In a report, ATB Capital Markets analyst William Lacey said companies are expected to duplicate their financial performance in pounds sterling from the first quarter of 2021 for the remainder of the year and into 2022, provided oil prices West Texas Intermediate benchmarks remain close to US $ 60. per barrel.
The five companies, Canadian Natural Resources Ltd., Suncor Energy Inc., Imperial Oil Ltd., Cenovus Energy Inc. and MEG Energy Corp., are expected to bring in $ 59 billion more in cash than they do. spend on operations, of which about $ 23.2 billion will go to capital budgets and about $ 9 billion to dividends.
The report says that will leave around $ 26.8 billion to pay off debt, buy back shares for cancellation and use them to raise dividends.
Lacey says the five companies have been consistent in setting leverage and shareholder return targets for all short-term cash flow rather than spending to increase production organically or by buying others. companies or assets.
The report says Canadian companies are attractive to investors compared to their American rivals because they are more heavily focused on oil production.
“Assuming WTI prices remain in the US $ 60 per barrel range, we believe the combination of large free cash flow returns and unusually low (equity) valuations will be too appealing for general investors to look at. beyond, especially in light of ongoing inflation. pressures and the resulting rotation to tangible assets, ”the report concludes.