here right now...you guys all getting out and watch from the sidelines....


----------



## CPA Candidate

I'd take the money and run. SU gave all the COS stock holders a way out.


----------



## daddybigbucks

im going to wait to see what COS board says.
Personally I think the price is low and too opportunistic.

Id like to see Imperial throw in a bid as well.


----------



## jtc

I hold 624 shares I purchased around the 20 dollar mark. I know I'm underwater, but up until now, I didn't really care. I originally planned on holding these shares 15-20 years.

Is there anything relating to a hostile takeover that would force me to sell these shares? 

I guess I am really asking how hostile takeovers work and how it could/would affect someone in my position?


----------



## SkyFall

peterk said:


> Damn you bought calls? Drinks on SkyFall! Need HP in here to answer those questions probably.
> 
> Dumped another 200 @ $9.17


yeah... and even worst I bought LEAPs.... I know I know it was a terrible mistake  at least it was only a small portion. I guess experience come at some costs


----------



## Mechanic

Sold 1000 @ 9.20 but I see it's up again. I still have more and will watch. If it drops back will likely buy it back and try to get my avg down some more.


----------



## favelle75

Anyone seeing this as a buying opportunity for SU? Down nearly 2.5% today...


----------



## OnlyMyOpinion

jtc said:


> I hold 624 shares I purchased around the 20 dollar mark. I know I'm underwater, but up until now, I didn't really care. I originally planned on holding these shares 15-20 years. Is there anything relating to a hostile takeover that would force me to sell these shares? I guess I am really asking how hostile takeovers work and how it could/would affect someone in my position?


You raise a really good question. If you choose to accept the takeover rather than sell COS into the market as many have done today, and if the takeover is successful, you will end up with 1 share of SU for every 4 shares of COS that you own (so ~156 shares of SU). You should expect some correspondence to come through your brokerage in this regard. This takeover may go through as proposed, or it is possible that a competing offer will come from another company, or that SU will be forced/negotiated into increasing their offer - difficult to predict today.
You should be able to exchange your COS shares for SU shares without having to declare a capital gain/loss until you decide at some later date to sell your SU shares.

_Conditions for the application of subsection 85.1(1)
1.1 Subsection 85.1(1) applies where a taxpayer (vendor) who holds shares (exchanged shares) in a corporation (acquired corporation) exchanges them for shares in the capital stock of a purchasing corporation (purchaser).
1.2 In order for the conditions in subsection 85.1(1) to be satisfied:
the purchaser must be a Canadian corporation, as defined in subsection 89(1);
the vendor must hold the exchanged shares as capital property;
the exchanged shares must be shares of the capital stock of a taxable Canadian corporation, as defined in subsection 89(1); and
the consideration received by the vendor on the exchange must be newly issued shares of one class from the treasury of the purchaser and cannot consist of stock options, income bonds, debentures or any other non-share consideration.

Tax consequences to the vendor
1.8 Unless the vendor chooses to include any portion of the gain or loss in income for the tax year in which the exchange occurred, the rollover provisions of subsection 85.1(1) apply automatically to the exchange and no election is required to be filed.
1.9 The vendor is deemed to dispose of the exchanged shares at their adjusted cost base and to have acquired the shares of the purchaser at a cost equal to the adjusted cost base of the exchanged shares immediately before the exchange.

_


----------



## FrugalTrader

I'm also of the opinion that is an opportunistic takeover and predicting that COS board will do everything in their power to fight the take over. The offer is too low for the long term value of this company/asset.


----------



## Mechanic

I dont see 4:1 as being a good deal for COS shareholders. I think COS has more value and will be buying back if an opportunity presents.


----------



## HaroldCrump

BNN is reporting that unofficial sources within COS are saying they will reject the offer.


----------



## My Own Advisor

favelle75 said:


> Anyone seeing this as a buying opportunity for SU? Down nearly 2.5% today...


Yup


----------



## OnlyMyOpinion

As a hostile takeover, its pretty well a given that the board will come out advising that the offer is too low and recommending against shareholders tendering. But COS is in play now, hard to take them off the court and quite likely just a question of who pays how much for them.


----------



## Mechanic

Just sold another 1000 @ 9.60 with a minute left. Wonder if I'll be kicking myself tomorrow ? Still got some more


----------



## Doryman

Hmmm.... I bought COS at 18 and held (like an idiot). Now I have to choose between taking a 50% ish lost or... what? ending up with shares in Suncor, equal to 1/4 of my total shares in COS? Is that right? 

Not really sure what's better here. What would be the downsides to waiting out and watching how this takeover goes?


----------



## bmoney

As someone said earlier, management will play off the offer as too low and ask for better deal.

Personally, I previously hedged 2/3 of my position with $11 Jan calls (ACB of $10.68) my remaining 2000 shares I'm going to sit on, wait and see how it plays out.


----------



## doctrine

I would suggest that if you are uncomfortable with oil or have any regrets on a COS purchase, that you take this opportunity to get out. COS is now trading at a premium to the SU offer. Of course they are going to reject it. But it might just be a question of price... however, I doubt SU is going to offer more than perhaps $10 or $10.50 for the company. 

But if the price goes too high, and SU balks at $11/share, then hello $6 share price - COS is still losing money and sitting with $2.3B in debt. Look at the forward price curve of oil. Even if you locked in oil prices to 2023, you can't get more than $58 US. Even $58 US will NOT return COS to $20/share. 

Evaluate risk/reward carefully here, I don't see much upside past $11 and the downside is a return to $6.


----------



## gardner

I am tempted to dump my COS and buy more SU.


----------



## thepitchedlink

I got out....sold 1800 COS, for a bit of a loss... But I think the risk of it going back to 6$ is real....but what do I know:biggrin:


----------



## humble_pie

doctrine said:


> I would suggest that if you are uncomfortable with oil or have any regrets on a COS purchase, that you take this opportunity to get out. COS is now trading at a premium to the SU offer. Of course they are going to reject it. But it might just be a question of price... however, I doubt SU is going to offer more than perhaps $10 or $10.50 for the company.
> 
> Evaluate risk/reward carefully here, I don't see much upside past $11 and the downside is a return to $6.



wondering why you don't think a white knight offer from a 3rd party might materialize? this could lead to a bidding war.

i've never owned COS or SU so i'm out of normal range here. But it seems odd to me that there'd be no other interest in owning COS, other than suncor's.


----------



## dubmac

humble_pie said:


> wondering why you don't think a white knight offer from a 3rd party might materialize? this could lead to a bidding war.
> 
> i've never owned COS or SU so i'm out of normal range here. But it seems odd to me that there'd be no other interest in owning COS, other than suncor's.


HP- I have heard/read that another suitor to COS may be Imperial Oil.


----------



## My Own Advisor

I think the battles for low and small-cap oil is just starting....


----------



## humble_pie

lol when teck & ontario teachers were fighting over fording coal a decade ago, the regulations at that time required that printed hard copies of every offer & counter-offer be mailed to shareholders.

the bidding war went on for months. The 2 parties counter-offered each other & then they countered & countered & countered & countered. Even fording had something to say for itself, every now & then, in writing.

i had nowhere to file the yards of printed bumphf so i put each humungous new document on a separate step of the interior house staircase. Just when it looked like we couldn't walk upstairs or downstairs any more, finally they settled on a deal. It was beyond crazy. As best i can recall - having balled each other for months - all of a sudden teck & teachers got together lovey-dovey & said Hey we're going to do this deal as Partners.

so i find myself thinking, do the venerable oil sands - hated though they may be by some factions in canada - does COS deserve anything less than the Full Staircase?


----------



## Fraser19

favelle75 said:


> Anyone seeing this as a buying opportunity for SU? Down nearly 2.5% today...


A classic Hedge Fund move is to long the target company and short the acquiring company. Today is a clear example of why that works. Although I suppose you have to move very fast.


----------



## OnlyMyOpinion

My Own Advisor said:


> I think the battles for low and small-cap oil is just starting....


Yes, it was an interesting list of top gainers on the TSE today:
Canadian Oil Sands (COS) +55.1%
Penn West (PWT) +22.3%
MEG Energy (MEG) +21.8%
Paramount (POU) +16.5%
Pengrowth (PGF) +14.8%
Boavista (BNP) +14.6%
Athabasca Oil (ATH) +14.5%
Bonterra (BNE) +14.4%
Torc (TOG) +11.2%

M&A hope springs eternal.


----------



## My Own Advisor

It's a low-ball offer for sure. For those that want to bail I could see them accepting. I'm looking for senior management to say a big fat no thanks.

http://www.cdnoilsands.com/Media-Ce...ds-Responds-to-Unsolicited-Offer/default.aspx


----------



## doctrine

humble_pie said:


> wondering why you don't think a white knight offer from a 3rd party might materialize? this could lead to a bidding war.
> 
> i've never owned COS or SU so i'm out of normal range here. But it seems odd to me that there'd be no other interest in owning COS, other than suncor's.


