Chris007 wrote: 5X EV/CF seems to be the typical multiple for the large caps over the long term...I guess investors are willing to award CNQ that multiple due to it proving to be THE all-weather/any market condition Canadian o&g stock to own.
I mean, in 2020, when most companies had to cut their dividend, take on more debt, and cut capex/production...CNQ was growing production, keeping their dividend, making acquisitions and paying down debt...which is pretty crazy when you think about it
That being said, never say never i guess.
However, on the other hand, as NPCexe pointed out:
1) its going to be difficult for oil prices to stay above $100 for any sustained period of time....obviously the current competitive environment for oil is much different than the late 90s-early 2010s where the key narrative was that of peak supply (AKA the world is running out of oil). Obviously the shale revolution radically changed the situation,since it turns out thats theres a hell of a lot more oil in the ground than anyone ever imagined, albeit, that it is more expensive to extract than conventional
The EIA expects a gradual ramp-up in US production back up of production to an average of 11.8M bpd in 2022...obviously $100 crude would speed up that process, and likely lessen producers hesitancyy about increasing production
2) OPEC+ is still sitting on the sidelines with 8 million bpd of spare capacity (
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/061521-top-oil-forecasters-warn-oil-prices-could-hit-100b-this-year)
Fact of the matter is, there are no PHYSICAL constraints on supply...the reason that prices are as strong as they have been is almost exclusively due to the fact that supply is being suppressed as a financial decision, due to the covid pandemic.
ManitobaCanuck wrote: Thx buddy .
Don't you think these stocks might get re rated or CNQ might have a better EV/fcf when oil is at 100$