Crew Energy Inc T.CR

Sell in 2023?

[BeatTheOddsSqua]

Cheadale lets play armchair quarterback for a moment.

You work for a major E&P company active on the Montney trend and you are the head of the acquisitions department. There is one significant asset left on the table.

Do you:

A - wait and try to buy the asset after completion of a major pipeline that feeds a large LNG project and risk losing it to a competitor 

B - try and acquire the asset before the pipeline is constructed, even if you are forced to pay what will be perceived as a premium, but you know will be pennies over the life of the asset.

CNRL and Conoco made their decision.

Please provide feedback.

[YesWayJose]

This post has been removed in accordance with Community Policy

[BeatTheOddsSqua]

Jose, regretfully we will not be offering you a position with our A & D department at this time but we will keep your resume on file.

[Cheadle12]

I know what you're saying here, but I think i'm misunderstood. The value roars in 2023/24, but that doesn't mean that acquirers wait until then to acquire.  Typically, if you have a good relationship, you can have the aquiree align their capital plans with what what the buyer wants, sometimes years in advance.  This was the case with Kelt/Conoco & finishing the gas plant

[BeatTheOddsSqua]

Thanks Cheadle. I wasn't aware of the Kelt situation and I appreciate the insight. From the seller's perspective, Crew is currently negotiating from a position of strength but they have to be careful. As 2023 approaches and the big players have taken all of the Coastal GasLink pipeline capacity, Crew as a smaller player may not be invited to the party. In addition each passing year

[TheGambler888]

I don't think Crew need to worry about being invited to the party. Numerous pipelines that cross through their land already giving them diverse market share. For example the TC groundbirch main line that will tie into the Saturn station. Also the CN line cuts very nicely through thier land as well. Lots of potential for Oil, LPG terminals, storage, blending ect. Makes sense why they partner

[BeatTheOddsSqua]

Gambler you are correct, lots of other pipelines besides LNG available to Crew, so they do not have to supply overseas markets and can always deliver to North American markets. The overseas markets would potentially offer a higher gas price, but at the moment they don't as they are oversupplied with LNG. Hopefully that changes by 2023. In reading your post you mention potential for oil and

[TheGambler888]

Not bitumen but C4, cut down condensate with C4.  Ridley Island  is such a busy little terminal. Just shows the potential for the area. Ridley Island will get so busy sometimes that CN has to put an embargo on them.

[BeatTheOddsSqua]

Gambler, thanks for the explanation. You through me off track when you mentioned oil and blending  in your original post. Blending C4 with condensate would certainly provide the full range C3 - C5+ required as feedstock for oil refineries and the petrochemical industry.