Veren Inc T.VRN

Canadian $

[Iluvyellowsnow]

As the price of oil has gone up so too the Canadain dollar. I'd love to hear your comments on how the rise of our dollar will affect the bottom line of CPG and other oil and gas plays in Canada.

[highalpha1]

Oil prices are issued in USD. As the Canadian dollar rises, CPG's valuation decreases in Canadian dollar terms (one way this will materialize is that the gap between CPG shares traded on the TSX and NYSE will tighten as the Canadian dollar rises). This applies to all Canadian O&G companies. However, some companies like CPG are in a unique position. CPG (like, for example, ERF) has

[LiquidOctopusV2]

This is a great question.  It could be the basis for an undergrad ECON paper. And I don't have any idea what CPG does specifically.  They'd be bringing in less CAD for a barrel of oil but I think drilling equipment used in Canada generally is manufactured in the US, so a higher CA dollar brings those costs down.  That would need to be considered in light of reduced capex.&

[Iluvyellowsnow]

Thanks LiquidOctopus And HighAlpha for your responses. It seems that there are many variables that will have an imact on the top and bottom line and the higher Canadian dollar and hedging strategies (I think CPG hedges 40% at $65CAD or maybe that's WCP?) are just two of them. Big week coming up with Opec+ meeting on July 1. I hope they show some restraint and only increase by 500,000 barrels

[highalpha1]

@lluvyellowsnow: CPG has hedges of various amounts for the rest of the year. For the remainder of the year, CPG's hedges are slightly under 40% and hedged at about C$66. Not terrible. CPG has added some hedges for Q1 2021 at C$70+. Big week is indeed coming. I am not smart enough to predict what OPEC might do. The Saudis are in full control of the oil market. I trust in them and believe that