Canadian Oil Sands COS (formerly COS.UN)

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Fredrik
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Canadian Oil Sands (Symbol-COS)(formerly COS.UN)

Post by Fredrik »

Interesting interview with Marcel Coutu. I think I should probably buy some of this COS.UN in my RRSP if an opportune moment arises...

StockHouse Interview: CEO of Canadian Oil Sands Trust
Friday, April 29, 2005
By Jeff Berwick

Unknown to many, the world’s largest reserve of crude oil lies in Canada. In hundreds of square miles of black muck in Northern Alberta is the Canadian oil sands, and it holds more than 300 billion barrels of crude oil. That is more than in all of Saudi Arabia, and more than in Iraq, Iran and Libya combined.

Until recently, extracting the oil from the sands has been too costly to be attractive. But with oil now at much higher levels, this whole area may make Canada into the new Saudi Arabia. Combined with Canada’s mineral resources, Canada may well become the world’s richest nation in the coming decades...

We had the opportunity to speak with the CEO of Canadian Oil Sands Trust (TSX: COS.UN), Marcel Coutu...

SH: Distributions in 2004 totaled $2.00 per trust unit... Can you give guidance to future distributions?

MC: I can’t offer any specific guidance on distributions. We’ve held the line on distributions for the past 3 1⁄2 years, or roughly since we started to redirect much of our cash flow to our Stage 3 expansion. With our capital expenditure requirements coming off later this year, our first priority is reducing our debt to about $1.2 billion. We also recognize that our unit holders have been patient while we’ve grown the business, so we want to reward them with increased distributions. That can happen, gradually, while we reduce debt, as long as our business environment remains robust.

SH: The Bank of Montreal’s analyst, Don Coxe, recently stated that he believes Hubbert’s Peak has arrived in Saudi Arabia. What is your personal opinion of where we are currently at in terms of global oil production?

MC: I expect we’ll see global production peak within five years. Major new investment may help stabilize prices beyond that, but production declines will prevail. The key questions are: What will be the rate of decline? And, how will the demand side respond in this period?

SH: How concerned is Canadian Oil Sands Trust that it won’t go over the 50% foreign ownership limit and do you think the government will remove the restrictions?

MC: With the additional attention the oil sands industry is receiving, both in the U.S. and abroad, foreign ownership restrictions is obviously on our radar. We regularly monitor our ownership levels, which have fluctuated between 39% and 45% over the past year. And we will force unit holder registration at 49% and likely keep foreign ownership at 50% until we can obtain greater clarity from the government...

SH: What is your hedging strategy?

MC: Canadian Oil Sands hedged up to 50% of its crude oil revenue as part of its financing plan to fund its share of the Stage 3 expansion. With the expansion now nearing completion, we no longer need to hedge our cash flow and prefer to provide unit holders an investment vehicle that gives them full exposure to oil prices.

Complete article is here:
http://www.stockhouse.ca/shfn/editorial.asp?edtID=17654
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Post by unicef01 »

Fredrik wrote:Interesting interview with Marcel Coutu.  I think I should probably buy some of this COS.UN in my RRSP if an opportune moment arises...

Unknown to many, the world’s largest reserve of crude oil lies in Canada. In hundreds of square miles of black muck in Northern Alberta is the Canadian oil sands, and it holds more than 300 billion barrels of crude oil. That is more than in all of Saudi Arabia, and more than in Iraq, Iran and Libya combined.

Complete article is here:
http://www.stockhouse.ca/shfn/editorial.asp?edtID=17654
I like the oil sands and other Cdn energy investment opportunities as part of a diversified portfolio... :P

But will the oil sands make Canada (or Albertans) the "next saudi arabia" ? I've heard it won't do much to tame growing world demands for petroleum...and at the right price, alternative sources of energy can and will become viable options

In any case, it's good that we didn't nuke the place !!

http://www.innovationalberta.com/article.php?articleid=90
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Post by Dennis »

You may have missed the boat (I hope not, I still hold quite a few).

In June/03 I purchased OST.UN to our portfolio, a split trust capital unit based on COS.UN I believe. Price paid was $19.93. Since then we have seen an amazing run up to $71-72 a week or two ago. We took some profits but I am planning on holding the majority while occasionally continuing to take some profits.
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Post by Dennis »

OST.UN up $4+ today :D
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Post by AltaRed »

In June/03 I purchased OST.UN to our portfolio, a split trust capital unit based on COS.UN I believe. Price paid was $19.93
FWIW, I bought my COS units on June 27/03 at $35.15. Think this is a long term hold. As Syncrude eventually tapers of the large capex expansion program, more cash will be available for distribution. Of course, we might also have $20-25 oil prices again too.
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gummy
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Canadian Oil Sands COS (formerly COS.UN)

Post by gummy »

Anybuddy own this guy?

The Yahoo chart is in error. It should look like:
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Post by randomwalker »

Afraid I don't own it but I have been wondering about the long term viability of the oil sands projects . Nobody seems to talk about the huge amounts of natural gas currently used to sepatate the oil from the sand.

When I hear that natrural gas finds seem to have topped out in Alberta and we're planning on building termials on the east coast for the importation of liquified natural gas I wonder where the energy for the separation process will come from. Perhaps a nuke plant for Alberta?
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Post by Springbok »

randomwalker wrote: I wonder where the energy for the separation process will come from. Perhaps a nuke plant for Alberta?
Could be, but I understand that the newer plants are being designed to use the heavy residue as fuel.