COS is a high cost producer. COS is a takeout at $10, but anyone who thinks they're going to get $12-13 is probably dreaming - at current depressed prices, you can pick up other producers for cheaper even after today's rally. Again, oil 8-10 years on the futures market is out is still less than $60 US. For IMO to buy, remember than Exxon-Mobil, as majority owner, will have to approve, and they might not be interesting in dropping $billions when they're already spending that on Kearl. And you can't buy out all of Syncrude - even the Chinese own a piece of it, so you still have to play nice with your partners.


----------



## AltaRed

I don't think the presence/expense of Kearl is any kind of showstopper for IMO/XOM. It may more a case of stacking up an increased interest in Syncrude against other acquisition opportunities elsewhere in the world, and deciding on how much oil sands mining exposure they really want.


----------



## protomok

My avg COS purchase price is ~$21...I'm down about 55% and incl dividends down 39%. I'm going to hold on and see if we get a better offer. Hopefully this isn't a huge mistake lol.


----------



## peterk

Ditched another 200 shares this morning @ 9.64. Guess I jumped out too early yesterday @ 9.10


----------



## daddybigbucks

protomok said:


> My avg COS purchase price is ~$21...I'm down about 55% and incl dividends down 39%. I'm going to hold on and see if we get a better offer. Hopefully this isn't a huge mistake lol.


My purchase price was 9.60 back in march. 
I can get out and be even but I think its a high quality asset. I do think when oil returns to $60 a barrel, COS will be at least $10 even on its own. Im just going to hold and watch the show.


----------



## plasmasnake

My ACB is $17.30, but I only hold 280 shares. I think I'm just going to sit back and watch how this unfolds.


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## bmoney

COS management taking a strong defensive position with their new rights offering. Basically it's a poison pill that would allow shareholders to acquire new stock at a steep discount effectively diluting the >20% purchaser making a hostile bid that much more difficult.


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## Hiitsme

Hi bmoney; Exciting times. Would you know offhand if it's common to declare a Rights Plan like this after a takeover bid? Is there precedent for rejection by the Courts even if Shareholders were to approve it?


----------



## bmoney

Hiitsme said:


> Hi bmoney; Exciting times. Would you know offhand if it's common to declare a Rights Plan like this after a takeover bid? Is there precedent for rejection by the Courts even if Shareholders were to approve it?


There is a shareholder oppression remedy through the court where the actions of management are destructive to shareholder value (dilution). I don't think it would be practical for Suncor to take such action against COS, they would just stay away. With a tender offer Suncor gets to wet our appetite and pressure management into seriously considering a deal, that's the main goal since COS rebuffed them earlier - which was not public knowledge aside from rumour. Since the tender does not close until Dec all sides have time to negotiate. 

I have a hunch a deal gets done but somewhere closer to $10


----------



## HaroldCrump

It seems the previous offer made by SU was back in March/April and it was around $11.


----------



## Pluto

daddybigbucks said:


> I do think when oil returns to $60 a barrel, COS will be at least $10 even on its own. Im just going to hold and watch the show.


I don't think you will have to wait long. It looks like oil could be between 70-85 by Jan 1st 2016. 
US production is slipping, while world demand is inching up.


----------



## My Own Advisor

Oil will not stay low forever.


----------



## gearhead

Crude oil still up on the day, but here's the latest EIA Storage Report, which shows an uptick.

http://247wallst.com/energy-economy/2015/10/07/crude-oil-price-dives-after-eia-storage-report/


----------



## bmoney

gearhead said:


> Crude oil still up on the day, but here's the latest EIA Storage Report, which shows an uptick.
> 
> http://247wallst.com/energy-economy/2015/10/07/crude-oil-price-dives-after-eia-storage-report/


Today's EIA report was bearish but taken as a whole it's not indicative of a trend. The current trend is a slow draw-down of inventory, and a decrease of about 400k barrels of US production from the peak. We are also starting to see the major's having to pull back sustaining capital meaning production will fall elsewhere. The price can't stay low for much too long provided the global economy stays on the rails, the biggest risk to oil is the global economy going off the rails.

I'm rooting for SU take over, I'll take a little less upside for a little less risk and I'll be almost whole. Been riding this sucker down from $21 and spent way to much time managing my position.


----------



## bmoney

Syncrude closed today at $62.87 well off the $45 and change it hit prior to the outage - which was probably a net positive since it closed the discount gap between SCO and WTI


----------



## peterk

> Some analysts said the new 120-day bid expiry requirement could open a window for a rival bid, but noted the emergence of another suitor — Imperial Oil Ltd. is most often mentioned — is unlikely.
> 
> “We view the likelihood of a rival bid as low and we do not expect Imperial Oil to make a competing offer for COS, as we believe that Suncor has the synergy incentives to outbid Imperial Oil, and we believe that Imperial likely understand this,” FirstEnergy Capital Corp. analyst Michael Dunn said in a research note.


http://business.financialpost.com/news/energy/canadian-oil-sands-ltd-sets-rights-plan-in-face-of-suncors-hostile-bid

Can someone explain what this "synergy" is that Suncor has that everyone is talking about that makes their takeover so much more appealing compared to other potential bidders?

Syncrude is operated by IOL/Exxon, uses Exxon management, processes, procedures, and computer systems. That seems pretty synergistic to me... What gives?


----------



## Hiitsme

bmoney said:


> There is a shareholder oppression remedy through the court where the actions of management are destructive to shareholder value (dilution). I don't think it would be practical for Suncor to take such action against COS, they would just stay away. With a tender offer Suncor gets to wet our appetite and pressure management into seriously considering a deal, that's the main goal since COS rebuffed them earlier - which was not public knowledge aside from rumour. Since the tender does not close until Dec all sides have time to negotiate.
> 
> I have a hunch a dea gets done but somewhere closer to $10


Thanks! Would you still hold to your $10 hunch if oil were to shoot up 20-25% by year end or early next year? This bid is obviously in an opportunistic window.


----------



## AltaRed

peterk said:


> http://business.financialpost.com/news/energy/canadian-oil-sands-ltd-sets-rights-plan-in-face-of-suncors-hostile-bid
> 
> Can someone explain what this "synergy" is that Suncor has that everyone is talking about that makes their takeover so much more appealing compared to other potential bidders?
> 
> Syncrude is operated by IOL/Exxon, uses Exxon management, processes, procedures, and computer systems. That seems pretty synergistic to me... What gives?


There is no more synergy in Suncor operating Syncrude than IOL operating Syncrude. The FP piece is a case of armchair quarterbacks commenting on things they do not know very well. Both companies should be able to squeeze some savings out of the operation by combining some Syncrude business processes into their own local operations, but not much else.... and that is assuming Suncor becomes the 'operator' of Syncrude in the event Suncor is successful in its bid.


----------



## peterk

Thanks Alta, I thought so.



AltaRed said:


> There is no more synergy in Suncor operating Syncrude than IOL operating Syncrude. The FP piece is a case of armchair quarterbacks commenting on things they do not know very well. Both companies should be able to squeeze some savings out of the operation by combining some Syncrude business processes into their own local operations, but not much else.... *and that is assuming Suncor becomes the 'operator' of Syncrude in the event Suncor is successful in its bid*.


Which Suncor has announced that they have no intention of doing (of course they could be lying).


----------



## bmoney

Hiitsme said:


> Thanks! Would you still hold to your $10 hunch if oil were to shoot up 20-25% by year end or early next year? This bid is obviously in an opportunistic window.


Where things end up in December is anyone's guess, so yes it could change the attractiveness of the deal. That is a risk for both sides and the timing is everything. SU offered around $11.48/share in April, how sweet does that deal look now? At current SCO price of $63 there's no imminent danger, not more than a month ago SCO was trading at a $5-$6 discount to WTI or $45. Rapid swings have been the reality the last few months, this is not what I signed up for as an investor, this is gambling. It's evident that Suncor's adjusted offer reflects greater medium term uncertainty. Where Suncor has the advantage is balance sheet strength, and fatigued investors like me that see a viable exit strategy are apt to take a deal and participate on less upside and less downside. The tune changes fast when you're down 45% and 40k in a few months, and you start dreamining about getting your initial investment back. I pulled every trick in the book to lower my ACB from options to trading to DCA, the only one that made money was my broker.


----------



## bmoney

I didn't read the FP article but there can be synergies. Suncor owns/operates the first and oldest open pit oil sands mine in Canada, it's conceivable they could operate Syncrude. COS investor presentation used to contain a chart with a breakdown of their cash costs and I believe $5 per barrel went to management and marketing expenses, there could be some juice to squeeze out of this lemon if they canned COS managed and took it one step further to run Syncrude, the Imperial oil managment contract is coming up for review soon. Also, they could transition supply/production from higher cost projects with 150k barrels that would come from their share of syncrude, that's another synergy. Potash is doing this with their lower cost mines in NS.


