Independent energy explorer
Canadian Natural Resources Ltd.
) closed the acquisition of Oklahoma City-based
Devon Energy Corp
) conventional properties in Canada for C$3.125 billion. However,
Devon Energy retained its Horn River and heavy oil properties.
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The market reacted positively to the news, with Canadian Natural
shares hitting an intraday high of $39.17 (also a new 52-week
high for the company) on Apr 2. The stock settled at $39.05 - up
1.5% from the previous close.
The acquired properties would be immediately incorporated into
Calgary, Alberta-based Canadian Natural's operations. The
addition of the acreage and infrastructure will boost growth
prospects of the company in its core areas, and leave room for
further value enhancement in the future.
Canadian Natural is engaged in the acquisition, development and
exploitation of crude oil and natural gas properties. It is one
of the largest independent exploration and production (E&P)
companies in Canada, with extensive heavy crude oil and natural
gas developments. The company has a broad portfolio of low-risk
exploration and development projects that yield long-term volume
growth at above-average rates.
However, the company's exposure to the inherently cyclical and
volatile E&P sector offsets these strengths and remains a key
area of concern. The stock has also been held back by operational
challenges, continued volatility in
and a fresh round of cost inflation in the oil sands regions.
Canadian Natural currently carries a Zacks Rank #3 (Hold). This
implies that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Meanwhile, one can consider better-ranked Canadian E&P firms
Baytex Energy Corp.
Crescent Point Energy Corp.
). Both these stocks currently carry a Zacks Rank #2 (Buy).