Canadian Oilsands is over nowwho is next?
will it be MEG?
it seems to me that consolidation will continue in the Canadian oil patch for a few reasons.
1-there are many good bargains when you look at high quality companies
2-low CND will help buffer the losses on low oil and gas prices
3-and finally investors that are willing to take low-ball offers just to recoup some of their capital and move on.
if Suncor's takeover of COS has taught this market anything, it's that shareholders in Canadian oil and gas companies are willing to sell low and get whatever they can for their battered investments.
Now MEG fits my criteria for a battered O&G stock and there is some justification to this.
Maybe is was overvalued to begin with trading at higher valuations because ofr long life reserves.
maybe the market wasn't concerned because they had stable ratings and high oil prices
maybe debt wasn't an issue again because everything was rosy at 100 WTI.
so now the only quesiton what is MEG to an acquirer like Imperial or maybe even suncor ?
it will depend on access pipeline value, storage and infrastructure value, value for high quality SAGD operations with very low capital investment needed to maintain and even increase produciton 3-5% in 2016, tax value of losses on the books, and long term debt???
I would think 6.50 is a very good deal for a buyer or a starting point all considering, and maybe make it friendly at 7:50 range, plus if it's share deal like SU/COS, then the buyers are using strong paper to buy weak paper, and if it's a froeigh buyer, then it's very strong paper with strong currency to buy weak paper with weak currency.
of course I'm guessing but more and more companies will get bought out in 2016, jsut a question of price and timing.
DYODD