----------



## doctrine

peterk said:


> http://business.financialpost.com/news/energy/canadian-oil-sands-ltd-sets-rights-plan-in-face-of-suncors-hostile-bid
> 
> Can someone explain what this "synergy" is that Suncor has that everyone is talking about that makes their takeover so much more appealing compared to other potential bidders?
> 
> Syncrude is operated by IOL/Exxon, uses Exxon management, processes, procedures, and computer systems. That seems pretty synergistic to me... What gives?


Suncor has major oilsands operations right next to Syncrude. While IMO operates it, they don't have major operations _*literally across the street*_, which is why there are more potential synergies for SU.


----------



## AltaRed

doctrine said:


> Suncor has major oilsands operations right next to Syncrude. While IMO operates it, they don't have major operations _*literally across the street*_, which is why there are more potential synergies for SU.


Pray tell how that would work. There is no way of combining operations in the field. Those stand alone with possible minor exceptions. It is the G&A functions that might have some synergies and that does not matter when it is Suncor next door or Imperial at Kearl. I suspect IOL already combines some of the G&A functions between Syncrude and Kearl. JVs have to be very careful intermingling operations with vastly different ownership. That said, I think Suncor could find more synergies than Imperial just because of the size of their presence in the area and long term experience. 

The potential savings have to be marginal though, perhaps $1/B. Example: the daily mine plan works off software programs and staff that continuously monitor what the shovels are putting in the trucks. They tweak and adjust specifically what each shovel does daily. There has to be mine plan staff for each operation.to do that. The only savings might be in one supervisor/manager for both.


----------



## OptsyEagle

The main synergy here is that over the last year or so, Canadian Oil Sands stock went down a lot, while at the same time, Suncor's stock only went down a little. 

Did you notice the complete lack of cash involved in this deal. That's about all the synergy we are talking about here.


----------



## peterk

doctrine said:


> Suncor has major oilsands operations right next to Syncrude. While IMO operates it, they don't have major operations _*literally across the street*_, which is why there are more potential synergies for SU.


That's what I though they were talking about, but it makes not much sense. The mines are still quite separated. The Syncrude mining pits are far to the west and the Suncor mine pits are far to the east, across the river in fact. The plantsites are not next to each other either and are separated by a highway, tailings ponds, and a very large elevation difference. It's certainly possible if Suncor intends to fully take over the Syncrude site that some "sharing" of minor systems and a small amount of personnel could take place, but I think it would be minimal. The big things, mine and processing plant, are quite separate. And Suncor has already said the have no intention of taking over operations with this acquisition and displacing the current management agreement with IOL/XOM.


----------



## peterk

Trying to figure my way through the logic of this COS situation:

Suncor offer as it stands has kept the stock around the $9-10 range.

If oil spikes up higher than $55 then COS will naturally rise to above $10, trading normally again, and the Suncor deal is at risk of falling through.

If oil stays steady, COS won't be very volatile, held in place by the Suncor offer, some negotiation may take place here or there while a final takeover price is determined (possibly higher?)

If oil tanks again, COS has a floor of $8.8x with the Suncor offer propping it up. I would imagine that oil crashing again makes the Suncor deal MORE likely to take place since investors would be more interested in taking the deal as it's offered. If oil got really bad Suncor could get even more aggressive and adjust their offer down by a little bit.

The only bad situation I can see is if oil drops again, but for some reason Suncor wants to pull out. I don't think that would happen, particularly if oil drops.

I've sold about 2/3 of my COS shares over the last few weeks at $9+, but I'm starting to wonder if I jumped the gun a bit. This could be a position to be invested in right now as if oil rise you'll have the full benefit of COS shooting up, but if it falls you have the Suncor offer propping it up. Thoughts?


----------



## Mechanic

peterk said:


> Trying to figure my way through the logic of this COS situation:
> 
> Suncor offer as it stands has kept the stock around the $9-10 range.
> 
> If oil spikes up higher than $55 then COS will naturally rise to above $10, trading normally again, and the Suncor deal is at risk of falling through.
> 
> If oil stays steady, COS won't be very volatile, held in place by the Suncor offer, some negotiation may take place here or there while a final takeover price is determined (possibly higher?)
> 
> If oil tanks again, COS has a floor of $8.8x with the Suncor offer propping it up. I would imagine that oil crashing again makes the Suncor deal MORE likely to take place since investors would be more interested in taking the deal as it's offered. If oil got really bad Suncor could get even more aggressive and adjust their offer down by a little bit.
> 
> The only bad situation I can see is if oil drops again, but for some reason Suncor wants to pull out. I don't think that would happen, particularly if oil drops.
> 
> I've sold about 2/3 of my COS shares over the last few weeks at $9+, but I'm starting to wonder if I jumped the gun a bit. This could be a position to be invested in right now as if oil rise you'll have the full benefit of COS shooting up, but if it falls you have the Suncor offer propping it up. Thoughts?


Have exactly the same thoughts myself. I even did the same thing and sold off about 1/3 of my position, then the same again and am now left holding the final 1/3. My thoughts originally were to buy back what I sold off, as I thought the price would drop back down and the deal would fall through. That would have allowed me to average my buy price down. I still view this as a hold and expect oil prices to recover over time.


----------



## Nerd Investor

peterk said:


> Trying to figure my way through the logic of this COS situation:
> 
> Suncor offer as it stands has kept the stock around the $9-10 range.
> 
> If oil spikes up higher than $55 then COS will naturally rise to above $10, trading normally again, and the Suncor deal is at risk of falling through.
> 
> If oil stays steady, COS won't be very volatile, held in place by the Suncor offer, some negotiation may take place here or there while a final takeover price is determined (possibly higher?)
> 
> If oil tanks again, COS has a floor of $8.8x with the Suncor offer propping it up. I would imagine that oil crashing again makes the Suncor deal MORE likely to take place since investors would be more interested in taking the deal as it's offered. If oil got really bad Suncor could get even more aggressive and adjust their offer down by a little bit.
> 
> The only bad situation I can see is if oil drops again, but for some reason Suncor wants to pull out. I don't think that would happen, particularly if oil drops.
> 
> I've sold about 2/3 of my COS shares over the last few weeks at $9+, but I'm starting to wonder if I jumped the gun a bit. This could be a position to be invested in right now as if oil rise you'll have the full benefit of COS shooting up, but if it falls you have the Suncor offer propping it up. Thoughts?


I'm generally of the same mind set. The offer does offer a bit of downside protection, but then again it's entirely possible the offer is pulled in which case all bets are off. I saw it happen with my holdings in PRE (there was an offer for $6 or $6.50) but it got rejected by shareholders and the stock has since plummeted. I'm currently sitting pat on my COS, I wrote $11 Jan 2016 calls a while back; if it ends up triggered I'll be satisfied getting out at that price.


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## AltaRed

It is messy with Suncor to challenge the COS shareholder rights plan. http://www.theglobeandmail.com/repo...poison-pill-takeover-defence/article27059626/


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## peterk

In case anyone is still optimistic about an Imperial or other counter bid, it looks like the market has been getting less hopeful of that over the past 10 days. COS is now trading at only a few pennies premium to the SU 1/4 share offer.

Check out this chart since the takeover offer, showing the close correlation, and the divergence beginning last week.


----------



## Flash

Can someone please explain what happens to ones shares when the company is bought out by another?

I know most of the times the shares will spike, to a degree. But what happens if I don't want to sell at that price? Can I keep my shares? Will they get converted into SU shares? If oil goes up, can my shares continue to increase in value if it was bought?

Took a big hit on this since I bought at a high peak, and just plan to keep them for as long as possible until one day oil will be climbing up again, but will it be possible to do that if they get bought out by SU?


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## bmoney

I'm still holding 2/3 of my COS position for about 6k shares, all of which are hedge with Jan '16 calls between $10-$11.

IMO the SU deal is not going through as is, they don't have enough shareholders on side. If SU did, well the major shareholders would not let the price slide to represent a discount at 4:1 conversion that would be leaving free money on the table. COS is still in play but management is playing a dicey game of hope. Hoping for a white knight, higher prices or a better counter offer. I could be wrong but I don't see SU coming back to the table. Time is on there side as much as it is on COS. If oil does not recover in 2016, COS could be in a world of hurt, and SU always has the option to pick up the pieces (at a better price); return the money to shareholders through a buyback, or invest in something else.


