Tag: DCOGI

Per the December 14, 2021 reinvestment policy, the Divestor Canadian Oil and Gas Index (DCOGI) has the following reinvestment of cash proceeds as received from dividends, as based on the opening prices of the first trading day of 2022:

Divestor Canadian Oil and Gas Index - January 4, 2022 Re-Balancing

Ticker	Fraction	Reinvest$	Price	Shares	Residual$
ARX	5%	1,908.34	11.75	162	$4.84
BIR	5%	1,908.34	6.51	293	$0.91
CNQ	20%	7,633.38	54.2	140	$45.38
CVE	20%	7,633.38	16.01	476	$12.62
MEG	5%	1,908.34	12	159	$0.34
PEY	5%	1,908.34	9.6898	196	$9.14
SU	20%	7,633.38	32.5	234	$28.38
TOU	10%	3816.69	41.25	92	$21.69
WCP	10%	3816.69	7.6014	501	$3.88
XEG		27,147.19	10.83	2,506	$7.21
ZEO		47,693.04	47.35	1,007	$11.59
VCN		29,228.59	43.25	675	$34.84

(Updated February 5, 2022: Please note that I forgot to incorporate the Tourlamine special dividend of $0.75 in the 2021 results. This has been incorporated into the table and values edited accordingly.)

The total sum available for re-investment was $38,166.89.

The share counts have been revised on the index accordingly.

From February 5, 2021 to December 31, 2021, the DCOGI earned 78.8%, while the nearest comparator, the XEG.TO ETF, earned 68.5%.

While the DCOGI is not mirrored by real money, given the liquidity of all of its components, it is fairly easy to “replicate at home” if you wish.

Initial Post (February 5, 2021)

The Divestor Oil and Gas Index has done pretty well since inception. It is up 48.7%, compared to 43.0% for XEG and 37.3% for (the more pipeline-heavy) ZEO.

Birchcliff Energy has been the big winner in the index so far, likely due to the fact it is a pure unhedged natural gas producer, and natural gas has been on fire lately. AECO has spiked above CAD$4/GJ in the recent few days.

The underperformer has been Whitecap Resources, which is likely due to technical factors concerning the recent acquisition of TORC and NAL (which involved stock swapping). With those acquisitions, however, they will be able to increase their drilling inventory considerably for future expansion, while others on the list (the large 3) will be more constrained on growth.

This post is for future reference.

In general, the status of Canadian oil and gas (no doubt due to ESG investors, coupled with our federal administration) has suppressed asset prices to the point that is reminding me of how Philip Morris was trading in 1999-2000 (single digit free cash flow multiples). Needless to say, I think we are in the early stages of a mean reversion process.

I introduce Divestor’s Canadian Oil and Gas Index (DCOGI), which covers a good swash of upstream production, and some downstream as well. It is a pretty simple index which covers most of the Canadian oil and gas production, and some downstream refining –

20% of: CVE, CNQ, SU
10% of: TOU, WCP
5% of: ARX, BIR, MEG, PEY

I will set the index at 100, and construct it off of a notional index of $1M invested at the prices closing February 5, 2021. No rebalancing. Dividends/distributions will NOT be reinvested but cash drag will be tracked. I’ll post more details of the index composition this weekend and track it periodically.

(Update, December 14, 2021 – I have posted a Re-Balancing Policy)

Update at the end of the trading day:
Ticker – Shares:
ARX – 7,426
BIR – 20,325
CNQ – 6,196
CVE – 24,600
MEG – 8,993
PEY – 10,482
SU – 9,066
TOU – 4,662
WCP – 19,048

The index performance can be viewed here!