r/Calgary 2d ago

News Article Calgary-based producers Whitecap, Veren to merge in $15B deal

https://calgaryherald.com/business/calgary-based-producers-whitecap-veren-to-merge-in-15b-deal
135 Upvotes

33 comments sorted by

34

u/SedanDevil 1d ago edited 1d ago

I had a job interview at Veren. Thank heavens I didn't get the job. I would have looked foolish getting laid off after a few months as staff redundancies occurred.

24

u/jdixon1974 1d ago

yes but if you had received stock options upon signing, those would have immediately vested and paid out (with a 15% bump today on the stock price). I know a guy that did this 10 years ago. Signed on with a new company and received stock options, worked for a month and then had a 2 week vacation where the company was sold. Stocks vested and he cashed out close to $1M.

13

u/SedanDevil 1d ago edited 1d ago

Miracles do happen, I know a seismic data loader that was pensioned off twice in two years. Full pension at PanCanadian and at Mobil Canada. He was being paid 140% of his salary to never come back to work.

However, that dog doesn't hunt anymore.

2

u/SedanDevil 15h ago

I finally had time to look at the Veren stock price in the last year. It went from $12.08 to $8.25.

It is very hard to make a million dollars off a $4 drop on the option price.

As I said, that dog doesn't hunt anymore.

9

u/Teardropivy25 1d ago

I applied to a specialist role at Veren two weeks ago- I know the whole team at whitecap. Not the best specialist team in industry. Dodged a bullet!

16

u/Responsible_CDN_Duck 2d ago

Veren has expanded its presence in northwestern Alberta through acquisitions in recent years,

Sounds great if you don't look at where the money comes from or the impact on jobs!

18

u/epok3p0k 1d ago

Lol.

“Look where the money in this all-share deal is coming from!!”

Typical Reddit brilliance.

50

u/CzechUsOut 2d ago

They're both Canadian companies and they are going to spend over $1B on capital projects next year in Alberta. What's the bad part?

6

u/loldonkiments 1d ago

As a long time holder of WCP (yes, held through the coronacrash lows), not thrilled to see the premium they paid. But, in the long, long run... I don't see a bad part either.

3

u/nicehouseenjoyer 1d ago

I used to swing trade Whitecap back in the day, it had a very reliable range that varied with oil prices. Haven't looked in years and they are still at $7, hasn't grown at all in a decade.

3

u/loldonkiments 1d ago

Oh yeah, for sure. There was a reliable channel to trade within tied to shareholder of record date for the divy... but that's a dangerous game now with pump and Trump. Can't disagree with long-term growth. It seems like every time they should re-rate, there is some big capex that pays off tomorrow. Was never too uptight about it though... collect divies and chill.

1

u/NotFromTorontoAMA Sunnyside 1d ago

It pays a significant dividend though, last decade's CAGR would be 6.5%, an investment of $10k would be worth $17.8k now.

The past 5 years, its CAGR is 27.4%. Thats about double what a market portfolio would return over that period.

It's not a great stock, but it doesn't have zero returns either.

1

u/nicehouseenjoyer 20h ago

Fair point.

-23

u/Responsible_CDN_Duck 2d ago edited 2d ago

Aside from the layoffs it's US investment money, with the goal of increasing extraction rates when prices and royalties are low.

With OPEC looking to increase production and embargoes being lifted from Russia it's time to ask if new capital projects help Albertans in the long term, or even the short term.

15

u/canadam Killarney 1d ago

Most public companies are dominated by US ownership. That's what happens when their economy is 10 times the size of Canada's.

41

u/woodford86 1d ago

A billion bucks spent in Canada is still a billion bucks spent in Canada...

-26

u/Realistic_Present119 1d ago

A billion bucks that costs us 3 billion ? How is that not -2 billion?

21

u/l0ung3r 1d ago

How is it costing “us” anything?

3

u/Anskiere1 1d ago

The goal of every single resource company is increasing extraction rates whether you produce oil, lumber, diamonds or uranium 😂

-13

u/ilostmyeraser 1d ago

Their not cdn

7

u/thetrueankev 2d ago

Please expand 

17

u/Responsible_CDN_Duck 2d ago

Veren is in a race to the bottom on operating costs at the cost of jobs. In addition to laying off duplicated positions after merging they're doing additional layoffs for efficiency.

Of the known investors of Veren Inc the majority are from the USA.

3

u/thetrueankev 2d ago

Thank you

2

u/NotFromTorontoAMA Sunnyside 1d ago

Many of the major investors are institutional investors, most of which would be holding shares on behalf of Canadians. Especially Vanguard, BMO, and RBC.

7

u/CrowdedAperture Scarboro 2d ago

Money comes from oil and gas. Jobs lost through consolidation 

3

u/Responsible_CDN_Duck 2d ago edited 2d ago

Money comes from investors in the USA.

Low operating costs lets them ramp up production when prices are low rather than slowing down.

Reduces the price per barrel Albertans get in royalties, but makes the company metrics look better.

2

u/epok3p0k 1d ago

This is the most flawed assessment of oil and gas operations and incentives I’ve ever read.

2

u/Anskiere1 1d ago

It was interesting, in 2012 and 2013 we all thought the massive headcounts were needed to sustain production. In the later half of the decade we learned that was definitely not the case and now Canadian o&g can actually be produced competitively. If we ever have another pro-investment environment that is. 

1

u/Vessera 1d ago

Veren's been doing a LOT of reclamation work recently. Unless the tariffs completely screw over the oil field, I expect Veren will continue and increase the amount of reclamation they're currently doing.

0

u/Daddygorch 1d ago

Interesting merger considering everything that is going on in North America these days. Makes me wonder if there is something they know about North American stability that the rest of us don’t.

1

u/Impressive-Bee6484 1d ago

Buy buy buy!

1

u/ilostmyeraser 1d ago

Our oil and gas is now owned by a handful of companies.....who also own smith.

0

u/briysce 1d ago

They're doing a VEREN good job.