----------



## AltaRed

Per Suncor's website:


> The Offer will be open for acceptance until 5:00 p.m. (Calgary time) on December 4, 2015, unless extended or withdrawn. Suncor has structured the Offer to meet the requirements of a "Permitted Bid" under COS' existing shareholder rights plan.
> 
> The Offer is subject to certain customary conditions including, among other items, that more than 66 2/3% of the outstanding COS shares (calculated on a fully-diluted basis) shall have been validly tendered under the Offer and not withdrawn and certain regulatory approvals (as outlined in the offer to purchase and take-over bid circular and related offer documents (the "Offer Documents") that will be filed on SEDAR and with the SEC, as defined herein, later today and throughout the currency of the Offer) shall have been obtained. Subject to applicable law, Suncor reserves the right to withdraw or extend the Offer and to not take up and pay for any COS shares deposited under the Offer unless each of the conditions of the Offer is satisfied or waived by Suncor at the expiry time of the Offer. COS shareholders are strongly encouraged to read the Offer Documents carefully and in their entirety since they contain additional important information regarding Suncor and the terms and conditions of the Offer.
> 
> Copies of the Offer Documents referred to above may also be obtained free of charge upon request made to the corporate secretary of Suncor at P.O. Box 2844, 150 - 6 Avenue S.W., Calgary, Alberta Canada T2P 3E3.]


All of that is subject to the decision of the ASC on Monday with respect to whether the poison pill adopted by the COS Board is upheld or not. If it is upheld, I think Suncor will then withdraw it's offer, In any case, Suncor's offer will expire on Friday and COS shares will likely slump back to the $4-5 range if the deal does not happen. COS' advisors claim to have some serious contenders looking in the data room but I think this is mostly smoke and mirrors.... many dollars and weeks late doing it.

Added: To answer Flash, if the deal goes through, your shares will be automatically converted to Suncor shares. That is the way it goes. Your best bet for recovery will be to ride Suncor shares back up, albeit you may never get the multiples you need to cover your loss.


----------



## mgr1397

I will see the outcome of tomorrow, if it doesn't look good i'll be exiting my position of COS and taking my loss.


----------



## Nerd Investor

I'm think I'm going to pull the trigger and accept the tender offer. There's a premium (albeit small) to do it right now considering where both stocks are trading, I'm getting a better dividend and payout and less volatility/downside risk without completely losing the upside of oil in general.


----------



## AltaRed

For those of you contemplating deciding whether to pull the plug pre-ASC decision, I assume you all have read both the Suncor and COS submissions to the ASC. I have no skin in this game but I did skim (skip a rock across) the COS submission http://s1.q4cdn.com/643672711/files...Submissions-of-Canadian-Oil-Sands-Limited.pdf to see the nature of the bun fight. While COS claims to have a lot of shareholder support against the offer, paragraph 128 can claim only 12.4% written shareholder support (unknown informal support).

My guess is ASC, which often appears spineless, will side with COS on this one, if for no other reason than to be seen NOT to exclude the possibility of competing offers. That said, where have the competing offers been the last 45 days? Are they waiting for the SU offer to expire and make their own offer at almost exactly SU's offer before year end? I love these games! It makes for interesting days.


----------



## protomok

I want to believe COS is going to find other bidders but I'm quite skeptical. I think other serious bidders would either:
A - Already have publicly announced an offer
or
B - Wait to see if the Suncor offer falls apart then let COS tank for a while before making a bid.


----------



## Nerd Investor

protomok said:


> I want to believe COS is going to find other bidders but I'm quite skeptical. I think other serious bidders would either:
> A - Already have publicly announced an offer
> or
> B - Wait to see if the Suncor offer falls apart then let COS tank for a while before making a bid.


Agreed, I'm taking the bird in the hand on this one. 
Just got confirmation my institution received and submitted by tender instructions.


----------



## protomok

I'm pretty much just waiting to see what happens...my position is so small it definitely will not impact this vote 

I think it's also important to note that even if we tender our shares Suncor fully plans to walk away unless >= 66 2/3% of shares are tendered [http://www.suncorofferforcanadianoilsands.com/qa.php].


----------



## Numbersman61

http://www.theglobeandmail.com/repo...lar-upholds-coss-poison-pill/article27535129/

Poison pill approved to Jan 4
Suncor previously advised that they would not extend bid past Dec 4


----------



## mgr1397

Will the shares be automatically tendered or do I have to call into TDWH?


----------



## bmoney

mgr1397 said:


> Will the shares be automatically tendered or do I have to call into TDWH?


It's a kin to voting. You go along with the ride whether you tender your shares or not. If you would like to officially pledge support for the tender offer you will need to call TD and place your vote. Nothing happens until election day so to speak, the tender is either accepted or withdrawn.


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## bmoney

If there is anything hopeful SCO is trading at $56CDN, that is around the cash cost and COS management appears pretty confident they can float the boat until 2019. Tomorrow they announce their budget so it will be interesting to see if they made any headway in cutting costs, and the current financial position.

My opinion on WTI currently is that OPEC does not cut output at the December meeting; they would like nothing more than for Iran to sell their reserves at the bottom of the barrel. Sanctions have not yet been lifted, if/when Iran starts to sell to the open market, it will need to be digested first. I think the earliest we can see a recovery is in H2 2016 barring any unforeseen event like war or terrorism.


----------



## Hiitsme

Come on down Sinopec.


----------



## AltaRed

2016 guidance was released this morning (lower capex and lower opex going forward) which is good news, but the insiders (Syncrude owners including Suncor) would have already known that based on the date generated by Syncrude and/or Imperial Oil staff assigned to Syncrude. we have heard these promises before. Ryan Kubik was all over the media promoting how robust their number are and that they will have free cash flow. One problem. I believe his cash flow numbers assume $50 oil.

For a different perspective, folks should listen to Bill Harris' views on BNN's Market Call today regarding COS. He is one of the money managers I listen to more closely on resource stocks. You'd wonder if those guys were talking about the same company.


----------



## Hiitsme

Quote from Robert Cooper at Acumen:
_There is “no incentive to sweeten” the deal in the absence of a rival offer, and Suncor could yet scrap its approach entirely, said Robert Cooper at Acumen Capital Partners in Calgary, who declined to say whether he held shares in either firm, citing corporate policy. Canadian Oil Sands is “playing Russian roulette with shareholders by trusting that they don’t walk away,” he said. “This is a $5 stock if there’s no bid on the table.”_

Question: Are all these analysts at these Investment firms idiots or just this guy?
COS is a sub $10 stock at oil prices today. It's a $20 stock at $80 oil. It'll likely be somewhere between those 2 number by this time next year.
Maybe I should email this a guy a chart correlating WTI price to COS share price and educate him?


----------



## treva84

Hiitsme said:


> Quote from Robert Cooper at Acumen:
> _There is “no incentive to sweeten” the deal in the absence of a rival offer, and Suncor could yet scrap its approach entirely, said Robert Cooper at Acumen Capital Partners in Calgary, who declined to say whether he held shares in either firm, citing corporate policy. Canadian Oil Sands is “playing Russian roulette with shareholders by trusting that they don’t walk away,” he said. “This is a $5 stock if there’s no bid on the table.”_
> 
> Question: Are all these analysts at these Investment firms idiots or just this guy?
> COS is a sub $10 stock at oil prices today. It's a $20 stock at $80 oil. It'll likely be somewhere between those 2 number by this time next year.
> Maybe I should email this a guy a chart correlating WTI price to COS share price and educate him?


SU is smart, they are making a good value play and they know they have the upper hand. They are trying to buy COS for less than it's worth yes, but I don't think COS should expect fair market value for their assets.


----------



## Hiitsme

treva84 said:


> SU is smart, they are making a good value play and they know they have the upper hand. They are trying to buy COS for less than it's worth yes, but *I don't think COS should expect fair market value for their assets.*


Why not? If they have the cash to ride out low oil prices for a while, what's the need for any fire sale?


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## AltaRed

I don't think it is a case of a fire sale. The SU bid (equity plus COS debt) is pretty substantial. I think the bigger issue is COS has a more optimistic view of the future (oil price, value of their undeveloped lease, operating factor, opex/capex cost savings) than do potential acquirers (at least SU as an insider). It's been ages since Syncrude has hit their numbers. Perspectives of NPV are in the eyes of the beholder.

Without having the benefit of what SU knows about the operation and their evaluation assumptions, I beleve the most likely tactic would be for SU to simply extend their bid to Jan 4th. It allows them to save face by mirroring the ASC decision and keeps them in the game. OTOH, if SU's view of market conditions have deteriorated since SU made their Oct 5th offer, it would also allow them to withdraw gracefully on Friday.


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## Nerd Investor

As expected, Suncor extended their bid. I guess we wait another month to see how it all shakes out.


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## Hiitsme

I don't agree at all that Suncor 'saved face' by extending their bid in the face of the ASC ruling, having previously said they would not extend the bid. It amounts to deception and promoting of fear among shareholders and it should make them look like the opportunists they are. But none of it can be taken as surprising I guess, ethics of major corporations are what they are.

