Longer-term great newsI just finished reading the press release, which I give management kudos for addressing all of the most sensitive issues facing Syncrude. I have believed for some time that Syncrude could be operated much more cost efficiently . Regretably it often takes a crisis to spur the kind of cost cutting that is taking place now, better late than never. Once oil prices recover I can't imagine Syncrude being allowed to grow its cost structure. This has been nothing short of a near death experience and management within the joint venture owners and within Syncrude should and I believe will use this experience to keep a much tighter grip on costs. Isn't it amazing that Syncrude can reduce costs by around $1B +- without affecting production or reliability. Think of that going forward. So I see this as a very big silver lining to an otherwise ugly near -term problem.
Secondly management is making it very clear, practically shouting, that COS has the capacity to be in the game for the long-haul by walking us through the the current debt, and related maturities, and the undrawn bank facilities.
I am a longterm investor and no I don't like the dividend being cut however it was prudent. There will likely be near-term selling pressure but I believe that should abate and turn to buying opportunity. On the other hand I very much like the cost structure being driven to much greater efficiency as it is a key underpinning of future dividend growth.
Last thought is perhaps COS should inItiate a stock buy back using some of that debt capacity and when the stock has regained its footing sell the stock in a secondary offering to other long term investors? I recognize this has various risks and debt rating implications and complexities however it is also a strong signal to the equity markets.