/Posthaste: A big, bold bet on Canadian energy that didn’t pay off — and the mother of all crude IPOs

Posthaste: A big, bold bet on Canadian energy that didn’t pay off — and the mother of all crude IPOs

Good Morning!

It was a bold bet, but seems like it didn’t pay off. Canadian billionaire Seymour Schulich made a big bet on Pengrowth Energy Corp. that appears poised to end badly after the oil and gas company’s stock plunged Friday following the announcement of what amounts to a fire sale to Cona Resources, writes Barbara Shecter.

The billionaire has been accumulating shares in the company even as the stock price kept detioriating and the Canadian oilpatch’s downward spiral continued.

While the Pengrowth outcome may sting, making bold, confident bets has been one of Schulich’s trademarks over the years, Shecter writes. As he told the Financial Post during the interview in 2017, his investing motto is: “Often wrong, never in doubt.”

The world’s largest oil company, at least by oil production, is set to go public. Saudi Arabian Oil Company’s upstream production stands at 13 million barrels of oil equivalent per day, with 52-year reserve life, that no other oil company can match Aramco for scale.

“Moreover, with all-in-costs of US$7.60/bbl, Aramco is the lowest cost producer among global majors with a ROACE of 30%. Aramco has committed to a minimum of US$75bn dividend pay-out per year over the next 5 years,” according to Sanford C. Bernstein, an investment and research company.

“But there are also risks and Aramco will clearly not be for every investor. Recent attacks at Abqaiq have highlighted a potential vulnerability to geopolitical risk,” the firm said in a note to clients. “Fiscal stability and alignment with government cannot be assumed indefinitely. Most importantly, policies which seek to limit carbon may negatively impact long term oil demand and pricing.”

Saudi Arabia is aiming for a valuation of between $1.6 trillion and $1.8 trillion, according to people who spoke to Bloomberg. Goldman Sachs Group Inc. believes Aramco’s worth between $1.6 trillion and $2.3 trillion. Bank of America Corp., pegs it at $1.2 trillion.

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Here’s what you need to know this morning:


  • Premier Doug Ford and Transportation Minister Caroline Mulroney will be joined by John Tory, Mayor of the City of Toronto, to make a transit announcement in Etobicoke
  • National Coalition of Chiefs Energy and Natural Resource Summit in Calgary
  • The Commission of Inquiry into Money Laundering holds public meetings in Victoria
  • Notable Earnings: Bausch Health (the former Valeant Pharmaceuticals), Gibson Energy Inc., Parkland Fuel Corp. Cargojet, Crew Energy, Surge Energy, Nutrien

Encana Corp.’s name change and relocation isn’t likely to radically improve its performance on its own, even if it does attract more passive U.S. investment funds, financial analysts and fund managers say, writes Geoffrey Morgan.

“This is not the fix you are looking for,” Raymond James analyst Chris Cox wrote in a research note Friday, adding, “companies that are successfully executing strategically and conveying a compelling message to the Street typically don’t go through a rebranding effort.”



— Please send your news, comments and stories to [email protected]. — Yadullah Hussain @yad_Fpenergy

With files from The Canadian Press, Thomson Reuters and Bloomberg


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