RWS,
This is my own assessment, I could be wrong here.
I like the oil sands metric EV/recoverable bbls. SYN is the cheapest on this metric, that is until CLL goes an finds another several hundred million bbls on their property. I trust you appreciate the limitations of this method.
SYN.TO: C$0.65, mining & upgrader, first prodn 2010
CLL: $1.05, SAGD, upgrader?, first prodn 2006
UTS: $1.22, mining+SAGD & upgrader, first prodn 2009, pilot-2006
OPC: $1.67, SAGD+upgrader, first prodn 2006, upgrader 2007, pilot in operation now
WTO: $2.74, mining
BVI: $2.83, SAGD
SU: $3, mining+SAGD, upgrader
COS.UN: $4.41, mining
Note 1: CWPC.OB was eliminated, multi-billion bbl reserve claims unverifiable.
Note 2: Except SYN, the data is from RJ. SYN: $793m mkt cap, $579m EV, 895m est recoverable, 0.65.
They all satisfy the % of CAPEX requirement, but not the production requirement for CLL, UTS and OPC as they have no prodn.
One caveat with EV/recoverable is that some unexplored acreage might not be included. For example, WTO has just confirmed they have access to Shell Canada's 18,000 HA (approx 35,000 acres) of leases. I believe this is through the AOSP partnership, and OPC has three expansion opportunities which are not quantified yet.
The second caveat, is the above metric doesn't grade quality of resource. I understand that AOSP has some of the best oil sands, arguably better than CLL and SYN.
The third caveat is the above metric doesn't differentiate between mining and SAGD projects. Due to NG declines the AB gov't is promoting mining, again that favors AOSP and UTS.
Finally, some projects don't have an upgrader. The issue is that a project must have scale to justify an upgrader's CAPEX, but the benefit is then there is upgrading margins which can affect rates of return on a project. CLL's recent interest in refinery assets doesn't clearly solve the upgrader issue. UTS and OPC are planning upgraders.
Note that your #2 eliminates plays like CNQ where under half of prodn (232,000bpd in 2011 is <50%) and CAPEX (2006= $2.6/6.8bn, also <50%), and also HSE, PCZ and ECA which do not have the production or CAPEX to meet the cutoff. In addition, ECA is the largest oil sands leaseholder, but with current production of only 42,000bpd and CAPEX under 50% it not only doesn't pass that filter, but the leases are unquantifiable.
Regards, David |
