Q: I remember hearing that CNQ breaks even at $50 dollar oil. Question is, is this true, and does that include dividends. Also, I would like to know about CVE, Whitecap. I am wondering about US oil companies in the basins of Texas area and Montana area. What oil price do they need to keep operating (cost of operations).
Thank You again for your excellent services.
Earl
Thank You again for your excellent services.
Earl
5i Research Answer:
CNQ operating costs are in the $21 per barrel range so it has some cushion. But note that at a $50/barrel price most producers would curtail some production, so the cushion here should not be viewed as $29/barrel. CNQ raised its dividend in March and we would not see it as being in jeopardy. CVE is very cheap and we think it is fairly attractive for investors with patience. WCP is merging with VRN, and we think the combined company should be poised for good growth and also (likely) it could get a better valuation through size and cost synergy benefits. The latter question is a bit too difficult, as there are dozens of companies with differing cost structures.