Veren-Whitecap: This Simulation Through COVID Made Me Buy A Lot

2025-04-28 03:52:50 ET

Summary

• I sold all oil stocks to buy a large position in Whitecap Resources, driven by the strong Whitecap-Veren merger and its resilience.
• Whitecap's Q1 results were solid, with production beating guidance and strong funds flow, despite Capex frontloading.
• The merger's synergies and cost reductions lower the breakeven price to $47/bbl, making the 9% dividend yield sustainable even under stress.
• Whitecap offers a 15% FCF yield at $60 WTI and can survive extreme conditions like COVID, making it a compelling investment.

I sold all oil stocks in my portfolio. I didn't do it because I would be bearish on oil prices; I did it so that I could buy a large position in Whitecap Resources ( WCP:CA ), ( OTCPK:SPGYF ). It wasn't Whitecap's Q1 results that prompted me to act; it was the realization of just how strong and resilient the duo of Whitecap and Veren (VRN) (VRN:CA) is becoming in the soon-to-be-approved merger....

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