10.29
Likely Front Runner For Stake In Syncrude
Despite in-line production of 115 MBbls/d, CFPU of $0.61 was below consensus of $0.66.
COS had a strong quarter on solid volumes and lower costs of $28/Bbl (versus our consensus of $33/Bbl).
The variance was due to higher royalties on stronger bitumen prices.
With tweaks to royalties, Quarterly DPU was increased to $0.35 (from $0.25).
We see COS as the front runner for Conoco’s 9% stake in Syncrude. Utilizing LT oil of
US$85/Bbl & $0.95 FX, we estimate the potential acquisition at $3.5B-$4B.
2010 guidance calls for volumes to average 110-120 MBbls/d on costs of
$35/Bbl and capital of $541MM.
We continue to believe COS offers low-risk year-over-year production growth at
an attractive valuation and should perform well at
current commodity prices.
No Comment.
Add Your Comment