It would take a long time to get a nuclear plant approved and built but it may make sense to cogenerate using nuclear energy and use lower pressure steam from turbines for oil extraction.
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Post by unicef01 »

in addition to natural gas.. there is alot of water used in the process, no?

i recall hearing donald coxe say "mother is the necessity of invention" when talking about these issues related to the oilsands..at which point he mentioned a project that nexen was involved in, the long lake project which makes a claim of ..

"Natural Gas Costs Virtually Eliminated

The Long Lake Project is Canada's first to combine SAGD bitumen recovery with a patented reconfiguration of proven upgrading technologies, including the OrCrude™ process. This approach eliminates natural gas use – a major and volatile SAGD cost, providing the Long Lake Project with a $5 - $9 cash operating advantage over competitive oil sands projects."

http://www.longlake.ca/project/technology.asp

there must be other technologies in the works to address all these issues?

what d'all think ?

======================

on a different note, i noticed that deer creek energy was purchased by total of france.... they paid a huge premium over the book value of the assets...did they overpay abit? the public attention and price movement of these energy companies are looking more like tech stocks every day...
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Post by Springbok »

unicef01 wrote:in addition to natural gas.. there is alot of water used in the process, no?
Yes - And Alberta does not have that much water. The Long Lake project seems to have adressed this in part, but still uses a lot of water even although much of the condensed steam seems to be recycled.

http://www.longlake.ca/project/description.asp

there must be other technologies in the works to address all these issues?

what d'all think ?
There are a lot of problems - water usage, huge environmental problems, staffing, etc. All of these will likely slow development of the oil sands, but with current production cost at <$20.00/bbl and oil at >$60/bbl not much will stop the exploitation of this area.


As investors we can probably gain from this, but what kind of legacy will be pass on to our grandchildren? The last paragraph of this link sums it up:

http://www.ualberta.ca/~parkland/post/V ... pratt.html
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Post by Bylo Selhi »

Donald Coxe Provides an Update on the Canadian Oil Sands Sector as a Strategic Investment in Oil Reserves for the Long-Term
TORONTO, Aug. 5 /CNW/ - Join Donald Coxe, Global Portfolio Strategist, BMO Financial Group, for an update on his outlook for the Canadian oil sands sector. Mr. Coxe will provide a brief commentary and then take questions and answers.

WHEN: Friday, August 5, 2005 2 p.m. EDT
Conference Call Number: 1-877-323-2090 or 416-695-6623

Copies of Basic Points, Mr. Coxe's institutional portfolio strategy report that deals with the Oil Sands Outlook (January 2005 and March 2005), are available by visiting: http://www.harrisnesbitt.com/bresource/ ... efault.asp.

A transcript of the call and one-on-one interviews will be available.
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Post by Arby »

DBRS recently rated the stability of COS.un at STA-4(high), which is a low rating but better than other oil & gas royalty trusts. See http://www.dbrs.com/web/sentry?COMP=1400&DocId=149793

I wouldn't buy it for income with a current yield of only 1.69%. And with oil at an all-time high right now, the units are unlikely to see continued capital gains in the future.
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Post by AltaRed »

gummy, I bought COS back when it was $35 and have continued to hold it as a long term hold. Is tempting to sell it now and crystallize the gains.
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Post by gummy »

gummy, I bought COS back when it was $35 ...
Mamma mia! Clever dawg!!
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Post by scomac »

Another new major player in the oil sands.

Like BHP, TEK.SV.B is becoming a one-stop-shop for commodity investors.

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Post by Dennis »

Altared and any other informed opinions on the oil industry. I'm looking for an opinion as the sustainability the high valuations of COS.UN and it's sister, OST.UN. Are the present prices unrealistically high? Is it a given that they must drop?

If one was to recomment profit taking (I have done some already), then just where would one invest these freed up funds?
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Post by gummy »

Anybuddy got this guy?
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Post by biker »

Looks like it got a major boost after the 60 minutes program on the Oil Sands a few weeks ago.
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Post by AltaRed »

First time I've looked at this thread or the business itself since last fall. I have no idea what to make of the recent trading pattern of COS. Seems to behaving more like a volatile penny mining stock than a sound energy play. I just don't see these unit prices (and underlying oil prices) being sustainable for the longer term but then what do I know?
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Post by Nemo2 »

Exit, pursued by a bear.
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Post by gummy »

An interesting article on the Oil Sands:
http://www.growley.com/war/can-oil.html
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Post by Nemo2 »

Exit, pursued by a bear.
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Post by eric »

Another newb question...

In the case when you know a split is coming, is it generally better to buy before or after the split (or does it even matter)?

Likewise, does the dividend/distribution get hacked at the same ratio as the split so the yield stays the same?
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Post by gummy »

My brother-in-law would like to buy COS.UN, but can't afford 100 shares @ $160.

Aah, but when it splits, he'll buy. :D
I suspect there are lots of folk in that frame of mind, so I expect the price will take a (short-lived) jump up after the split.

Some, expecting this jump (and who can afford the price per share), will buy before the split.
So I suspect the price will rise somewhat before the split as well as after.

However, I also suspect that other factors will have a greater affect, like Bush predicting less dependence upon middle-Eastern oil, and Chevron's increased interest, and the start of the pipeline from OIL-to-USA ... and (especially!) when the Chinese presence is in the news!

But then I have about as much credibility as the guy on Rob-TV who said that COS was way overpriced!
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Symbol-COS Straying from Core Business....

Post by AltaRed »

..or is the management team being extremely visionary? http://www.globeinvestor.com/servlet/st ... 0/GIStory/

Gas from the far Arctic is a whole different animal from gas from the Mackenzie Delta. Maybe 2020 and beyond unless there are visions of a major decline in WC Basin production that would disconnect Alberta markets from those of the USA.
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