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Canadian Natural to Divest Stake in the Cold Lake Pipeline

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Canadian Natural Resources LimitedCNQ , aleading exploration and production (E&P) company in Canada, recently announced its decision to monetize its non-core ownership interest of in the Cold Lake Pipeline to Inter Pipeline Ltd. for total value of approximately $527.5 million.

The to-be-monetized properties cover Canadian Natural's 15% stake of Cold Lake Pipeline Ltd. and its 14.7% ownership interest in the Cold Lake Limited Partnership. The transaction, which is expected to complete in 2016, is estimated to generate gross proceeds of $350 million in cash. In addition to this, Canadian Natural will receive 6,417,740 common shares of Inter Pipeline at a predetermined value of $177.5 million. The company expects to generate an after-tax gain of approximately $200 million, post the disposition.

As a result of this disposition, Canadian Natural has secured firm pipeline transportation capacity with Inter Pipeline for the Kirby North production volumes. The company targets first production by the first quarter of 2020. After completion of the sale, Canadian Natural will retain access to the Cold Lake Pipeline system for portions of its crude oil volumes.

Calgary, Alberta-based Canadian Natural Resources is engaged in the acquisition, development and exploitation of crude oil and natural gas properties. It is one of the largest independent E&P companies in Canada, with extensive heavy crude oil and natural gas developments.

Year to date, the Zacks categorized Oil/Gas U.S. Exploration and Production Industry has registered an impressive growth of 48.9%. However, the Magellan stock has outperformed the industry by gaining 54.4%.This is because Canadian Natural's large, diversified oil and gas asset base, along with international exposure to well-balanced conventional and unconventional prospects provides a buffer against uncertainties in the economy.

Some favorably-ranked players from the broader energy sector include Braskem S.A. BAK , Ocean Rig UDW LLC ORIG and McDermott International Inc. MDR . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.

Ocean Rig, on the other hand, delivered an average positive earnings surprise of 66.39% in the last four quarters.

In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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