[Eder]

Grats on the milestones. I also think diversification is over rated and comes at a high cost. I don't hold any oil companies.

 

[larry81]

Interesting times... My XEG holding is up almost 15% YTD.

Unrealized Cap Gain is nearing 2M ... on a 1M initial position.

 

[peterk]

I just come to this thread whenever I get nervous that I have too much oil. Then Larry makes me feel better.

I wish I had a crystal ball to know if AltaRed is being perpetually pessimistic or realistic! Agree that USA production surprises could be a big wildcard. Hard to know what to believe... I've heard everything from US production being the clearly most robust and capable of growth, or the opposite that they are running on fumes and it is a financing house of cards to keep existing wells producing just a little bit longer before they go bust (and not to be replaced with new drilling in significant numbers).

 

[KaeJS]

I just come to this thread whenever I get nervous that I have too much oil. Then Larry makes me feel better.

I come to this thread when I want to feel small.
But I am super happy for (and jealous) of the huge returns for some of the members here.

I do own quite a bit of oil, but not to the tune of some people on here. I think oil is here to stay. Not too concerned about green energy and all that. There simply is too much demand. Too many things require oil. I think the death of oil is something far, far into the future.

And as someone mentioned upthread... There have been talks of green energy before... Oil running out... Climate change... Etc.

The more things change, the more things stay the same.

With all that said - I added to my SU position today. There is no reason it shouldn't hit $40 at some point in the future. Probably in the next 6 months, I imagine.

 

[larry81]

Anyone have a short explaination regarding why SU didnt recover like the others majors ? What an underdog !

 

[doctrine]

Anyone have a short explaination regarding why SU didnt recover like the others majors ? What an underdog !

1. SU had operational issues with Fort Hills - it should have been up and running years ago. These are being overcome and it will help the stock.
2. Some of SU's oil sands assets are running relatively shorter on lifespan, like apparently some parts of Syncrude. No expert but general consensus is they may be more exposed to capital expenditures and/or acquisitions and/or regulatory risk for mine expansions.
3. CNQ has no similar issues, giving institutions a solid alternative to have exposure to the space and they are taking it.
4. SU cut their dividend and still have not restored it to 2019 levels despite a recent doubling (current 42 cents, was 46.5 cents pre-COVID). CNQ's dividend is up 38% from pre-COVID levels and was never cut with a ~20 year unbroken history of dividend increases.

I still see $50 for SU as a fair price today. And more like $60+ if oil hits $100 US. CNQ has stolen a lot of SU's investors. They are really hitting it out of the park. New ATHs almost every day this week, and well deserved. $700M to expand oil production by 60,000 boe/d - that is at a 65-70% discount to where the public mid/small caps are trading today.

 

[Covariance]

deleted

 

[larry81]

2M Unrealized Cap Gain as of today

This deserve a screenshot:

SU reporting today, how far will it go ?

 

[AltaRed]

I just come to this thread whenever I get nervous that I have too much oil. Then Larry makes me feel better.

I wish I had a crystal ball to know if AltaRed is being perpetually pessimistic or realistic! Agree that USA production surprises could be a big wildcard. Hard to know what to believe... I've heard everything from US production being the clearly most robust and capable of growth, or the opposite that they are running on fumes and it is a financing house of cards to keep existing wells producing just a little bit longer before they go bust (and not to be replaced with new drilling in significant numbers).

Commodities are exaggerations and extremes in both directions. I spent 25+ years in the business to know that when we think we know the answers, we are severely humbled in short order. The wild card this year (and into the next 2 years) is mostly around what demand does. Supply is considerably more well known on what it will do than demand, the wild cards of Libya and Iran notwithstanding. Even Iraq to some degree but less so. There should be enough supply growth in various basins to meet increasing demand simply because the industry cannot help itself. We see that in MD&A on 4Q21 results being released currently from various companies. That will put a lid on prices but where is the question.

