caseyresearch.com / By Marin Katusa / Aug 26, 2014
The unconventional technologies that have unlocked the oil and gas within the Western Canadian Sedimentary Basin (WCSB) will bring profits to companies operating there as long as West Texas Intermediate (WTI) oil prices stay above US$85 per barrel and natural gas prices remain above US$4 per million cubic feet (Mcf). We see the best of these companies having a great run for at least the next 12 months.
Here’s why.
Reason 1: The Weak Canadian Dollar
The Canadian dollar continues to weaken against the US dollar; we predict this trend will continue throughout 2014 and 2015. The Bank of Canada is in no rush to increase interest rates. Its latest Monetary Policy Report declared a “lower Canadian dollar should provide additional support” to the economy, which is certainly true for the WCSB. In fact, for every 10 cents the CAD weakens relative to the USD, the cash flows of exploration and production (E&P) companies increase by 15%.
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