Suncor Energy Inc T.SU

Who won the trade?

[Obscure1]

It appears that SU got a great price on the assets.  Well done.

Riddle me this:

Total are not stupid, so why did they sell at "give away pricing" if oil prices are expected to move higher over the long term?

A. Total wanted out of the oil sands for political reasons
B. Total decided that expensive land locked oil sands didn't meet their investment threshold
C. Total realized that SU had them by the short ones as 'SU was the ONLY buyer 
D. All of the above

The transaction reminds me of Suncor's decision to put its PetroCan assets up for sale.  The price that potential buyers were willing to pay obviously didn't satisfy SU's investment threshold so Suncor decided to hold. 

In the short run, I think the transaction favours Suncor as it supports its strategy to squeeze out free cash flow for as long as it can before extinction. 

If I had to pick between Total's management and Suncor's management, I would wager on Total so in the long run, I think Total was smart to get out, even at a give away price.  

Which team got the best of the trade?  Suncor got the best player in the deal, but time will tell how the draft picks and prospects work out.

[PabloLafortune]

Both parties win usually.  Also known as comparative advantage, opportunity cost. The very foundation of the free market.  Total can redeploy that capital and get better returns than they were getting from these oil sands assets. Suncor must figure they can get a better return by employing capital here rather than buying their own shares back. Plus apparently some very juicy tax losses

[mrmomo]

"It appears that SU got a great price on the assets.  Well done." Not really sure how you came to that conclusion as we don't know the actual breakdown of what was payed for the Fort Hill's interest or Surmont. We just have that hefty $6.1B price tag. So i completely disagree with you that SU got a GREAT price". The ones who did get a "GREAT" price, was

[Obscure1]

I can 100% assure you that SU got a great deal on a bulk asset as nobody else would touch the deal with a ten foot pole.    SU has either intentionally or unintentionally done such a terrible job at Fort Hills that both Teck and Total wanted out.  I very much doubt that there was any serious interest from any other parties as everyone involved knew the rules. If SU was

[mrbb]

TotalEnergies had announced last year it planned to exit the Canadian oilsands by spinning off TotalEnergies EP Canada, but said it decided to sell the operations instead after receiving several unsolicited offers including the one by Suncor. Suncor buys Canadian oilsands operations of France's TotalEnergies for $6.1B | CBC News

[mrbb]

C. is  wrong, hence D. is  wrong too Suncor buys Canadian oilsands operations of France's TotalEnergies for $6.1B | CBC News From cbc article TotalEnergies had announced last year it planned to exit the Canadian oilsands by spinning off TotalEnergies EP Canada, but said it decided to sell the operations instead after receiving several unsolicited offers including