They are trying to grab an asset at fire sale prices while oil is low and if they scare enough shareholders they'll succeed. It'll be interesting (I bet predictable) to see them backtrack again and make a higher bid if another buyer jumps in marginally above their offer. Either way I'm up substantially if COS changes hands, but more prepared to sit tight for a year under current ownership. COS has a ton more upside than SU when oil climbs again and that is my preference.


----------



## atrp2biz

Hiitsme said:


> Quote from Robert Cooper at Acumen:
> _There is “no incentive to sweeten” the deal in the absence of a rival offer, and Suncor could yet scrap its approach entirely, said Robert Cooper at Acumen Capital Partners in Calgary, who declined to say whether he held shares in either firm, citing corporate policy. Canadian Oil Sands is “playing Russian roulette with shareholders by trusting that they don’t walk away,” he said. “This is a $5 stock if there’s no bid on the table.”_
> 
> Question: Are all these analysts at these Investment firms idiots or just this guy?
> COS is a sub $10 stock at oil prices today. *It's a $20 stock at $80 oil*. It'll likely be somewhere between those 2 number by this time next year.
> Maybe I should email this a guy a chart correlating WTI price to COS share price and educate him?


But oil is currently $40. There are easier ways for SU to be long oil. COS is a pure cash flow play and would be back down to $5-6 without the offer on the table.


----------



## Hiitsme

atrp2biz said:


> But oil is currently $40. There are easier ways for SU to be long oil. COS is a pure cash flow play and would be back down to $5-6 without the offer on the table.


Currently $40 but OPEC can't keep pumping indefinitely. $60 oil at some point next year puts COS back in the $12 range, double the expected $5-$6 that everyone is convinced will be the settle price. What are any easier ways for SU to capture that upside than by grabbing existing pure production?

edit: a viewpoint 
http://www.burgundyasset.com/data/newsletter/2015-12-Not_the_Time_to_Sell.pdf

Are we investing or chasing?


----------



## AltaRed

As discussed, COS is an oil price play and whether you like SU's offer or not should be based on one's view of oil prices. I am not a believer in a crude oil supply/demand balance in 2016 so unless Saudi blinks, be prepared to wait until 2017 for prices to recover much. All one has to do is read the IEA monthly market reports to get a sobering view of the crude world. OPEC production is up, Russia production is up, Canadian production is up and there is 3 billion barrels of crude sitting in tanks and tankers.


----------



## Hiitsme

I bought COS when we started to hear about the uptick in tanker storage . I can't afford to lease a tanker for 2 years, but if those who can are doing it, it's a good indicator.


----------



## treva84

Hiitsme said:


> Currently $40 but OPEC can't keep pumping indefinitely. $60 oil at some point next year puts COS back in the $12 range, double the expected $5-$6 that everyone is convinced will be the settle price. What are any easier ways for SU to capture that upside than by grabbing existing pure production?
> 
> edit: a viewpoint
> http://www.burgundyasset.com/data/newsletter/2015-12-Not_the_Time_to_Sell.pdf
> 
> Are we investing or chasing?


Based on the OPEC meeting yesterday I'm not so sure we'll be back at $60 next year....


----------



## Hiitsme

treva84 said:


> Based on the OPEC meeting yesterday I'm not so sure we'll be back at $60 next year....


Who really knows? Things can change overnight with oil based on geopolitical factors, the Chinese economy etc. I just don't get why I should sell at Suncor's bid price, unless I was in the camp trying to cut losses. The asset is in the ground and with the facilities. A group of trained monkeys could be managing it and it wouldn't make a difference, the assets will still be there. It boils to whether you want to play the waiting game or not. I'm not sure Suncor would be looking at a bigger stake in Syncrude if they thought oil at sub-$50 was the new reality.


----------



## AltaRed

Then don't tender your shares. If >1/3rd of COS stock feels the same way, the deal won't happen.


----------



## My Own Advisor

Hiitsme said:


> I just don't get why I should sell at Suncor's bid price, unless I was in the camp trying to cut losses. The asset is in the ground and with the facilities. *A group of trained monkeys could be managing it and it wouldn't make a difference, the assets will still be there*.


Trained monkeys can predict the future just as well as we can.


----------



## treva84

Hiitsme said:


> Who really knows? Things can change overnight with oil based on geopolitical factors, the Chinese economy etc. I just don't get why I should sell at Suncor's bid price, unless I was in the camp trying to cut losses. The asset is in the ground and with the facilities. A group of trained monkeys could be managing it and it wouldn't make a difference, the assets will still be there. It boils to whether you want to play the waiting game or not. I'm not sure Suncor would be looking at a bigger stake in Syncrude if they thought oil at sub-$50 was the new reality.


I think sub $50 oil is the new reality for the short term - med term. I suspect they are betting that eventually we will be $60+ and profitability will return to the Alberta oil sands, but I don't think that will be in 2016; maybe not even in 2017. SU has lots of cash so it makes sense to try and use the current economic climate to their advantage.

With that being said however I can totally understand how a COS share holder doesn't appreciate facing a possible loss of capital. Nonetheless, things may get worse before then get better. I should declare that I am SU shareholder, so obviously it is in my best interests if this deal goes through.


----------



## Hiitsme

treva84 said:


> I think sub $50 oil is the new reality for the short term - med term. I suspect they are betting that eventually we will be $60+ and profitability will return to the Alberta oil sands, but I don't think that will be in 2016; maybe not even in 2017. SU has lots of cash so it makes sense to try and use the current economic climate to their advantage.
> 
> With that being said however I can totally understand how a COS share holder doesn't appreciate facing a possible loss of capital. Nonetheless, things may get worse before then get better. *I should declare that I am SU shareholder*, so obviously it is in my best interests if this deal goes through.


It won't be the end of the world, but I hope I don't join you in any substantial way come January. :biggrin-new:


----------



## dime

Whats the tax implications of this? If the takeover happens because >66% of shareholders agree then is it considerd "sold" and causes a capital loss for tax purposes? Or will a direct exchange of shares not be considered a valid capital loss by the tax man? Thoughts?


----------



## Numbersman61

dime said:


> Whats the tax implications of this? If the takeover happens because >66% of shareholders agree then is it considerd "sold" and causes a capital loss for tax purposes? Or will a direct exchange of shares not be considered a valid capital loss by the tax man? Thoughts?


Canadian resident shareholders have the option to treat this as a sale and claim the capital loss. Somewhat complicated - see commentary on tax starting on page 62 of offer in following link
http://www.suncorofferforcanadianoilsands.com/docs/ENOfferandCircular.pdf


----------



## Nerd Investor

Well, the poison pill date has come and gone. Where are these superior offers from all the other interested parties COS was alluding to?


----------



## My Own Advisor

http://web.tmxmoney.com/article.php?newsid=81551360&qm_symbol=COS

Interesting perspective.


----------



## treva84

My Own Advisor said:


> http://web.tmxmoney.com/article.php?newsid=81551360&qm_symbol=COS
> 
> Interesting perspective.


Currently COS shareholders are screaming bloody murder with respect to the takeover bid - so why didn't they accept the previous, friendly offer at a higher value? With the price of oil decreasing, did they think SU would come back with a higher offer? That doesn't make any business sense. I agree that oil prices will rebound and hopefully that leads to COS providing shareholder value, but can you blame SU for being shrewd and attempting to capitalize on the current economic situation? Does this "46 year O&G" business professional really expect a takeover bid to be sunshine and lollipops when the price of Oil is hovering at $36.xx a barrel?


----------



## AltaRed

There was no previous offer to COS shareholders. The first offer was a friendly offer to COS management that was rebuffed. If the COS shareholder wants to scream, scream at COS management.

If I was SU management, I would let the offer expire if the threshold is not reached. I think the offer is too rich given oil prices may be in the tank for many, months to come. Thank goodness I am not a shareholder in either company.


----------



## daddybigbucks

AltaRed said:


> There was no previous offer to COS shareholders. The first offer was a friendly offer to COS management that was rebuffed. If the COS shareholder wants to scream, scream at COS management.


I agree. I just watched ceo of cos talking. It was 15 minutes of talking but saying nothing.
The reportor asked many times, "what is the fair value of COS then?" And he wouldnt answer. 
That shows me that he will be like a captain and go down with the ship.

Glad i got out a while ago.


----------



## doctrine

I've seen COS and COS shareholders throw out or imply big numbers for its value, like $15, $20 or even more per share. Ridiculous numbers that aren't going to happen at $36 oil. Oil has been down here for a little while now and now the forward curve is being hit. Oil in 2024 is selling for $56. I think 'lower for longer' might mean the end of the decade, not 2-3 years. I suspect that if SU gets close to 50% of the shares tendered, they'll extend the bid, otherwise watch out below, I think it's heading for $5 or less.


