Cole Smead of Smead Capital tackles the biggest question investors are asking: Does Venezuela change the global energy game? Cole argues the market is confusing headlines with fundamentals, explaining why time, capital, and physics still dominate oil markets. He outlines why fears around Canadian heavy oil may be misplaced, why WTI vs WCS spreads matter, and how potential pipeline developments could reshape long-term outcomes.
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- Cenovus Energy (CVE.TO)
- Retained the full position post-MEG deal, now over 12% of the non-US portfolio—the fund’s largest holding.
- Monday’s sharp sell-off was “utterly ridiculous”—suggests selling refineries to buy back stock for better capital allocation and wealth building.
- Investors should demand strong returns given the risks and volatility in energy.
- Strathcona Resources (SCR.TO)
- Recently issued a $10 special dividend (return of capital), treating shareholders well.
- Management (led by Adam Waterous) is honest and committed to production growth toward 200,000 barrels/day.
- Aligns with desire to grow production into the current environment for future upside.
- Tamarack Valley Energy (TVE.TO)
- Added during the last period of market tumult; strong focus on low DD&A (depreciation, depletion, and amortization) per barrel.
- Water flooding techniques repeatedly boost reserves beyond initial purchases—essentially getting extra reserves “for free.”
- Screens well on key metrics like efficient reserve additions and economic earnings potential.
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DISCLAIMERS: This text AI generated, human edited. The information provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice. The views expressed by the host and guests are their own and do not necessarily reflect the opinions of any organization or company. The host and guests may maintain positions in any securities discussed on the podcast. Always consult with a qualified financial advisor or professional before making any investment decisions.
