Canadian Oil Earnings ($CVE $SU $CNQ $PREKF)

[Previously regarding Suncor Energy, Cenovus Energy, Canadian Natural Resources Limited, and PrairieSky.]

Suncor Energy: the market capitalization is now $41 billion (at a $31.5 share price) and the enterprise value is $53 billion. They reported earnings for the second quarter of 2023 of $1.4 billion (figures in USD), which means that shares are trading for seven times net (annualized) earnings. This was with an average WTI crude oil price of $73.75/bbl for the quarter, a $15/bbl discount for WCS, and a $2.90/bbl premium for Syncrude.

Upstream production was up 3% year-over-year, from 720k bbls/d in Q2 2022 to 742k bbls/d this quarter. Upstream capital expenditures were up 20% year-over-year, for a "production shortfall" of 17%. (Compare with shale players like OXY, where the production shortfall in the Permian this quarter was 51% or Devon, which had a production shortfall of 80%.)

Suncor's free cash flow for the quarter was $782 million, which is a 6% yield on the current enterprise value. They returned $1.04 billion to shareholders during the quarter, equally split between share repurchases and dividends, for a shareholder yield of 10% (annualized). The refining operating income was down 75% y/y even though their proprietary Suncor 5-2-2-1 index (crack spread) was only down 33%.

Cenovus Energy: the market capitalization is now $37 billion (at a $19.70 share price) and the enterprise value is $45 billion. They reported earnings for the second quarter of 2023 of $643 million (figures in USD), which means that shares are trading for 14 times net (annualized) earnings.

Upstream production was down 4% year-over-year, from 762k bbls/d in Q2 2022 to 730k bbls/d this quarter. Upstream capital expenditures were up 61% year-over-year, for a "production shortfall" of 57%. (Note that the production levels were reduced by wildfires in Alberta this year, which explains part of the shortfall.)

Cenovus's free cash flow for the quarter was $741 million, which is a 7% yield on the current enterprise value. They delivered $427 million to shareholders in the second quarter through buybacks and common share dividends; plus they repurchased 45.5 million of their outstanding warrants for $528 million.

Canadian Natural Resources: the current market capitalization (at a $61.76 share price) is $67 billion, and the enterprise value is $76 billion. They reported earnings for the second quarter of 2023 of $1.1 billion, which means that shares are trading for 15 times annualized earnings. 

Upstream production was down 1.6% year-over-year, from 1.21 million BOE/d a year ago to 1.19 million this quarter. Capital expenditures (CNQ has no downstream) were up 15% year-over-year, for a "production shortfall" of 17%.

CNQ's free cash flow for the quarter was $807 million, which is a 4% yield on the current enterprise value. They delivered $1.1 billion of shareholder returns, comprised of approximately $742 million of dividends and approximately $370 million of share repurchases, for a shareholder yield of 6.6%.

PrairieSky: the market capitalization of Prairie Sky (at $19.50 per share for the U.S. ADR) is $4.7 billion and the enterprise value with $216 million of net debt is $4.9 billion. They reported earnings for the second quarter of 2023 of $36 million, which means that shares are trading for 33 times net (annualized) earnings.

Realized pricing was down 37% y/y and production was down 10% y/y (although oil production was actually up 3%) resulting in revenue down 40%.

Cash from operations was $71 million for the quarter, a 6% yield on the current enterprise value.