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  • frozenengineer frozenengineer Mar 1, 2005 11:31 AM Flag

    O/T UTS/PCA JV - Thanks Frozen


    These boards can be great for sharing. It is unfortunate that their nature is to ultimately provide a soap box for the lowest common denominator. I admired your patience over on the CWEI board and was amazed at how long you lasted before you pulled the plug. It was obvious to me you gave much more than you received during your tenure. I am happy you got a little bit back with UTS.

    I think todays announcement does a world of good for UTS. Recall that one of my biggest concerns was the scale (50,000 bpd) proposed in the original plan. Today's announcement included mention that going forward they will now be looking at a 100,000 bpd case. With Petro-Canada they get a partner with refining experience and a whole lot of credibility. Access to financial markets (debt or equity) surely has improved. UTS has become a lot less speculative today. I think a lot can be learned from looking at Western Oilsands in terms of what the future might hold.


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    • why not buy Petro-Canada over UTS?

      This is the last major integrated oil not being hyped or participating in the same way as some of the others. (they are #2 in oil sands in the Alberta)

      just curious, and for the record I am long Petro-Canada.

      • 3 Replies to andevenabs
      • OK, scratch what I said, I didn't realize that UTS was a development stage company without any revenues.

        You guys sure like to gamble, I've seen nothing but "casino" style stocks being mentioned on this board. Is a widely known characteristic of most oil investors?

      • #2 in the oil sands? Please explain? I didn't realize they had such a large position.

      • andevenabs,

        If you go back to February 4th you will see my rational for entering UTS. Strongsurvivor asked me about the company to kick off the whole process - you will see I considered it a speculative play, but that I saw a couple of reasonable scenarios, including the one that transpired yesterday, which could really drive the stock price - I sold a portion of my COS.un (which had doubled since I entered last April) and put it into UTS. I stated at the time it was money I could afford to lose.

        UTS has no revenues as you say. What made it attractive is its reserves - we were, at the time, paying ~$0.15 per bbl of bitumen in place. ECA is also a play on reserves and you will find that the typical ECA investor has a greater appreciation for reserves and the NPV these represent.

        I have posted some thoughts on Petro-Canada in the past month or so in response to Bigenergybull so I will not go into detail here. They missed a golden opportunity a couple years ago when they pulled the plug on their major expansion at the Edmonton refinery and instead chose to enter a long term relationship (10 year) that saw SU install the bulk of the delayed coking capacity. They have, as of late made a series of great strategic moves including Buzzard, the Prima acquisition, and most recently the UTS announcement. To me it seems they are starting to look a lot like ECA did a couple of years ago. They have a series of good projects in the pipeline that will start to pay divedends a couple of years down the road. As cash flow is diverted in support of these projects their trailing metrics will lag the competition for the next couple of years. I would love to think that the average investor was smart enough to recognize the short term pain for the long term gain. I know that having held ECA for several years through the "short term pain" phase ECA was underperformer.

        I hope for your sake that the average investor today is smarter than he/she was a couple of years ago - you should be rewarded for holding PCZ over the short term then. I would be prepared to be patient however just in case they are not

    • Frozen

      I listerned to both CC's toady and also did some more digging into PCZ (

      I believe this is what PCZ also needed to give them the extra advantage of long life production.

      The north sea and eastern Canada will give them great CF for a few years, but this provides an base after that, not just for the sands, but also for the upgrading.

      I also like the acquisition of the rockies PCZ made last year. This is two good moves that have come very quickly to make them more attractive.

      The three companies presentations I have listerned to today (SU, PCZ, and CNQ) all have an ROCE of their new sands projects at 15% @ $about $29 wti.

      I feel badly that CWEI has gone the way of VPI, and I now post on Kevin's and Dan's private board. I have gaind a great deal of information from these boards, and I too am greatful.

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