Warren Buffett is nothing if not a disciplined investor, and he explains that his visit to the Alberta region was for information gathering only, something that he will file away and may use a few years from now. As he explains near the end of the interview, he's now gained knowledge on cost aspects of the business, but the biggest wildcard remains the longer term price of oil.
Note that he already holds $1.5 billion worth of ConocoPhillips stock, which claims to have the "largest position in Canadian oil sands".
It's mentioned that they visited CNQ's new project as well as an unnamed SAGD (steam assisted gravity drainage) site. Since COP has a joint venture with Encana (ECA), and since Encana has SAGD sites in production, my guess would be that they visited an Encana site.
CNBC: Buffett/Gates Energy Tour.
Link:
http://www.cnbc.com/id/15840232?video=829077555
http://www.conocophillips.com/NR/rdonlyres/31989B77-23F9-40A7-BB42-3D56B4A01420/0/UBSAustinMay22wnotesupdatedfor1Q08BPReseg.pdf
Showing posts with label Canadian oil sands. Show all posts
Showing posts with label Canadian oil sands. Show all posts
Saturday, August 23, 2008
Thursday, August 21, 2008
Bill and Warren's Excellent Alberta Adventure.
It's been a long time since I've done an Canadian oil sands post. These stocks have been clobbered along with everything else, but these are huge resources that will be producing for a long time. These projects aren't without issues, as it's carbon intensive, needs natural gas input as well as a large amount of water, and makes apparently one hell of a mess, so they need to get the environmental stuff done right.
The classic oil sands stock is Suncor, SU, but Bill Gates and Warren Buffett took a tour of the latest oil sands project, the Horizon project by Canadian Natural Resources, CNQ.
Other oil sands names include:
Canadian Oil Sands COSWF
Imperial Oil IMO
Nexen NXY
Encana ECA
ConocoPhillips COP
Husky HUSKF
ExxonMobil XOM
Shell RDSA
Devon DVN
Marathon MRO
Opti-Canada OPCDF
Because of the size and longevity of these resources, combined with the long term questions about reliable oil supply and peak oil, I have seen Suncor referred to as the "Microsoft of oil", with potentially 50 years of earnings growth ahead of it, as well as comments about oil sands stocks being "stocks to pass on to your grandchildren".
I'm looking forward to see what Warren Buffett has to say in his CNBC interview on Friday.
Financial Post: Buffett and Gates tour Alberta oil sands.
CNBC: Oilsands Stock Soars After Warren Buffett and Bill Gates Visit Alberta Project.
The classic oil sands stock is Suncor, SU, but Bill Gates and Warren Buffett took a tour of the latest oil sands project, the Horizon project by Canadian Natural Resources, CNQ.
Other oil sands names include:
Canadian Oil Sands COSWF
Imperial Oil IMO
Nexen NXY
Encana ECA
ConocoPhillips COP
Husky HUSKF
ExxonMobil XOM
Shell RDSA
Devon DVN
Marathon MRO
Opti-Canada OPCDF
Because of the size and longevity of these resources, combined with the long term questions about reliable oil supply and peak oil, I have seen Suncor referred to as the "Microsoft of oil", with potentially 50 years of earnings growth ahead of it, as well as comments about oil sands stocks being "stocks to pass on to your grandchildren".
I'm looking forward to see what Warren Buffett has to say in his CNBC interview on Friday.
Financial Post: Buffett and Gates tour Alberta oil sands.
CNBC: Oilsands Stock Soars After Warren Buffett and Bill Gates Visit Alberta Project.
Wednesday, April 16, 2008
Be Bullish.
WSJ: Crude, Heating Oil, Gas All End at Record Highs.
Quotes:
Buyers also found inspiration in global demand. China imported 1.66 million tons of diesel from January through March, the General Administration of Customs reported Tuesday, a sevenfold increase from the 230,000 tons imported in the same period last year.
Yahoo Tech Ticker: High Oil Prices? You Ain't Seen Nothing Yet.
