HUSKF - Cenovus Energy's Acquisition Of Husky Makes It A Must-Own In The Energy Sector
- This is the type of energy deals that make sense and unlike the PXD/PE transaction. The two weaknesses of both companies are resolved with this merger.
- CVE had a WCS-WTI uncertainty weakness. Husky had a high opex/boe and not enough production problems.
- By merging these two entities, CVE has effectively created a 2nd Suncor with a similar production profile and higher refining capacity but trading at a 43% discount.
- For us, we have sold 70% of our Suncor position and doubled down on CVE at $3.41 USD. We will also be watching for the closure of this merger for those warrants. We think if you are bullish on oil prices and energy stocks, in general, going forward, this is a must-own.
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Cenovus Energy's Acquisition Of Husky Makes It A Must-Own In The Energy Sector