RE:RE:RE:RE:RE:RE:This is why SU shareholders should be unhappyPabloLafortune wrote: While I agree that the Altagas CEO has done a masterful job,I feel the situation is different. The Altagas CEO was pretty much given (asked for?) carte blanche. Whereas the incoming CEO of Suncor will not have carte blanche obviously - the (controlling?) major shareholder Elliott wants retail and refining sold. Not sure what kind of CEO (yes man?) they can attract when the job comes with an asterisk. Personally, I think what Suncor needs is better coaching, better blocking and tackling - much better safety, continue unloading non core assets (would be nice to see the Atlantic offshore assets sold to a crown corp alas), bring debt down to target level, invest in natural gas as a cost control measure and for long term energy future, reward shareholders with dividends instead of buybacks as clearly the latter doesn't work whereas the former works very well (see Tourmaline) - buybacks are like building passenger cars when customers want trucks and SUVs (dividends). I'm sure there's some "reason" they're doing buybacks but it sure as heck doesn't work for the share price.
On natural gas, I think its obvious that the world needs more of it and over time, I believe the price per BoE will approach oil (already higher in Asian and Europe) and eventually surpass it which makes sense - cleaner diesel sells for higher price therefore cleaner energy (natural gas) should sell for more than oil. We all know its a matter of infrastructure etc. but the point being its an input cost for SU it starts being weird when some of your input costs cost you more than your end product but then again, would it be politically acceptable to use oil instead of natural gas to power co-generation, obviously not. Therefore Suncor should invest in natural gas, a lot of these companies aren't that expensive right now either (bad hedges etc) as there's really only 2 buyers CNQ and TOU neither of which are in the business of paying large premiums. You can see how much CNQ has ramped up natural gas over the last 2-3 years with acquisition of Pony and Storm and own internal development and IMO, Suncor should do the same.
Between refining and retail, I don't see too many new refineries being built so it seems that would still be a good business medium term (while EV usage is going up, so is the population). With retail someone else can make better use of the real estate probably, also being Suncor they may get sucked into putting unproftiable charging stations all over, may not be good for shareholders.
Its just my (strong - and admittedly, totally amateur) opinion of what is better for SUncor long term. Either way, we've come to the fork in the road and we've taken it with Elliott and even that is better than the status quo as having a BoD with no skin in the game is not a good thing (CNQ (ME), CVE (LKS), IMO (EM), TOU (MR) all have skin in the game). Now we have it but it does come with an asterisk - unlike the other big 4 Canadian E&Ps, Elliott doesn't have particular expertise in O&G (well neither does LKS but they did own Husky for a few years so they know full well what they don't know the same can't be said for Elliott).
And therein lies the share price problem. You now have skin in the game but not expert skin in the game. And that non expert skin in the game has in effect handcuffed the future CEO. That can't possibly lead to an optimal outcome long term though its better than nothing (no skin in the game).
For an amateur....lol....you are doing pretty good...lol
I agree wholeheartedly about your point about the difference between ALA amd what is likely to happen at SU regarding the CEO. The other thing about ALA is that they brought in a guy who knew the business and especially the US side of the business where most of the growth and ultimately most of the assets are held.
I also agree with your views regarding natural gas.
You are right about SU coming to a fork in the road. My fear is that they will end up with a compromise that will be detrimental to shareholders. IMHO, they should either keep what they have, do the job better as you suggest and morph the company into a future powerhouse using the tremendous cashflow they have or conversely, sell off the gas stations and the refineries and put the oil sands up for sale or a merger with say CNQ. Half measures in between will not serve the best interests of current shareholders.