Post by
Sunsurfer12 on Oct 21, 2022 7:24pm
posting on Yahoo-ARX a buyout target for CVE? Would be sweet
Interesting allusion to ARX being a target by Cenovus (or Tourmaline) - source RBC analyst Greg Pardy
Cenovus Is Working On Ways To Cut Its Single Biggest Cost
Condensate!
From Stockwatch Energy via loonietunes.
"Here in Canada, oil sands producer Cenovus Energy Inc. (CVE) added 20 cents to $23.48 on 9.47 million shares. It had no news today, but got a lovely mention from RBC analyst Greg Pardy, who released a boosterish research note this morning about his "insightful" chat with chief operating officer Jon McKenzie. Mr. McKenzie was seemingly trying to stir up some excitement ahead of Cenovus's third quarter financials on Nov. 2. Mr. Pardy was all too eager to help, reporting that there is "Lots Going On" for Cenovus and for Mr. McKenzie, about whom Mr. Pardy thought it important to note that he "remains very happy in his current role as COO."
Mr. McKenzie's insights included hammering home the usual message on debt reduction. Cenovus, which was swimming in $11-billion in net debt this time last year, is hoping to get this all the way down to $4-billion by the end of this year or early next. This would give it more room for dividends and share buybacks. (It currently pays a 10.5-cent quarterly dividend, for a yield of 1.8 per cent.) Cenovus is also working on ways to cut costs, particularly its single biggest cost, which is condensate (used by oil sands producers to dilute bitumen enough to flow through pipelines). Lastly, Cenovus "continues to work with BP on the incident at the Toledo [Ohio] refinery in September," as Mr. Pardy diplomatically phrased it. (The incident was a fire that killed two employees and likely caused enough damage to prevent the facility from being operational again until next year.)
Mr. Pardy ended on a cheerful note, opining that Cenovus "should trade at an average/above-average multiple vis-a-vis our major peer group, reflective of its capable leadership team, strengthened balance sheet, operating momentum and bolstered shareholder returns." He reiterated his "outperform" rating and his price target of $32. As ever, investors may wish to note the chummy relationship between Cenovus and Mr. Pardy's employer, RBC, which must disclose that it "makes a market" in Cenovus's securities and receives compensation from Cenovus for various products and services."
Again...buying Canada's largest condensate producer would solve this problem and make CVE a pretty penny to boot. By most accounts ARX management is not running their business as well as CVE's management could. I tend to agree for the most part but once the hedges fall off at the end of 2022 ARX will be too expensive. Now, it is a bargain.
Comment by
Quintessential1 on Oct 21, 2022 7:31pm
LOL. That is my exact comment from the CVE board. Verbatim I would be willing to take 1.25 CVE shares for every 1 of ARX shares. GLTA Longs
Comment by
Sunsurfer12 on Oct 21, 2022 7:55pm
lol...well at least i didnt try to take credit for the post..have a good weekend