Hi Bruce,
All of those are producers, but each have slightly different mixes. Our preference in this environment is to stick with majors, of which you have one - Suncor (TSX:SU). It is more diversified thanks to its downstream (Petro Canada) segment and is one of the lowest cost producers.
As for the rest, they are a mix of small to mid cap producers. In this area, we like to focus on those who aren't as susceptible to Western Canadian Select (Canadian heavy crude) prices. WCS is far more volatile, and until our pipeline issues are solved, is likely to trade at a discount to WTI.
We prefer those with greater exposure to brent (european - higher price than WTI), light and synthetic oil as they command a premium to WCS. VET currently has the least exposure to WCS and its production mix is as follows - 40% WTI, 15% Brent and the rest is natural gas. This means, it has no exposure to WCS pricing.
We also prefer those that generate strong cash flows. At these prices, very few are cash flow positive. However, the price of WTI can reach $50 USD per barrel, WCP and VET both stand out above the rest.
When it comes to make the decision, there are several factors to take into consideration, however I would look at these and see which of your holdings standout out.
- Diversification (single asset, geography, downstream ops?)
- Production mix
- Debt loads
- Free cash flow
It might be helpful for you to create a spreadsheet and compare each of your holdings. Some have very different production mixes and one way to compare FCF is to use FCF as a percentage of revenue. This will allow you to compare each company against one another. FCF number in of itself means nothing given the varying size of companies. This way, you can see what % of revenue the company transforms into FCF and it is directly comparable. I would also analyze the above metrics using year-end 2019 numbers AND trailing twelve months. This will give you an idea of what it looked like pre-COVID and snapshot of what it looked like after the bottom fell out.
Once you do this, you will see some companies stand out above the rest.
Hope this helps,
Mat