RE:RE:Response to 3 Part QuestionLooks like WCP's sp is worth as much as VRN around 65-75 wti. Anything higher and VRN takes off and WCP lags. Imo VRN is a better bet if you believe oil will go higher. If you believe oil remains around 75 usd maybe wcp would be better.
baranja wrote: Tell you what.. during the last few days, WCP has shown to be much healthier then VRN/CPG. Nut effect.
retiredcf wrote: 1) The TSX energy sector is up 10% YTD, and WCP is up 14% (not including dividends) so it has done better than most. Investors remain skeptical of the sector despite low valuations. This could be due to interest rates, worry on the economy, concern over 'green' alternatives or pretty much any other explanation.
2) WCP has $1.3B debt, which is about 8 months' cash flow. Debt is down $500M since the end of 2022. There is a new tax on buybacks but we think that will still be the strategy. WCP could pay special dividends so it is not committed to a higher regular dividend in a cyclical industry. It has said it will allocate $200M in buybacks in the second half of 2024.
3) Pembina is buying a working interest in the Kaybob processing facility. PGI (Pembina subsidiary) becomes the operator, but WCP also at the time entered into a take-or-pay agreement for priority access. Thus, the net cash to WCP is not expected to be material because of this secondary agreement. Essentuially WCP retains priority but is not committed as the operator any more. We would not view it as hugely significant in terms of any changed outlook. (5iResearch)