Yahoo Tech Ticker: 6 Ways to Profit from 'Peak Oil'.
Quotes:
Earlier, Charles Maxwell, senior energy analyst at Weeden & Co., made the case that "peak oil" theory is real and inevitable, and that $300 oil is coming in the next decade. While a frightening prospect with major societal implications, it's also one with significant potential for profit.
When investing in energy for the long run, it's best to avoid the major oil companies like Exxon Mobil, Chevron, and ConocoPhillips, Maxwell says. There's a reason these firms are cutting back on exploration even as oil prices and demand are rising: Facing both geological and geopolitical obstacles, they cannot find reserves big enough to move the production needle.
Instead, Maxwell recommends a basket of companies with "long-lived reserves," including Brazil's Petrobras and Canadian tar sands plays such as Encana and Canadian Natural Resources. Unlike the majors, these firms will be able to maintain and even increase production into the next decade, and thus able to take advantage of the expected sharp rise in oil prices.
------------------------------------------
Technically, he recommends PBR, LUKOY, SU, ECA, CNQ, NXY in the above video.
Quotes:
Buyers also found inspiration in global demand. China imported 1.66 million tons of diesel from January through March, the General Administration of Customs reported Tuesday, a sevenfold increase from the 230,000 tons imported in the same period last year.
Yahoo Tech Ticker: High Oil Prices? You Ain't Seen Nothing Yet.
Yahoo Tech Ticker: 6 Ways to Profit from 'Peak Oil'.
Quotes:
Earlier, Charles Maxwell, senior energy analyst at Weeden & Co., made the case that "peak oil" theory is real and inevitable, and that $300 oil is coming in the next decade. While a frightening prospect with major societal implications, it's also one with significant potential for profit.
When investing in energy for the long run, it's best to avoid the major oil companies like Exxon Mobil, Chevron, and ConocoPhillips, Maxwell says. There's a reason these firms are cutting back on exploration even as oil prices and demand are rising: Facing both geological and geopolitical obstacles, they cannot find reserves big enough to move the production needle.
Instead, Maxwell recommends a basket of companies with "long-lived reserves," including Brazil's Petrobras and Canadian tar sands plays such as Encana and Canadian Natural Resources. Unlike the majors, these firms will be able to maintain and even increase production into the next decade, and thus able to take advantage of the expected sharp rise in oil prices.
------------------------------------------
Technically, he recommends PBR, LUKOY, SU, ECA, CNQ, NXY in the above video.
Wednesday, October 03, 2007
Tightening the screw.
CNNMoney: America's top oil suppliers tightening taps on exports: CIBC World Markets.
Quotes:
Six of the largest oil suppliers to the US are poised to cut their global exports by nearly 2 million barrels a day by 2012, ramping up pressure on supply and price, and intensifying the focus on one of the last great deposits open to private investment: Canada's oil sands.
The projected cut, amounting to seven percent by Mexico, Saudi Arabia, Venezuela, Nigeria, Algeria and Russia, reflects the growing struggle in these countries to grow production and manage their own soaring rates of oil consumption, says Jeff Rubin, chief market strategist and chief economist, at CIBC World Markets, who will discuss his latest findings at the firm's Industrials Conference in New York City.
The trend of oil producing countries becoming major oil consumers extends beyond the top US suppliers, says Mr. Rubin. When similar conditions are factored in among the other major oil producers including OPEC, the supply crunch deepens to 3 million barrels a day, or an eight percent cut in global exports. "Soaring domestic demand is cannibalizing export capacity, and will increasingly do so as productions plateaus or declines in many of these countries."
Last year, OPEC members, along with independent producers Russia and Mexico, consumed over 12 million barrels of oil a day, roughly 60 percent more than China and slightly more than all of Western Europe says Mr. Rubin. As a group, they now are second only to the U.S. in terms of market size. Much of the demand in these countries is driven by heavily subsidized prices that keep a barrel of oil down to a cost of between US$10 and US$20. "The cheap supply is fuelling some of the fastest growth in domestic demand anywhere in the world," says Mr. Rubin.
