Profit from Oil Sands Extraction

Article Excerpt

The Alberta government is studying proposals to raise royalties on oil and gas developments. That could slow the expansion of the oil sands. However, at current production rates, oil sands reserves should last 200 years, so it’s unlikely higher royalties will scare off developers. As well, further increases in oil prices may more than offset higher royalties. Finning and SNC-Lavalin should continue to profit from various oil sands projects. But only one is a buy right now. FINNING INTERNATIONAL INC. $32 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 179.6 million; Market cap: $5.7 billion; SI Rating: Above average) sells and rents Caterpillar brand tractors, bulldozers and trucks. The company continues to win new contracts from oil sands developers. It recently received a $100 million order for 19 trucks. Due to a huge backlog, it will take Finning about two years to deliver these vehicles. Most new contracts like this also cover replacement parts and maintenance services. That should…

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