Hey Neil, Cenovus just came out with some really strong news today – and I want to hear more from you on why they are taking this stance. Really wish they had done this last year, when oil prices were much weaker. But I also know how unpredictable oil prices can be, so I wanted to show you a piece from Wall Street Journal about what they are seeing, and why they made this announcement today. This has to do with excess U.S. shale oil. Let’s bring in Vivek Athreya, you’ve got a lot of experience and energy, do you have any thoughts on it?
VAIYARA: Yeah, one of the great things about small companies, Neil, is they can respond when there’s a sudden movement in the market, and in some of the main stories, and Cenovus is now starting to act like that in the Canadian market, with this announcement. If there is growth in oil, then they have been a pretty good survivor. They’ve been consistent in what they have been doing. You remember this company when they bought Conoco-Phillips assets, they said they’d be integrating that company and then have two things happen, one, one of the biggest oil companies in the world selling assets to an upstart company, and two, I think that integrated oil companies sold off the best parts of their businesses, and Cenovus has been very successful at bringing in more cash from these sales.
NAVARRO: What do you think about that, Vivek? Is this Cenovus is being opportunistic or is it a big payoff to investors on their stock, especially with these higher oil prices?
VAIYARA: Yes, it’s a big payoff. This is a great time for the oilsands, which have assets that can produce oil for a long time. The U.S. shale oil, especially tight oil and shale, is short-term because they can produce oil very quickly. But the oilsands have long-term assets. They can produce oils now, then grow those assets in terms of the future, not only because of their own growth, but because of a lot of international interest in Canada oil. They are a great deal for these companies, and I think there are going to be many investors who are quite happy, and you are getting another good quarter of earnings for Cenovus.
NAVARRO: Yeah, well, if you’re getting another good quarter of earnings, it may be worth it. We’ve got that chart to show you. When we look at oil prices over the last three years, we see the great buy dips, we’ve seen the great value dips, and I’m really glad we’ve got that chart. Here’s one of the best buy dips, so maybe they have had a less bad buying dip, but I’m sure we’ll talk about that in a minute, a company like that, Cenovus, and how they’ve done so well. Congratulations, Vivek. Thank you for joining us.
VAIYARA: Thank you, Neil. It’s good to be here.
NAVARRO: Vivek, thank you.
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