Quotes:
Six of the largest oil suppliers to the US are poised to cut their global exports by nearly 2 million barrels a day by 2012, ramping up pressure on supply and price, and intensifying the focus on one of the last great deposits open to private investment: Canada's oil sands.
The projected cut, amounting to seven percent by Mexico, Saudi Arabia, Venezuela, Nigeria, Algeria and Russia, reflects the growing struggle in these countries to grow production and manage their own soaring rates of oil consumption, says Jeff Rubin, chief market strategist and chief economist, at CIBC World Markets, who will discuss his latest findings at the firm's Industrials Conference in New York City.
The trend of oil producing countries becoming major oil consumers extends beyond the top US suppliers, says Mr. Rubin. When similar conditions are factored in among the other major oil producers including OPEC, the supply crunch deepens to 3 million barrels a day, or an eight percent cut in global exports. "Soaring domestic demand is cannibalizing export capacity, and will increasingly do so as productions plateaus or declines in many of these countries."
Last year, OPEC members, along with independent producers Russia and Mexico, consumed over 12 million barrels of oil a day, roughly 60 percent more than China and slightly more than all of Western Europe says Mr. Rubin. As a group, they now are second only to the U.S. in terms of market size. Much of the demand in these countries is driven by heavily subsidized prices that keep a barrel of oil down to a cost of between US$10 and US$20. "The cheap supply is fuelling some of the fastest growth in domestic demand anywhere in the world," says Mr. Rubin.
Monday, February 12, 2007
I'm with Art.
Art Smith, the head of John S. Herold, an energy research firm, was interviewed in Barron's this weekend, and it turns out he agrees with me on everything. [Okay, okay, so I agree with him on everything, calm down.] If you're into investing in the energy sector, I recommend buying a copy and reading the entire interview, but the highlights have been summarized in a post on Seeking Alpha.
Seeking Alpha Energy Stocks: Barron's: Oil Guru Art Smith's Picks for 2007.
My own summary:
- Big oil is struggling with exploration for various reasons, they will eventually have to step up to the plate to increase their reserves, most likely by takeovers of mid-size companies.
- Buy companies with large North American natural gas reserves. They are cheap and the natural gas situation in North America appears headed for a squeeze.
- Buy Canadian oil sands companies for their long term assets and relative lack of political risk.
In terms of specific stock recommendations, the Seeking Alpha post highlights Mr. Smith's stock picks. My favorites of that list are NXY, CNQ, APC, CHK, SU. Mr. Smith also highlights NXY and SU as likely to be taken over. NXY I think is a goner, highly likely to be acquired at some point, but I am skeptical of the idea that SU will be bought, due mostly to the fact that the price would be too high for any acquirer except somebody who desperately needs oil sands assets. (Think BP.) I think APC is also a good takeover candidate, once it finishes tidying up after it's recent purchases of Kerr-Mcgee and Western Gas Resources.
Seeking Alpha Energy Stocks: Barron's: Oil Guru Art Smith's Picks for 2007.
My own summary:
- Big oil is struggling with exploration for various reasons, they will eventually have to step up to the plate to increase their reserves, most likely by takeovers of mid-size companies.
- Buy companies with large North American natural gas reserves. They are cheap and the natural gas situation in North America appears headed for a squeeze.
- Buy Canadian oil sands companies for their long term assets and relative lack of political risk.
In terms of specific stock recommendations, the Seeking Alpha post highlights Mr. Smith's stock picks. My favorites of that list are NXY, CNQ, APC, CHK, SU. Mr. Smith also highlights NXY and SU as likely to be taken over. NXY I think is a goner, highly likely to be acquired at some point, but I am skeptical of the idea that SU will be bought, due mostly to the fact that the price would be too high for any acquirer except somebody who desperately needs oil sands assets. (Think BP.) I think APC is also a good takeover candidate, once it finishes tidying up after it's recent purchases of Kerr-Mcgee and Western Gas Resources.
