Cenovus Energy Inc T.CVE

Strengths / weaknesses

[SHayden]

Strengths

Large production base
Multiple grades
Multiple revenue streams
Vertical intagration
Massive liquidity (credit avaliability)
Refining
Rail access
Pipeline access
Co-gen
Line 3 / TMX entering operation soon (narrowing of the WCS diff)
Most debt is termed out and locked in rates

Weakeness
Debt (Although this is a lot less of a concern that it is made out to be)
Political / ESG
vunerable to oil prices / opec
Operating assets in an enviroment they have less experiance in (off shore / china)
Superior is inactive

Profit is a poor metric to use for companies like this because of inventory, there is a value placed on P1/P2/P3 depending on the current price of oil they will re-evaluate the value of those reserves which will create a meaningless profit or loss on the financal statements. This is why profit is not a valuable metric for a company like this. When you have to de-value 9 billion barrles of oil, that is going to really impact the statements. 

Cash flow is better as it shows the cash generating ability of the company. Debt reduction is another good metic however this also gets scewed by the currancy changed from CAD to US. Also debt reduction is harder to read out when a takeover has occured as there will be a massive ammount of one time costs in each of the quarters for the first year, but they are generally most heavily weighted on the first two.

Cenovus is a world class SAGD operator, as time goes on and they optimize the HSE assets the cost of production will come down also debt will be reduced. We will see the cost of production reduced and interest costs reduced. This will result in more excess funds on hand. Once oil has reached a stable place and they do not need to re-evaluate the value of the p1/p2/p3 reserves we will have clearner financal statements to read and "profit" will be a meaningful metric, but at this time it is not due to the reasons mentioned above.

[oilandgasmick]

I agree with all the strengths and weaknesses listed here. As for "weaknesses" the best moves are to (a) reduce debt thru cash flow and demonstrate this in the next quarterly results (b) get out of SE Asia and reduce the political risks. I think these political risks are rising every week in the face of Chinese agression but again who buys CVE out at a reasonable price? Check out the

[Eigen337]

This post has been removed in accordance with Community Policy

[SHayden]

Yes, I absolutely agree with that.

[meritmat]

Weakness Have to deal with a Liberal government that's going to call an election and win a majority 

[RagingBull3]

THANK YOU SHayden !!!!   For the Strengths  AND weakness analysis.    Yes, I agree, the Massive Writedowns (hopefully also write-ups) do make the Profit metric difficult/less reliable to use.   But, while the writedowns are "paper losses" they do represent something of significance.     The value of the assets are worth less in a less

[RagingBull3]

Another weakness is Atlantic Canada..... but that can become a Strength when the price of oil is right.    If CVE turns inward and only focuses on "Core Alberta oil".... and becomes less "diversified" and less intergrated (selling off Asian assets and gasoline retail stations).... I consider that a weakness. All just my opinion/view/thinking.... Thank-you for

[RagingBull3]

The Great Thing is, the company and the sector finally addressing one of the major weaknesses....DEBT..... and will not be a weakness no more hopefully in the near future. Offshore (Asia).... I consider that a Strength, not a weakness.... The weakness you talking about is Experience....We fix that by gaining More Experience in a HIGH PROFIT, HIGH CASH FLOW enviornment! All just my opinion/view

[RagingBull3]

A little hypocritical/Bias to lable Asian Offshore as a weekness and not include Atlantic also.  Asian raking in the Profits and Cash Flow... While Atlantic expansion with billions spent put on hold. It's a strenth to have "international" experience, reach....exspecially in HIGH PROFIT areas....not a weakness.  All just my opinion/view/thinking.

