RE:RE:Tight oil ain't what it used to be?Migraine...Great post as usual
I would add one other consideration to this.
Many of the companies hold significant land rights and an inventory of drilling sites greater than their capability and this has been the case for many years. In the past when oil prices were low, these companies often drilled in their most promising sites (highgrading to borrow a term from the mining industry) as opposed to a balance of drilling sites to keep production the same for a longer period of time.
The end result of this is evident in the chart you presented showing declining productivity from wells. I suspect that this trend will continue for the foreseable future.
In the case of SU, the challenge is somewhat different in the sense that there is abundant resources in the oil sands and the costs are relatively constant (ie they don't have to rely so much on highly variable well characteriztics) but they still require regulatory approval to extend the leases at the Base Plant in order to maintain production sometime between now and 2030. They have already begun this process but in the current political environment, and, gawd only knows what it will be like in a few years, it is not a slam dunk that they will get the necessary lease approvals.
The company is trying to mitigate this risk through its ESG initiatives. Will that be enough? Stay tuned - who knows. Given the discordance between its FCF and its SP there are a lot of people out there that are betting that they will have trouble getting the lease approvals and are putting their money elsewhere. If they are wrong and SU gets the necessary approvals, one could easily see a double in the SP over the next few years at current oil prices.