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Speculation on oil shale development requires a high, stable price for oil, which has been a recent anomaly. So I would argue that in the short term oil sands are overvalued. In the long term, of course, they just might keep us all driving some sort of vehicles on, or hovering over, this continent into 2150. I'm being fascetious and speculataive myself here.
these oil sands are a bit different than oil shale. The syncrude project is fairly mature with increasing yearly production. The biggest headwind is the rising price of NG, which is partially offset by the higher price the sweet crude receives.
Still, what is the margin on extraction of crude from "oil sands"? It involves more processing, making it more susceptible to lose profitability if there is a significant downturn in the price of oil. Is there some truth to that?
COSWF has a great deal of cash and is promising to make significant distributions in the future. This attests to the profitability of what they are doing and the reason for some big name partners. Future tax hikes by Alberta's government could lead to problems for the stock and the company, but, I doubt they will kill their many golden geese.
Big oil is reporting the rapid deceleration of developing the oil sands. GS just reported the need of 85.00 oil to turn a profit. I don't see 85.00 oil until there is a major shift in dynamics.
COSWF reports its cost per barrel for extracting and processing synthetic crude from their oil sands at $35.-38./bbl. You tell me how this is not profitable with crude trading in the range of $55-85./bbl. I have owned and followed COSWF and Suncor for six years and none of the Canadian oil sands producers has ever reported that its production cost was remotely near $85. They've been doing this already for decades, during which crude has traded below $25./bbl. Goldman could not possibly have made the statement referred to.