[SHayden]

In my write up, off shore/ China means Atlantic off shore and China. Look man, you need to get a life, spend some time off this board and go out an enjoy some things. All you do is come on here and annoy every single person, put words in peoples mouths and make an idiot of yourself. You come on here and spout off all this garbage then in the next post say you haven't even looked over the

[RagingBull3]

OK... so off shore/ China   means Atlantic off shore and China.....  You can't see how someone could interprete that as offshore China.    As China is Offshore !!! This is how I learn.....I "talk" it out.    Just like I "talked it out" on the Preferreds.... Dispite No one buying the Prefereds back in March 2020, nobody posting about

[RagingBull3]

Better yet....... Offshore (Atlantic and China) would be clearer.   Hey, not my fault, very reasonable IMHO to assume you only ment Offshore China. At any rate, it's a strength, not a weakness in my books.. All just my opinion/view/thinking.

[RagingBull3]

OK, so we disagree..... You think Atlantic and China offshore operations are a Weakness... I disagree somewhat....  I think China Offshore is a Strength, and Atlantic offshore at the moment a weakness but it could be a strength also  at right oil price. Sorry, for the mistake...But you can see how one can make it right?  The way you said it. All just my opinion/view/thinking

[SHayden]

Really, I just think you are a narcissist. "is a mental condition in which people have an inflated sense of their own importance, a deep need for excessive attention and admiration, troubled relationships, and a lack of empathy for others" You can say this is how you learn, but if you really wanted to learn, you would ask more questions before tossing out words like hypocrite, a

[RagingBull3]

LOL.... don't care one dam bit if you "admire" me or not... LOL.... If FACT, that's what most of all of you are... that's why you all "herd" together...  If I truly say what you claim, I wouldn't be going agaist the grain.... I would be just another sheep... Posting what everyone wants to hear....and have everyone agree with me, making me feel important

[Eigen337]

This post has been removed in accordance with Community Policy

[SHayden]

The existing cve oil sands assets are excellent I was referring the the hse oil sands assets as high cost. Your correct on the refining the two refineries are phillips 66 not cop my error.

[mrbb]

you are incorrect to say husky oilsand assets are high cost. In fact, they are quite low considering they aren't even large projects and haven't scaled up yet.  Many of husky sagd projects targeting ~10,000 bbl/day range, which husky can rinse and repeat with cookie cutter engineering, saving alot of engineering and facility fabrication cost.  Note that husky was in better

[autofocus111]

mrbb Yes HSE was doing well and would have been in great shape now if oil had not suffered through the price crash induced by the horrible duo of CV19 and OPEC/Russia battle for market. I am happy with the HSE+CVE combination though (but HSE+MEG might have been even better had it gone through). CVE has a hard choice to make in offshore. Natgas vs. oil. I hope they hold onto the cash-generating

[RagingBull3]

I don't think this is going to happen... Like what My Tin Foil hat said long ago.... It thinks CVE has some kind of "special" relationship out East.    You have to have something special to ship oil off the west coast, down through the panama canal, and back up the Canada's east Coast.!!! I've now said it several time.....CVE probably not selling Atlantic assets

[mrbb]

you can't use christina lake as representative for all oilsand operation.  CL is a premier reservoir, thick and clean paydirt, no bottom water, no top gascap.  Many many bitumen reservoirs aren't like that. CVE thinks that they have the downstream expertise.  They let go husky's downstream guru Mr Rinker after the taking over husky. CVE need to decide what to keep

[MaynardKeanes]

SHayden Very nice article very well written. My kudos to you for taking the time. Also I admire your volunteer work I'm trying to deal with the mental health of raging bull. If he only knew what information you just gave him, and I even told him to dig deep and look at some of the masters but he obviously knows more than all the Master investors in the world and he just talks about people

[RagingBull3]

As far as I'm concerned, I was FORCED to sell my Preferreds.. At that time I sold, I KNEW that they would continue UP.    I SAID IT.  Anyone can go and check my post on the HSE BB.   As Far as I'm concern, my TRUST has been BROKEN....  Seen Oil hitting $75+ and CVE barely moving higher.... Looks like I'm not alone..... This whole sector has lost the

[RagingBull3]

All just my opinion/view/thinking