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Old 01-11-2019, 02:05 PM   #4961
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Shell is actively focused on moving away from oil-type assets towards gas/lng. Seems consistent with that strategy.
If thatís the case, why sell Foothills?
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Old 01-11-2019, 02:11 PM   #4962
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If thatís the case, why sell Foothills?
Because they want assets that they are actually allowed to sell on a global market?
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Old 01-11-2019, 02:12 PM   #4963
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nm [wrong thread]
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Old 01-11-2019, 08:45 PM   #4964
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Originally Posted by IliketoPuck View Post
Shell is actively focused on moving away from oil-type assets towards gas/lng. Seems consistent with that strategy.
Iíd be shocked if Shell has any upstream assets in Canada in 3-5 years.
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Old 01-11-2019, 11:47 PM   #4965
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NM - didn't realize they mostly dropped out or the Athabasca Oil Sands Project.

I find it strange they still call it "Shell Scotford" with such a small stake.
Shell still owns the refinery. The only sold the majority interest in the upgrader.
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Old 01-12-2019, 12:09 AM   #4966
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Iíd be shocked if Shell has any upstream assets in Canada in 3-5 years.
The lng plant will have to be fully integrated. So...they will have to have an upstream business to supply it. If anything, people are going to ask why they would build out their own production if they can buy it for cheaper. IE - instead of building out the 1-1.2 bcfs/d required to fill the gas plant, just buy a gas company instead. Peyto, Arc, Tourmaline, Encana would all come to mind.

Meanwhile, the Scotsford refinery is incredibly valuable, especially if they sold their fuel stations at the same time. CVE, CNQ, SU and IMO would all salivate over the opportunity to buy Scotsford.
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Old 01-12-2019, 08:09 AM   #4967
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The lng plant will have to be fully integrated. So...they will have to have an upstream business to supply it. If anything, people are going to ask why they would build out their own production if they can buy it for cheaper. IE - instead of building out the 1-1.2 bcfs/d required to fill the gas plant, just buy a gas company instead. Peyto, Arc, Tourmaline, Encana would all come to mind.

Meanwhile, the Scotsford refinery is incredibly valuable, especially if they sold their fuel stations at the same time. CVE, CNQ, SU and IMO would all salivate over the opportunity to buy Scotsford.
Will Shells LNG plant get built? I’m not convinced. Unless it’s already being built then i stand corrected. But it’s not like shell performs well on op costs for upstream as it is.

Refinery isn’t upstream.

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Old 01-14-2019, 11:55 AM   #4968
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Originally Posted by GullFoss View Post
The lng plant will have to be fully integrated. So...they will have to have an upstream business to supply it. If anything, people are going to ask why they would build out their own production if they can buy it for cheaper. IE - instead of building out the 1-1.2 bcfs/d required to fill the gas plant, just buy a gas company instead. Peyto, Arc, Tourmaline, Encana would all come to mind.

Meanwhile, the Scotsford refinery is incredibly valuable, especially if they sold their fuel stations at the same time. CVE, CNQ, SU and IMO would all salivate over the opportunity to buy Scotsford.
IMO and SU already have large refineries I Alberta, I donít see them buying Shellís refinery.
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Old 01-14-2019, 11:58 AM   #4969
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Originally Posted by Weitz;69454Hi20
Will Shells LNG plant get built? Iím not convinced.
Shell has already sanctioned LNG Canada - itís full steam ahead. I donít think they could easily back out of the project without major losses.
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Old 01-14-2019, 01:20 PM   #4970
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Shell has already sanctioned LNG Canada - itís full steam ahead. I donít think they could easily back out of the project without major losses.
They had also sanctioned Carmen Creek, began work on it, and then pulled the plug. Different reasons but they have done it before. They also threatened to walk from Sable Island after the Nova Scotia government wanted to re-open negotiations after the initial agreement was made.
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Old 01-17-2019, 10:37 AM   #4971
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Don't know if this effects, but felt like it should go here


https://twitter.com/statuses/1085952451038056448
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Old 01-17-2019, 10:39 AM   #4972
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More on this


https://globalnews.ca/news/4857370/h...tile-takeover/


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The Calgary-based oilsands producer cited production cuts for the oil industry mandated by the Alberta government and a lack of progress on Canadian oil export pipeline developments.
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Old 01-17-2019, 10:57 AM   #4973
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Those excuses are pretty much nonsense. They didn't want to sweeten the deal and the value of the buyout had dropped quite a bit from a shareholder perspective. In three months were they expecting the pipeline situation to suddenly improve?
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Old 01-17-2019, 11:08 AM   #4974
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I imagine MEG will be had on the cheap soon anyway.
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Old 01-17-2019, 11:28 AM   #4975
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Those excuses are pretty much nonsense. They didn't want to sweeten the deal and the value of the buyout had dropped quite a bit from a shareholder perspective. In three months were they expecting the pipeline situation to suddenly improve?
Which reflects the lower value of MEG due to market conditions. The offer was worth about $8/share to a MEG shareholder had they approved, and after they rejected the deal they are now trading at around $5.50/share.

What was a better deal for MEG shareholders?
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Old 01-17-2019, 11:31 AM   #4976
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I'm really happy to see Husky walk away. Alberta, MEG employees and Meg shareholders are better off alone.

Husky has weak assets, poor technical expertise in oil sands, lots of oil spills, is majority foreign owned, and doesn't have a strong governance structure. Their purchase of MEG would have been under fair long term value of the company, led to immediate layoffs, and would have eliminated a head office in Calgary who has a positive impact on the community.
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Old 01-17-2019, 11:32 AM   #4977
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I wasn't implying the deal was bad, just that Husky's reasons are pretty much nonsense. If they succeeded in buying the company, the curtailment would have been beneficial in the short term to their newly acquired asset.
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Old 01-17-2019, 11:41 AM   #4978
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The deal was bad though:

1) Meg shareholders would have had to take husky shares which are inferior because the float isn't liquid and because investors are second class relative to li ka shing

2) husky has a bad asset base. The continue value of the Asian assets is based on li ka shing's relationships with China. The thermal Lloyd assets are valuable in part because Saskatchewan has less stringent enviornmental standards, the value of refining is overvalued, sunrise and Tucker aren't good assets, conventional is garbage. The reserve life of the company is weak relative to peers. MEGs Christina lake would have been the best asset in the deal and this deal would have diluted it. If Husky wanted the asset, they should have offered 100% cash.

3) Husjy has a strong track record of weak operational execution such as oil spills, sunrise and Tucker.

4) corporate governance structure is weak - examples include midstream deal, dividend policy, asset sale processes

I sold my Meg shares on the announcement of the initial deal. Will probably buy them back now.
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Old 01-17-2019, 11:50 AM   #4979
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One of my co-workers has a brother who works at Shell in one of their foothills gas plants. They have been told the plant and assets are up for sale. I know we heard a rumor to this effect last week and I don't see anything publicly announced yet. But apparently employees have been informed.
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Old 01-17-2019, 11:50 AM   #4980
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Great article on Canadian O&G in the post today:

https://business.financialpost.com/o...Lh3rnpNppbsVQw
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