RE:RE:RE:RE:Oil Swami Nuttall gives nod to SuncorOil was at $120 per barrel 9 months ago when the price of SU was trading at $53 per share..
SU's LTD was $10 billion at the end of 2022 Q2. By the end of the year, it was $7.5 billion.
The fact that SU has the free cash flow to reduce debt is a good sign, but it doesn't boost earnings by much. The annual savings on $2.5 billion debt at 5% is about $125 million. SU has1.347 billion shares outstanding, so the $125 milion in savings represents about $0.09 per share pre-tax or under $0.07 after tax. Do you think that an increase in earnings of $0.07 is going to change the mindset of institutional investors who are looking at Suncor as a rapidly depreciating asset? Why do you think Teck sold its Fort Hills assets? They sold because they identified a better way to utilize the funds.
The market gets uneasy about a company that has too much debt, but the market hates companies with no growth prospects. The entire point of being a public company is to leverage the ability of a company to raise capital by issuing equity or borrowing so that it can grow. SU is doing the exact opposite.
The writing is clearly on the wall about where the world is headed and SU doesn't have a ticket on the train. Worse still, SU doesn't appear to want a ticket on the train even though it has the free cash flow to do so. Discussing how SU is lowering its debt is like trying to bail out the Titanic with a thimble.
I hope for the sake of all SU investors that Elliotte Management is able to exert its will on the future of SU. Maybe Elliote can point to 7-11's new strategy of adding EV super chargers to its sites as a means of looking to the future. In the meantime, the fact that SU got such disappointing bids for Petro Canada should be a huge wake up call to management and to investors.
SU is going to continue to provide trading opportunities because the price fluctuations in oil plays is incredibly erratic. However, I believe that the meltdown in oils from 2015 to 2022 is going to look like child's play in the coming years.
I'm going to try to stop posting here because I'm clearly wasting both my time and yours.