 

[larry81]

XEG on fire

 

[james4beach]

XEG on fire

Yeah, it's nuts! Here are annualized returns for XEG

1 year: 110%
3 year: 14%
5 year: 2%
10 year: -1%
15 year: -1%

Huge difference between the short term and long term returns!

 

[m3s]

SU did a 2x in a few months. Just another 2x back to 2008 prices

 

[doctrine]

Yeah, it's nuts! Here are annualized returns for XEG

1 year: 110%
3 year: 14%
5 year: 2%
10 year: -1%
15 year: -1%

Huge difference between the short term and long term returns!

If oil goes back to all time highs of 15 years ago, which many analysts believe is fundamentally inevitable, those 15 year returns are going to look a lot better. Gasoline prices are already at record highs in many places, including Canada, and petroleum demand isn't even blinking.

 

[investor65]

2M Unrealized Cap Gain as of today

This deserve a screenshot:
View attachment 22758

SU reporting today, how far will it go ?

Incredible. I've always been skeptical of your millions of dollars in XEG profits Larry but I am convinced now. I believe your screenshot is from a TD account, correct? If we didn't have our accounts with TD, I still would have been skeptical. This is the internet after all lol.
You sir are a CMF legend.

Where do you see the oil price/energy stocks headed and could you share your reasons?
Personally, I agree with Eric Nuttall and I am of the opinion that ESG mandates are causing a shortage in petroleum and therefore a multi year bull market.

 

[investor65]

I personally like CNQ over XEG.
I like it over its peers as well: SU CVE IMO.
Bigger dividend, better management, better performance.
I'm surprised there isn't more interest in CNQ here.

 

[zinfit]

I personally like CNQ over XEG.
I like it over its peers as well: SU CVE IMO.
Bigger dividend, better management, better performance.
I'm surprised there isn't more interest in CNQ here.

CNQ is a much more of a upstream oil business and it has strong position in other non-oilsand production.. Suncor has a much bigger footprint with downstream operations. Same with CVE. CNQ I believe has done better in stock performance. I figure the real laggard in the three is CVE and if there is a catch up phase CVE will do very well.

 

[james4beach]

2M Unrealized Cap Gain as of today

What do you think, time to cash out $1 million? Don't worry about the taxes. You'd still have a $2 million position remaining, and will still make plenty if it doubles again.

This is a large amount for everyone including me but i am fortunate enough that, while significant, its not a major holding in my overall portfolio. I used the rationale that XEG "is part of my canadian equities allocation".

Is this still the case? Is a $3 million position still not a major holding for you? Maybe you're dealing with a $30 or $60 million total portfolio, I have no idea.

If this is more than 10% of your portfolio, I think it would be prudent to lighten it up. The money could go into something more diversified such as XIC (Canadian market) which by the way would still preserve some of those energy holdings, as there's quite a bit of energy in XIC.

Also consider the high fees you are paying to hold this position. The MER on XEG is 0.61% so you are paying Blackrock $18,000 a year in fees.

No matter how great this position looks, $18K in annual fees is a lot!

If you switched this into XIC, then fees drop to 0.06% or only $1,800 a year. This is a 90% reduction in fees.

 

[nobleea]

James, I don't get your laser focus on fees. It should be on total return.

 

[wayward__son]

I think it's just because fees are a known variable. Future returns are a speculation. All else equal cheaper fees = guaranteed better return. That being said, if you are saying 18k isn't really that much to have heartburn over on a $3m position I kind of agree with you.

Btw good Odd Lots podcast on oil prices the other day: This Is What Needs to Happen for Oil Prices to Finally Come Down

 

[james4beach]

James, I don't get your laser focus on fees. It should be on total return.

And a diversified portfolio has a higher probability of giving a good total return under the widest range of circumstances. A concentrated position of XEG is really just a speculation.

So in this situation, shifting to XIC both slashes fees 90% and gives a higher probability of success. Even higher probability of success in XBAL.