Canadian Natural’s (CNQ) Big Move!
Big news today in the Canadian Oil patch!
From the Financial Post
Quick thoughts on this as a CNQ/CNRL shareholder is that I am very happy. CNQ got a steal and all of a sudden they are a major, major producer. I have not completed a company analysis on CNQ or SU yet – two companies I am invested in – but I will do so soon. Both of these companies have excellent management – when you are in a cyclical industry like energy you want to invest in companies that can invest when others are licking their wounds. Both SU & CNQ made predatory moves during the oil downturn. CNQ might have even got a better deal than SU.
These two companies acted like hungry wolves during the downturn pacing around their weakened peers – that’s what you want in an energy company. The Super Majors really lost out, overall, during this downturn and have not appreciably increased their capacity. The Super Majors used to do this in past downturns and the fact they did not this time around was to CNQ & SU’s advantage and we won’t really see the true extent of this for a couple of more years. When this closes in mid 2017 it will be immediately accretive to CNQ earnings and I would give a 50/50 chance for another dividend increase at that time – even though CNQ just increased their dividend by 10%.
Both SU & CNQ are much better off now and the biggest risk by far is the fact that they are super concentrated in one resource area (albeit an enormous one) – the Athabasca Oil Sands.
We will see how this plays out – an exciting day.