Topic: How To Invest

The Successful Investor Hotline – Friday, June 8, 2018

Article Excerpt

CENOVUS ENERGY INC., $13.00, Toronto symbol CVE, acquired 100% of its main oil sands properties in Alberta—Christina Lake and Foster Creek—in early 2017. It did so through the purchase of the 50% stake held by its partner in the project, ConocoPhillips. Cenovus also purchased ConocoPhillips’ conventional oil fields in Alberta and B.C. In all, the company paid $17.7 billion for those properties, consisting of $14.1 billion in cash plus 208 million Cenovus common shares. Those shares are worth roughly $2.7 billion, or 17% of Cenovus’s market cap (the total value of all outstanding shares). ConocoPhillips is now planning to sell that Cenovus stake, probably to institutional investors. The sale will not increase the total number of shares outstanding. However, it would increase the number of shares available for trading. That could weigh on the stock price. Meantime, Cenovus continues to benefit from rising oil prices—the stock has gained 23% since the start of 2018. Ottawa’s plan to buy the existing Trans Mountain pipeline,…

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