Anybody Expecting A COP Counteroffer For Surmont ?- COP has a strong reputation of being great and skilled value petroleum property managers (just ask CVE)
- SU is buying the TotalEnergies portfolio (31.23% FH plus 1/2 of Surmont) for less than the market value of MEG (MEG has another ~ USD 1 billion in long term debt)
- Surmont is a high-quality SAGD asset (although not as good as MEG) with a BOP of 150,000 bbls/d and a SOR of 2.6
- MEG has a MAX BOP of 110,000 bbls/d with a SOR of 2.25 in Q1/2023
- COP does not want FH but might (?) be willing to take full control and ownership of Surmont
- they already operate Surmont
- Surmont has a regulatory approval for 189,000 bbls/d of BOP
- my view is that SU is getting the assets on the cheap but more than the TECK buy share of FH
- I have no doubt that COP has the financial muscle and legal right of first refusal to acquire the other 50% of Surmont that it does not own
- only red flag is the high carbon emissions of Surmont but that can be resolved with new technology (solvents, electromagnetic heating , hydrogen co-generation plants etc.) and the ongoing Pathways Alliance 400 km.CO2 pipeline / CC&S Cold Lake project
- Willow Project is a go in Alaska so COP could conceivably concentrate on that mega property instead
- so my guess is maybe a 1 in 4 chance that they may step up and bid for Surmont
Z173