Hi Glorieux, sure did hold on to some after a lttle profit taking along the way at $1.23. A very nice feeling to be on the winning end some times. What are your feeling of a potential buyout.
Debby
http://www.bloomberg.com/apps/news?p...
Nexen, Opti Canada May Be Targeted in Oil-Sands Deals (Update2)
April 3 (Bloomberg) -- Nexen Inc. and Opti Canada Inc. may be among Canadian oil companies targeted for takeovers as a price collapse triggers a rush by larger producers to amass holdings in the biggest crude deposits outside Saudi Arabia.
Potential suitors like Royal Dutch Shell Plc and Exxon Mobil Corp. can buy reserves cheaper than they can discover them after a global recession eroded energy demand and market values of smaller producers plummeted, said Sampat Prakash, who advises oil companies on acquisitions at Deloitte Consulting LLP.
For possible sellers, rising costs and the credit crunch make it difficult to fund oil-sands developments, some of which were made unviable by a $95 drop in crude prices from 2008’s record high. Producers as small as Opti, with a market value of about C$282 million ($229 million), can offer suitors stakes in large crude deposits free from threat of nationalization.
“Opti won’t be around by the end of the year,” said Will Lee, an analyst at CIBC World Markets Inc. in Calgary. “There’s a huge motivation for oil companies to get together now.”
Nexen and Opti, both based in Calgary, own the C$6.5 billion Long Lake tar-sands project. Nexen, valued at C$12.2 billion, also has the Buzzard field in the North Sea and a piece of Syncrude Canada Ltd., the world’s biggest oil-sands producer.
Opti’s New Chief
Opti has lost 92 percent of its market value in the past year, and former Scotia Waterous banker Christopher Slubicki will take over as chief executive officer this month. Opti jumped 23 percent to C$1.44 today on the Toronto Stock Exchange, and Nexen climbed 0.9 percent to C$23.48.
Some takeovers may involve Canadian producers combining with each other, as with Suncor Energy Inc.’s agreement to buy Petro-Canada for C$19.3 billion, announced March 23. The deal provides the scale and cost savings Suncor needs to shoulder the massive investments needed to compete with the likes of Shell in oil-sands development, CEO Rick George said at the time.
The thick crude permeating Canada’s oil sands is bitumen, a low-grade petroleum that is solid as hockey puck at 52 degrees Fahrenheit (11 Celsius). Producers use mechanical shovels or steam to extract bitumen, which is processed into synthetic crude before it can be refined into gasoline or diesel.
To do all of that profitably, new oil-sands developments will need oil prices of $80 a barrel, more than 50 percent above current levels, said Andy Byrne, an analyst at IHS Herold in Norwalk, Connecticut.
Shares Tumbled
Canadian energy companies dropped 32 percent in the past year as petroleum prices tumbled, steeper than the 25 percent decline for the largest U.S. oil producers. The high-cost tar sands account for 97 percent of the nation’s oil reserves.
Opti Chief Executive Officer Sid Dykstra, who will step down on April 28, declined to discuss whether a sale of the company is in the works. Nexen Chairman Francis Saville referred an inquiry to spokeswoman Carla Yuill, who declined to comment.
Target companies probably will be more amenable to takeover offers than they would have been during the 6 1/2-year bull run for oil that ended in mid-2008, said Richard Wyman, an analyst at Canaccord Capital Corp. in Calgary.
“In the current financial and commodity environment, a lot of producers no longer have access to capital,” Wyman said. “That’s one reason there are so many companies ripe to be
