Topic: How To Invest

The Successful Investor Hotline – Friday, December 7, 2018

Article Excerpt

CENOVUS ENERGY INC., $10.16, Toronto symbol CVE, acquired 100% of its main oil sands properties in Alberta—Christina Lake and Foster Creek—in May 2017. It did that through its purchase of the 50% stake held by its partner in the project, ConocoPhillips (New York symbol COP), for $17.7 billion in cash and stock. The stock fell 5% this week, partly because the Alberta government ordered oil producers in that province to cut their production (as a group) by 325,000 barrels a day, or 8.7%. Those cuts take effect at the start of 2019. The province took this action because a lack of pipeline capacity has forced producers to place their crude in storage. This growing glut has expanded the gap between the benchmark crude oil price in the U.S. and the price oil producers in Western Canada receive. In the third quarter of 2018, Cenovus’s price gap worsened to $22.25 a barrel from $9.94 a year earlier. Large producers like Cenovus will share in…

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