Quote:
Originally Posted by Harju
There 2020 Q1 says 1.1 billion of cash and 5.0 billion of liquidity. Liquidity just means they have credit facilities in place to borrow 5 billion. The FY 2019 BS/cash flow statement shows 139 mil of cash and equivalents with the notes disclosing 4.7 million of credit facilities available for use.
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It's not really about cash and liquidity when it comes down to their willingness to do an acquisition. It is really about their overall debt level and leverage. Most estimates today would have CNRL's leverage around 3 - 4x in 2021, which is quite a bit higher than historical and well above their target of 1.5x. That means that any major acquisition would likely have to deleverage the business pro-forma, which would be a challenge to do in this environment since most of the other oil sands companies have similar or higher leverage.
I think we will have to see oil prices in the $50/bbl range for a period before there will be major M&A in the oil sands. There is just too much debt being carried by every player.