RE:What's up with Fort Hills?Clemxb7 wrote: Apparently the reason Suncor's stock price is limp is due to Mildred Lake running out of reserves in 10- 15 years. This is for the most part fixed if the Fort Hills deal goes through. There will be enough feedstock for the Upgrader to keep running at 100% capacity after 2035. That said an already built upgrader in Fort Mac is not going to sit idle under any circumstance in the future so it will still be a profit center.
I don't see Suncor and Total not doing the deal now simply because Conaco Philips took the Surmont piece. The 35% piece of Fort Hills also comes with some tax pools so it may be a very good deal. The cost should be just north of $2 billion which shouldn't take long to pay off because the money coming in from Suncor's recent divestitures will be realized in 2023.
Anyways I suspect there will be some sort of announcement re: Fort Hills soon prior to earnings. I hope we see the deal go through because I think it's a big positive with the reasonable price, tax pools, increased reserves and increased production.
Otherwise Suncor now pays a 5.4% dividend with good prospects for future increases and capital gains. I bought my first chunk of the current shares I own for ~$23 so there I am getting a 9% return. I also bought more in the 30's & 40's though so there’s that. (lol) I would argue buying a solid dividend is better than a GIC because the tax implications are better and you’re in for future dividend increases and potential capital gains.
It may not seem like it though WTI only averaged just ~$2 less per barrel Q2/Q1 so Suncor will have a quarter not far off its most recent. That should be boring aside from what’s up with Fort Hills.
correct me if i'm wrong but i don't see the urgency for SU to acquire total's 35% fort hill.
SU doesn't need to own the feedstock to keep the upgrader running. Pure bunk imo.
Does PPL, Keyera or TRP need to 'own' the oil, NGL or NG in order run them through their pipeline or gas plants? As an operator of FH, SU dictate what, where and when the oilsand goes to. Unless Total willing to take their 35% mined oilsand in kind to another processor, going to SU upgrader is Total's best and only option. So the talk of SU fearing not having total's 35% FH reserve is gonna hurt SU's upgrader throughput sound bunk talking to me. If i'm SU, i would sit tight and wait, and let Total blink first. I would rather see SU chasing after MEG or ATH than to chase total's 35% FH which is sitting in SU FH's backyard and Total can't move it elsewhere nor CNQ or IMO want this 35% piece in SU's backyard.