----------



## My Own Advisor

I'm in both companies for the long-haul. Let's see how oil plays out long-term. The need for oil is not going anywhere for my lifetime. Must it come from oil sands? I have no idea...


----------



## Nerd Investor

Only a few hours left before the timeline expires. Any predictions on whether enough shares were tendered for the takeover?
I'm also curious as to how soon after the deadline we'll know. Is this something that could be announced over the weekend I wonder?


----------



## jargey3000

...my sources tell me it won't fly....


----------



## AltaRed

The money likely should be bet on the premise that not enough shares get tendered. Part of that may be due to investor apathy, i.e. investors have to be proactive (to take the deal). Doing nothing is a vote for the status quo. Market sentiment tends to suggest that too with the methodical decline in COS share price over the past 2 weeks.


----------



## doctrine

Seems like sentiment is indicating there are definitely not enough tendered. I don't think that was unexpected..the real question is will Suncor extend the bid to attract more shareholders. I can't even imagine what the share price will be with oil at $33. Their 2016 budget is based on $50 WTI.


----------



## AltaRed

I'd walk if I was Suncor....unless they were fractionally within reach by a percentage point or so. 

Given the state of oil prices, there could be better acquisition opportunities out there, e.g. wait until BTE might collapse/have loans called by the banks, and pick up key assets.

Added: This puts it into perspective http://business.financialpost.com/n...an-oil-sands-ltd-shareholders?__lsa=51b9-d8f9


----------



## treva84

AltaRed said:


> I'd walk if I was Suncor....unless they were fractionally within reach by a percentage point or so.
> 
> Given the state of oil prices, there could be better acquisition opportunities out there, e.g. wait until BTE might collapse/have loans called by the banks, and pick up key assets.
> 
> Added: This puts it into perspective http://business.financialpost.com/n...an-oil-sands-ltd-shareholders?__lsa=51b9-d8f9


Looks like it's been extended to Jan 27 - http://www.cbc.ca/news/canada/calgary/suncor-extends-takeover-offer-canadian-oil-sands-1.3396789


----------



## AltaRed

They must have gotten somewhere between 50% and 66.7% in tendered shares and are seeing if they can cross the 2/3rd threshold needed to 'take out' the holdouts thereafter. It'd be a lot messier being, for example, a 68% owner of COS and having to replace most of the Board, but operate it at arm's length. Time will tell.


----------



## bmoney

Rumour in the G&M is that Suncor received 35%-40% tendered.

I will be tendering my shares on Monday Jan 18 once my options expire this Friday for several reasons:

1) I'm happy to take a 30% premium now 
2) Higher dividend 
3) Better balance sheet 
4) Most importantly, synergies that come with this type acquisition. Schulich laid out some compelling arguments why a deal makes sense, he's clearly on side to make deal but bargaining for a better offer:

_Suncor is hoping you don't realize they are willing to pay more. But the facts speak for themselves: In addition to our valuable upgrader and 1.6 billion barrels of reserves, Lease 29 presents an especially attractive opportunity for Suncor. Not only is it closely located to their existing operations but Suncor's North Steepbank mine is nearing the end of its life. That means they need to build a new mine much further away at a much greater cost, or acquire Lease 29 and extend the operations of their existing mining equipment and defer billions of dollars in capital spending. _

Furthermore, I don't believe COS managements points.

1) The operating budget is based on $50 WTI, right now I don't believe they have sufficient cash to cover expenses sub $50 WTI, and they could in breach of debt covenants before 2019. 
2) Where are the other bidders? Nothing has materialized
3) COS stock price has been well correlated to oil, providing COS shareholders more torque. I believe moving forward energy stocks will trade at discounts to prior periods. We have had 3 boom bust cycles in 10 years, and with a more serious approach to climate change, and breakdown of OPEC, this business is much too volatile. Therefore, when prices do recover, don't expect COS will be as correlated.
4) Major capital expenditures are largely over. Don't buy it either. COS continually misses production targets the billions spent is not producing the reliability expected.

Also, why was the previous SU bid not disclosed to shareholders?

SU can drive synergies by doubling up on facilities, reducing management overhead and possibly do a better job than XOM at running the sycrude project. I'm exhausted and tired of managing this position, ACB in the low $10s now time to move on.


----------



## protomok

bmoney said:


> 1) I'm happy to take a 30% premium now


Maybe I missed something but not sure where is the 30% premium? Or do you mean ~30% difference factoring in COS crashing if the deal doesn't go through?

At the moment COS.TO is at $7.47, SU.TO is at $33.25 and SU.TO/4 is $8.31. The % increase if a deal went through today is 11%. Obviously an 11% premium is better than nothing but it isn't compelling...not to mention the limited upside we're trading for such a small premium if/when oil prices rebound.



bmoney said:


> 1) The operating budget is based on $50 WTI, right now I don't believe they have sufficient cash to cover expenses sub $50 WTI, and they could in breach of debt covenants before 2019.


I think it really comes down to where each of us see oil going. Personally I don't see oil staying in the $30-50 range until 2019.



bmoney said:


> I'm exhausted and tired of managing this position, ACB in the low $10s now time to move on.


+1 this stock has been such a dog. But for the buy and hold investors here who in many cases would have picked up COS for > $20 (such as myself  ) it's almost certain that tendering means not getting your initial investment back for a very, very long time. Stocks like Suncor don't double in value very often...COS on the other hand could easily double and more once we return to $60-$70 oil.

I'm going to hang on to COS...my two cents.


----------



## AltaRed

protomok said:


> it's almost certain that tendering means not getting your initial investment back for a very, very long time. Stocks like Suncor don't double in value very often...COS on the other hand could easily double and more once we return to $60-$70 oil.


For those not tendering, they are assuming COS will survive low oil prices. But the test is not to use current trading values of $7-9 as the starting point. If one gambles, they are starting from a stock likely to fall back to a range of <$5. Do you feel that lucky? 

I took a 'tax loss' on this back in 2014 as I saw this continue to fall along with falling oil prices and have moved on to better things on the TSX.


----------



## Olie

Hey all, 

I'm new at buying stocks but I just have a quick question with this deal.

If one is looking to buy shares of suncor, isn't it better to simply buy 4 shares of canadian oil sands and sell it to suncor as soon as possible? The current price is 7.23 and the deal is for 1 COS for .25 of SU. So doesn't that mean that buyers are getting a premium on the price? 4 shares of COS at 28.92 vs 31.92 SU at market close?? Or is this deal only for people who had COS stock prior to the original offer in October?


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## peterk

No it's not that simple Olie. You don't just tender the shares and immediately Suncor buys them from you "sell it to suncor as soon as possible?". They are still your shares until whatever the final date is, and until then if Suncor pulls out or alters the deal, then the shares have a really real chance to fall the $4 to 5 range.

If more and more shareholders tender over the next few weeks and it becomes more apparent that the SU takeover will be successful, then the share price will rise to close the gap that you've identified.

After the original offer in October the COS shares were worth MORE than 1/4 SU shares, as the market expected that another bidder may outbid Suncor. Now the sentiment has reversed.


----------



## doctrine

COS could be bankrupt in a couple of years at the current oil price. Real pain is coming.


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## My Own Advisor

Do we think COS will go bankrupt? They must be hurting for sure...


----------



## AltaRed

My Own Advisor said:


> Do we think COS will go bankrupt? They must be hurting for sure...


It will depend on how low oil prices go and how long they stay there. COS has room on their balance sheet for some additional debt to cover fixed costs for some time, but if they start bleeding substantial negative cash flow for every barrel produced, it could catch up to them. COS shareholders should be going through the latest December COS guidance and do some of their own cash flow analysis on some 'what if' oil prices. I am surprised some of the big name analysts have not been publishing data on this but they are perhaps 'staying low' so as not to unduly influence COS shareholder tender/hold decisions.

Note: If COS hits the wall due to prolonged low prices, there will be many other 'name' companies likely heading there too.

Added: From their December guidance, $45 oil @0.75 CAD, cash flow/share from ops is $0.89/share and free cash flow/share is $0.28. It does not take a genius to calculate that $35 oil @ 0.70 CAD would likely result in negative free cash flow/share, though cash flow from ops could still be slightly positive. They do need to eliminate the dividend entirely, especially if the SU offer does not go through.


----------



## My Own Advisor

No doubt if oil goes to $20, and stays there, for a year or so, which is possible I think but not likely, that will cease all oil sands operations. Probably exactly what other oil producers want...


----------



## dubmac

http://www.bloomberg.com/news/artic...l-with-canadian-oil-sands-for-merger-ijjchzvl
can't wait to see the details!


----------



## bmoney

dubmac said:


> http://www.bloomberg.com/news/artic...l-with-canadian-oil-sands-for-merger-ijjchzvl
> can't wait to see the details!


