Speaking of Canada’s oil sands … while American politicians continue to flip-flop on the fate of TransCanada’s (NYSE:TRP) Keystone XL pipeline, our neighbors to the north aren’t waiting around. That includes moving forward with various plans to build pipelines that will flow from the oil sands to the west coast designed specifically for export to China.
One of the biggest beneficiaries of these pipelines — or the Keystone, for that matter — could be beaten-down Canadian Natural Resources (NYSE:CNQ).
The company operates across a wide spectrum of hydrocarbon production, but its main forte is oil-sands production, as the bulk of its proven reserves are located in bitumen. As such, the company has seen its shares retreat as Canadian crude oil has traded at a wide discount to Bakken-based WTI and international Brent crude. However, when these various westward oil-sands pipelines are built, CNQ will see the price differential shrink and boost its bottom line.
In the meantime, investors can snag shares at a huge discount when comparing the firm to other Canadian and American oil companies. CNQ currently trades for a forward P/E of less than 11, while rivals EnCana (NYSE:ECA) and Talisman (NYSE:TLM) forward P/E’s are in the mid-teens and twenties.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.