Q: What kind of oil company it is. It is true that Scrathcona is the 5th largest oil producer in Canada. The CEO was on the podcast In the Money saying that it is still a discount compare other oil companies, it is true. Also, what is the changes that it can purchase MEG energy. Thank you.
5i Research Answer:
The longer we wait for a new bid on MEG, the less likely it is to happen. Still, the market value of MEG is 7% higher than the current offer, so investors are not yet giving up on the possibility of something else happening here. We do not like the offer, but if SCR gets MEG at the current price it would certainly be good for SCR's growth profile. SCR has said it will pay a $10 special dividend if it does not get MEG. The combination of the two companies would make SCR the fifth largest producer. SCR is a solid company and management knows their stuff. It has shown good growth and made good asset purchases/sales. It does trade at a discount and it is only 9X earnings right now. Insiders are certainly committed and own 81% of the company.