Likewise! I just might come out of this unscathed. My $10 and $11 covered calls expired worthless on Friday. Wishful thinking but at 3:1 offer I'd break even.


----------



## 0xCC

COS Shareholders will get 0.28 of a Suncor share instead of 0.25. A whole 12% higher after all the drama over the last couple months. That extra 12% is going to make up for the fact that Suncor isn't as sensitive to oil prices as COS? Or maybe, just maybe at $30 oil they would have had to shut down operations until oil prices came back up.

http://finance.yahoo.com/news/suncor-energy-canadian-oil-sands-114200101.html


----------



## treva84

0xCC said:


> COS Shareholders will get 0.28 of a Suncor share instead of 0.25. A whole 12% higher after all the drama over the last couple months. That extra 12% is going to make up for the fact that Suncor isn't as sensitive to oil prices as COS? Or maybe, just maybe at $30 oil they would have had to shut down operations until oil prices came back up.
> 
> http://finance.yahoo.com/news/suncor-energy-canadian-oil-sands-114200101.html


I too also find it funny. I think they are secretly sweating bullets behind closed doors. The 12% increase got the Board and Seymore Schulich's approval. I find it funny - it seemed as oil tanked they were steadfast even though there's a real possibility that COS may go bankrupt and they wouldn't waiver from that to save face. Then SU slightly increases the offer and they are all ready to jump ship. 

I suspect they've been negotiating with the board since they extended the offer to determine the minimum that would be required for the board to publically approve of the offer.

Other notable facts - Suncor wants 51%, down from 68%, and if the deal doesn't go through with certain conditions met COS has to pay a $130 million "break fee" to SU.


----------



## Hiitsme

bmoney said:


> Likewise! I just might come out of this unscathed. My $10 and $11 covered calls expired worthless on Friday. Wishful thinking but at 3:1 offer I'd break even.


I'd rather wait it out and take the chance of on a higher return when oil recovers, but oh well, I'm not in as deep as most that will support the new deal. I bought and sold twice (now 3 times) at profit of a couple bucks a share, so just lucky on my part that I'm not looking just to minimize losses.


----------



## plasmasnake

treva84 said:


> Other notable facts - Suncor wants 51%, down from 68%, and if the deal doesn't go through with certain conditions met COS has to pay a $130 million "break fee" to SU.


So with 51% they would become the majority shareholder, but it wouldn't be enough to force the remaining shareholders to tender their shares, right? I've held onto my shares so far, but now I'm uncertain as to what I should do.


----------



## 0xCC

51% of shares tendered to Suncor before the February deadline = done deal. Every share not tendered will essentially become tendered after the deadline in that case and the deal will close (and COS shares will become 0.28 of SU shares and COS will cease to exist) at some date after the February deadline.


----------



## Doryman

So... as a neophyte investor sitting here with some COS stock in my grubby fist, what exactly happens now? Do I have to contact my broker before I get SU stock, or will my shares simply switch over when the deal is finished?

Edit; Nevermind, looks like I missed OxCC's breakdown. Thanks for that, man. Sometimes I feel the need to have things dummy-proofed for me, just to eliminate any possibility of misunderstanding.


----------



## doctrine

Given they already had something like 40% (plus or minus) tendered, and it looks like enough shareholders who didn't originally support the bid are now in favour to put it above 50%, so this is definitely a done deal. They might even exceed the 66% original target. Sell your shares now or wait for them to be converted to SU.


----------



## My Own Advisor

doctrine said:


> Given they already had something like 40% (plus or minus) tendered, and it looks like enough shareholders who didn't originally support the bid are now in favour to put it above 50%, so this is definitely a done deal. They might even exceed the 66% original target. Sell your shares now or wait for them to be converted to SU.


Yup.

Time to tender or wait it out until your shares are converted. Either way, a done deal, happy with the 12% premium over the last offer thanks very much. It pays to wait these things out and not be too hasty.


----------



## treva84

One thing I dislike about this deal (as a SU shareholder) is the COS debt that SU is taking on (2.4 billion!) which previously wasn't a part of the offer. Hopefully dat SU dividend isn't cut.


----------



## bmoney

Just tendered my shares. Remember to call your broker if you favour the deal. I'm only 19% in the hole at the current stock price, not bad all things considered.


----------



## Karlhungus

treva84 said:


> One thing I dislike about this deal (as a SU shareholder) is the COS debt that SU is taking on (2.4 billion!) which previously wasn't a part of the offer. Hopefully dat SU dividend isn't cut.


The debt was always part of the deal


----------



## My Own Advisor

I've got some losses non-registered but those can be carried forward to offset some gains I have. Overall, happy. SU shares dropped...hopefully going lower and will fetch more.


----------



## OurBigFatWallet

What's funny about the accepted offer is that both companies are now supposed to bury the hatchet and work together despite what was said in the media by both sides about the other


----------



## 0xCC

My Own Advisor said:


> I've got some losses non-registered but those can be carried forward to offset some gains I have. Overall, happy. SU shares dropped...hopefully going lower and will fetch more.


Yesterday it was cheaper (by about 0.5%) to buy COS shares than it was to buy SU shares assuming the deal goes through.


----------



## 0xCC

bmoney said:


> Just tendered my shares. Remember to call your broker if you favour the deal. I'm only 19% in the hole at the current stock price, not bad all things considered.


Just out of curiosity, I have never tendered shares for any companies I've held stock in that were involved in a merger/takeover. When you tender your shares do you get the SU shares right away or does the deal have to close before you get the SU shares?


----------



## peterk

Sold the last little bit for $8.50 just now. Done and done. That was a fun ride for the past 14 months. All in all I made a 6% gain. Literally the only resource sector stock that I'm not in the red with for 2014-2016. :hopelessness:


----------



## peterk

If one were in a loss position on COS unregistered (a great number of people, I'd imagine), wouldn't it be beneficial at this point right now to sell your COS and buy SU claiming the capital loss on COS for 2016? Instead of tendering, having your COS ACB roll into your SU ACB, and dealing with a capital loss/gain some distance in the future...

This wouldn't run afoul of the superficial loss rule right? Despite COS shares being equivalent to 0.28 SU shares, essentially, they are still separate entities.


----------



## 1980z28

peterk said:


> Sold the last little bit for $8.50 just now. Done and done. That was a fun ride for the past 14 months. All in all I made a 6% gain. Literally the only resource sector stock that I'm not in the red with for 2014-2016. :hopelessness:


Sold all my cos 10000 shares,paid 7.06 sold at 8.50 yesterday

Now sitting on just under 200k in cash,,,will start to pick away

Nice to be completely out of oil


----------



## Nerd Investor

peterk said:


> If one were in a loss position on COS unregistered (a great number of people, I'd imagine), wouldn't it be beneficial at this point right now to sell your COS and buy SU claiming the capital loss on COS for 2016? Instead of tendering, having your COS ACB roll into your SU ACB, and dealing with a capital loss/gain some distance in the future...
> 
> This wouldn't run afoul of the superficial loss rule right? Despite COS shares being equivalent to 0.28 SU shares, essentially, they are still separate entities.


I don't believe there would be anything preventing you from claiming the loss on the share exchange, so I don't think selling and then buying Suncor is necessary. The election that lets you defer the gain/loss isn't mandatory as far as I know. I'll likely be using the higher cost basis since we're already in 2016 when the transaction is going down (so I can't claim and carry back on this years taxes anyway; I think I'd prefer the higher cost base if/when oil finally rebounds a bit).


----------



## AltaRed

0xCC said:


> Just out of curiosity, I have never tendered shares for any companies I've held stock in that were involved in a merger/takeover. When you tender your shares do you get the SU shares right away or does the deal have to close before you get the SU shares?


You don't get your shares right away. The share exchange happens on a set day when the deal takes effect. It should happen automatically via your brokerage.


----------



## 0xCC

I was thinking that the share exchange wouldn't take place right away. Thanks for the confirmation.


----------



## Nerd Investor

Probably a dumb question, but I tendered my shares back when the original offer took place. Then Suncor extended the date. Then Suncor upped the offer to 0.28 and extended the date again (which is where we are now). Is my original tender still valid or when they extend the date/bump the offer would that cancel my previous tender and require me to tender again? 

It's basically moot anyway, since this will go through regardless of what I do, I suppose I''m just curious.


----------



## dubmac

Nerd Investor said:


> Probably a dumb question, but I tendered my shares back when the original offer took place. Then Suncor extended the date. Then Suncor upped the offer to 0.28 and extended the date again (which is where we are now). Is my original tender still valid or when they extend the date/bump the offer would that cancel my previous tender and require me to tender again?
> 
> It's basically moot anyway, since this will go through regardless of what I do, I suppose I''m just curious.


