RE:RE:Can anyone explain?I think I got it now.
CVE is trading low because WCS is at $33. It doesn't trade with WTI. Aeco nat gas is well under $2. CVE has $9 billion in debt and analysts are frustrated that CVE isn't selling off its refinery and all their non-oil sands assets. CVE doesn't want to sell them because they believe they are more valuable long term. Whatever assets they do have on sale will probably not get a good price because natural gas prices are so low.
HOWEVER, I believe CVE is one heck of an opportunity. If you take a look at the historical WCS-WTI differential, -$25 to -$30 rarely holds for more than a few months, and the CVE CEO said as much today. He said that it will narrow in the short term because the pipeline that is running at 80% will "soon" go back to max flow. Also, they will start shipping oil by rail this summer, which will narrow the differential.
For every extra $1 in WCS, they make like $120 million extra a year. They don't need to sell any assets, I think they can whittle down debt with their FFO. Analysts always have a very short term, myopic view. CVE should do what they're doing and they will do very well in a few years.
Read more at https://www.stockhouse.com/companies/bullboard?symbol=t.cpg&postid=27569348#7b5V5oS0AlUXECy7.99