Thursday, August 31, 2006
Today, Bloomberg. Tomorrow, the world.
Bloomberg with a very long article on the Peak Oil debate that hits all the highlights, and features all our favorite characters: Boone Pickens, Charles Maxwell, Matthew Simmons, Peter Thiel, Canadian Oil Sands, et al.
Bloomberg: Peak Oil Forecasters Win Converts on Wall Street to $200 Crude.
Bloomberg: Peak Oil Forecasters Win Converts on Wall Street to $200 Crude.
Monday, February 21, 2005
Blame Canada.
Let's not kid one another - converting oil sands/tar sands or oil shale to oil is something nobody wants to do.
Not only does it require a bigger upfront investment than land based oil drilling, it also pollutes more, creates more global warming gases, is less efficient (you have to burn natural gas in the process, or use some form of energy), is more disfiguring to the environment and in the end produces the least desirable type of oil - heavy, sour crude.
But we're going to be doing it and oil companies are investing billions in it, because the peak oil problem is real, and corporations are finally buying in.
There are 3 areas that have huge deposits - Canada, Venezuela, and the US. The US form is oil shale, which is actually even less desirable than tar sands/oil sands. But the US government and the US Navy deems it to be strategic enough that they keep an eye on it anyway. [I believe the US Navy is the world's largest single energy user.]
Companies that have some exposure to this business, with their US ticker symbols:
Suncor - SU - Canada
Canadian Oil Sands - COSWF - Canada
Encana - ECA - Canada
Canadian Natural Resources - CNQ - Canada
Imperial Oil - IMO -Canada - ExxonMobil surrogate/possible takeover candidate.
Shell Canada - SC and RD - Shell subsidiary.
Nexen - NXY - Canada E&P.
Husky Oil - sub. of Hutchinson Whampoa - HUWHF
ConocoPhilips - COP - Canada and Venezuela
Statoil - STO - Venezuela
PetroCanada - PCZ - Canada
Murphy - MUR - Canada
[Some of the above companies are involved in Syncrude, as these undertakings are so expensive, they needed to band together.]
There are probably a couple I forgot, but that covers the majors. Further reading on this topic here, here, investment ideas, and a little here. (Post original publish - new link here.)
[Disclaimer: I own ECA and CNQ right now, have dabbled in a few of the others and probably will again.]
Not only does it require a bigger upfront investment than land based oil drilling, it also pollutes more, creates more global warming gases, is less efficient (you have to burn natural gas in the process, or use some form of energy), is more disfiguring to the environment and in the end produces the least desirable type of oil - heavy, sour crude.
But we're going to be doing it and oil companies are investing billions in it, because the peak oil problem is real, and corporations are finally buying in.
There are 3 areas that have huge deposits - Canada, Venezuela, and the US. The US form is oil shale, which is actually even less desirable than tar sands/oil sands. But the US government and the US Navy deems it to be strategic enough that they keep an eye on it anyway. [I believe the US Navy is the world's largest single energy user.]
Companies that have some exposure to this business, with their US ticker symbols:
Suncor - SU - Canada
Canadian Oil Sands - COSWF - Canada
Encana - ECA - Canada
Canadian Natural Resources - CNQ - Canada
Imperial Oil - IMO -Canada - ExxonMobil surrogate/possible takeover candidate.
Shell Canada - SC and RD - Shell subsidiary.
Nexen - NXY - Canada E&P.
Husky Oil - sub. of Hutchinson Whampoa - HUWHF
ConocoPhilips - COP - Canada and Venezuela
Statoil - STO - Venezuela
PetroCanada - PCZ - Canada
Murphy - MUR - Canada
[Some of the above companies are involved in Syncrude, as these undertakings are so expensive, they needed to band together.]
There are probably a couple I forgot, but that covers the majors. Further reading on this topic here, here, investment ideas, and a little here. (Post original publish - new link here.)
[Disclaimer: I own ECA and CNQ right now, have dabbled in a few of the others and probably will again.]
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