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Energy Summary for Jan. 16, 2023

2023-01-16 20:59 ET - Market Summary

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by Stockwatch Business Reporter

U.S. markets were closed for Martin Luther King Jr. Day. West Texas Intermediate crude for February delivery lost $1.01 to $78.85 in electronic trading on the New York Merc, while Brent for March lost $1.09 to $84.19 (all figures in this para U.S.). Western Canadian Select traded at a discount of $23.50 to WTI, unchanged. Natural gas for February added 21 cents to $3.63. The TSX energy index added a fraction of a point to close at 243.35.

Oil sands giant Suncor Energy Inc. (SU) edged up 13 cents to $43.55 on 2.69 million shares. In a one-sentence announcement this morning, it informed investors that, "in the interest of continued co-operation," it has extended the right of Elliot Investment Management to add another director to Suncor's board by about six weeks to Friday, March 17.

The brief update contained no further details. Elliott, as investors will recall, is the activist shareholder that took aim at Suncor last April, lambasting its "missed production goals, high costs and safety failures." They reached a truce in July after Suncor agreed to appoint three Elliott-nominated directors and grant it the right to nominate a fourth director by Jan. 31, 2023, "if certain performance criteria relative to peers are not met by Dec. 31, 2022." They specified in a regulatory filing that Elliott would pull the trigger if Suncor's total shareholder return (dividends plus any increase in the share price) underperformed Canadian Natural Resources Ltd. (CNQ: $76.80), Cenovus Energy Inc. (CVE: $25.75) and Imperial Oil Ltd. (IMO: $65.80) by 10 per cent or more. Suncor's actual underperformance came in at 14 per cent, according to TD analyst Menno Hulshof. As a result, Elliott looks poised to exercise its right to expand Suncor's board.

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