Westbeck Capital Management, the London-based energy hedge fund that profited handsomely from its decision to short U.S. shale oil producers in 2019, is looking to bet on Canadian oil companies this year. According to Jean-Louis Le Mee, the CEO of the fund, Canada’s oil sector is set to rack up some major gains in 2020.
In an interview with Bloomberg, Le Mee noted that Canadian oil operators saw stock prices rise by 40% last year. Further gains are likely to follow in 2020, he said, since Canadian operators have lower operating expenses than U.S. shale developers, as well as fewer worries about abrupt production declines.
“At current oil prices, Canadian oil names are generating gigantic amounts of free cash flows, as they aren’t spending money to grow their product,” he told Bloomberg. “They are just spending to maintain it.”