Call your broker regardless to find out. I did the same thing. They told me that my original tender was still in place & new one not necessary.


----------



## Nerd Investor

dubmac said:


> Call your broker regardless to find out. I did the same thing. They told me that my original tender was still in place & new one not necessary.


I'll do that, thanks.


----------



## dime

peterk said:


> If one were in a loss position on COS unregistered (a great number of people, I'd imagine), wouldn't it be beneficial at this point right now to sell your COS and buy SU claiming the capital loss on COS for 2016? Instead of tendering, having your COS ACB roll into your SU ACB, and dealing with a capital loss/gain some distance in the future...


This is what I'm considering at the moment. The offer is "subject to the conditions described" and who needs all the added complexities. Why not just sell it for the 0.28 value in exchange that it currently trades for. At the end of the day today SU was 31.83 and COS was 8.91 which is 0.28 of the SU price. Whats the advantage of tendering your shares and agreeing to the offer? Avoiding $20 commission I suppose? I'd rather be able to claim the capital loss this year.


----------



## Karlhungus

Question, I asked my broker (TD) what would happen if I didnt tender my shares and the deal still went through. He said I would have COS shares still. I tried to clarify but he wasnt very helpful, maybe someone can help. If the deal goes through, how are there still COS shares ? Arent they either all converted or none at all?


----------



## AltaRed

You only have COS shares until SU forces the rest. See https://www.mccarthy.ca/pubs/guide_mergers.pdf Questions 16 and 20.


----------



## My Own Advisor

You will be forced into a capital loss. re: if the deal goes through, you won't have COS shares.


----------



## londoncalling

http://www.theglobeandmail.com/repo...adian-oil-sands-shareholders/article28635145/

Finally...


----------



## My Own Advisor

Yup. Good news.


----------



## Nerd Investor

For anyone who's been through something similar, how long have you typically had to wait to get your news shares? Just wondering when I can expect my SU shares.


----------



## Causalien

So, what happens if you do not tender your shares?


----------



## nortel'd

Causalien said:


> So, what happens if you do not tender your shares?


The X-dividend date for COS is today Feb19, 2016 and SU is Mar 02, 2016. 

I got the impression if I did not tender my COS shares by 11:59 AM Toronto time today, I would not be entitled to COS's dividend of $0.05 per share.




> Deadline for Client Instructions: February 19, 2016 11:59 AM Toronto time
> 
> Issue Expiry Date:
> February 22, 2016 05:00 PM Calgary time
> 
> Instructions:
> Should be given to your account representative by telephone.
> 
> 
> Holders are advised to read the “Important Information” section of this notice prior to selecting an option(s).
> 
> TERMS:
> 
> Suncor Energy Inc. (the "Offeror" or "Suncor") hereby offers (the "Offer") to purchase, upon the terms and subject to the conditions described in the Offer to Purchase Circular dated October 5, 2015, all of the issued and outstanding common shares (the "Company Common Shares") of Canadian Oil Sands Limited (the "Company" or "COS") together with the associated rights to purchase Company Common Shares ("Rights") issued and outstanding under the Shareholder Rights Plan, including any Shares that may become issued and outstanding after the date of the Offer but prior to the Expiry Time. Holders have the option of:
> 
> Option 1: Tender -To receive 0.28 of a common share of Suncor Energy Inc. (SU (TSX) (NYSE)) (867224107), for every common share of Canadian Oil Sands Limited tendered.
> 
> HOLDERS WHO DO NOT WISH TO TENDER THEIR SHARES TO THE OFFER NEED NOT SUBMIT INSTRUCTIONS.
> 
> IMPORTANT INFORMATION
> 
> Dividends and Distributions: A Shareholder who accepts this Offer shall be entitled to receive any regular quarterly cash dividends of not more than $0.05 CAD per Share declared by the Company with record dates and payment dates consistent with past practice and having a record date occurring prior to the date that the Shares are taken up and paid for by the Offeror.
> 
> All Shareholders who tender their Shares to the Offer will receive the increased consideration per Share, including those Shareholders who have already validly deposited their Shares under the Offer and not withdrawn such deposit. Shareholders who have already tendered their Shares to the Offer do not need to do anything further to receive the increased Offer Consideration.
> 
> The Amended Offer will continue to allow a tax-deferred rollover for Canadian shareholders of the Corporation.
> 
> As a result of lowering the minimum tender condition to 51%, there have been changes to the expected U.S. federal income tax consequences to accepting the offer and Suncor expects that the receipt of Suncor Shares in exchange for Common Shares pursuant to the Amended Offer may be a taxable transaction for U.S. federal income tax purposes. Shareholders of the Corporation are urged to carefully review the amended U.S. federal income tax disclosure to be provided in Suncor’s notice of variation and change in respect of the Amended Offer.


I called this morning and tendered my COS shares.


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## AltaRed

The smart to have done was to tender the COS shares to get SU's dividend. SU is going to take out the remaining shares of COS anyway, so get the SU dividend SU is offering up as an incentive to tender. A no brainer.


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## fstamand

I'm still holding a few stocks, should I sell them now, or will it be automatically converted to SU at some point?


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## AltaRed

fstamand said:


> I'm still holding a few stocks, should I sell them now, or will it be automatically converted to SU at some point?


Without knowing the details, they should be auto-converted soon (look at the deal particulars). No commission if you do it that way.

http://www.ctvnews.ca/business/sunc...r-cent-of-canadian-oil-sands-shares-1.2767417

http://www.albertaoilmagazine.com/2016/02/suncor-wraps-up-cos-takeover/

The question is when. After the Mar 23rd mtg perhaps? April?


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## fstamand

Thanks. It looks like it's still trading, so I would think it's possible to sell. Good to know about the commission.


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## bmoney

I tendered earlier and this week marked this first time in the past 18 months? that I am now in the green on my oil sands play.


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## gardner

Since I've sewn up my 2015 taxes I am now looking forward to 2016 -- I am not 100% sure what my options are for treating the COS-->SU deal. TDDI is showing a straight-across trade of some number of COS at my original cost basis, for some amount of SU, at the same cost. As they report it, there is no loss or gain. But I recall having to fill out a "joint election form" in the past to carry across the ACB with no gain/loss. Was there something different in the COS deal that this paperwork is not required?

If I want to, can I report a loss in 2016 and peg my ACB of the SU at the FMV on the day of the deal? Generating a loss that I could carry back to 2015 would be a win.


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## AltaRed

As I understand it, when a whole company is bought out and there is merely a share swap, it is understood this is not a taxable event (and the acquirer seeks and gets a ruling from CRA on this. It is only when there is a share + cash deal that it gets messier and elections need to be made. I do not believe you have an option to trigger a 'deemed disposition' event but I could be mistaken.


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## Parkuser

*2016 Taxes*

I’ve just got T5008 from the TDDI and the proceeds from the tender of my COS shares to SU are marked as equal to a total cost of COS, i.e. no (paper) loss. I tendered the shares (as per my TDDI Feb statement) on Feb 10 paying on paper $41.46 for 1 SU share. SU closed on Feb 10 at $29.54. I thus had a (paper) loss of (41.46-29.54)=11.92/sh. (The tender was recognized as happening on Feb 10, I got SU dividends.) On the other hand, COS was last listed on Feb 22, when SU closing price was $33.89, now the loss would be (41.46-33.89) = $7.57.

Where would I be able to find information how to treat this transaction? No tax event, loss as per day of tender, or loss as per day of delisting?

The info on the Offer circular is somewhat opaque:

p.5 (highlighted in yellow)
Subject to the qualifications set forth in the Circular, if you are a resident of Canada and hold your Shares as
capital property and you sell your Shares pursuant to the Offer, you generally will not realize a capital gain (or
capital loss) as a result of an automatic tax-deferred “rollover” pursuant to Section 85.1 of the Tax Act (and the
corresponding provisions of any applicable provincial legislation). 

p. 64
A Resident Holder who exchanges Shares for Offeror Common Shares in a Direct Exchange will be deemed to
have disposed of such Shares under a tax-deferred share-for-share exchange pursuant to Section 85.1 of the Tax
Act, unless such Resident Holder chooses to recognize a capital gain (or capital loss) on the Direct Exchange as
described in paragraph (b) below.
b) A Resident Holder may choose to recognize all of a capital gain (or capital loss) in respect of
the exchange of Shares for Offeror Common Shares by including the capital gain (or capital
loss) in computing the Resident Holder’s income for the taxation year in which the Direct
Exchange takes place. In such circumstances, the Resident Holder will realize a capital gain (or
a capital loss) equal to the amount, if any, by which the fair market value of the Offeror
Common Shares received, net of any reasonable costs of disposition, exceeds (or is less than)
the aggregate of the adjusted cost base of the Shares to the Resident Holder, determined
immediately before the time at which the Shares are taken up by the Offeror.


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