Crossy;
Oil and gas juniors and trusts running hard in 2005
CALGARY, Jun 9, 2005 (Canada NewsWire via COMTEX) --
With all of the recent merging, acquiring, restructuring and drilling in the Canadian junior and energy trust sectors, the people involved are running hard - maybe even harder than ever.
A survey of first quarter results for Canadian juniors and trusts by Iradesso Communications, the iQ report, shows some high turnover rates. Of the 83 publicly traded junior companies with production between 500 and 15,000 barrels of oil equivalent per day (boe/d), 20 companies (or 24 percent) are new to the subgrouping since the last survey was done six months earlier. In addition, five of the 31 Western Canadian conventional energy trusts are new to the survey.
"There are more conventional energy trusts and more publicly traded juniors in this report than we have ever seen." said Iradesso President Peter Knapp "Company lifespans are short and everybody appears to be in a rush. Geologists, engineers and business people don't want to miss their chance to make big dollars while the commodity cycle is in their favour."
The iQ report compares statistics for juniors and trusts ranging from cash flow multiples to changes in quarter-over-quarter production levels. The report is available free of charge to investment community members and individual investors who contact Iradesso Communications through their online form available at: www.iradesso.com/i/IOR/newsserviceform.html
The latest report shows that juniors have a much higher weighting to natural gas production than trusts. For juniors, the median weighting was 69 percent natural gas production, while trusts had a median weighting of 53 percent natural gas. Natural gas lends itself to exploration activities while the other alternative, crude oil, is a more mature resource is more suited to long-term recovery efforts normally associated with trusts.
The iQ report also shows the average share price increase for juniors during the first quarter of 2005 was 16 percent. The average total return for the conventional trusts during the quarter was eight percent including unit price changes and distributions paid during the period. In the subsequent two months of April and May, junior share prices lost six percent on average, while energy trusts lost an average of two percent when combining unit prices and distributions.
Junior companies boasting the biggest share price gains in 2005 up to May 31 were Pilot Energy Ltd. (TSXV:PGY - up 99 percent from $0.75 to $1.49), Accrete Energy Inc. (TSX:GZ - up 92 percent from $3.85 to $7.40) and Petrobank Energy and Resources Ltd. (TSX:PBG - up 63 percent from $2.32 to $3.79). For juniors, median cash flow multiples are slightly lower on a quarter-over- quarter basis. The median enterprise value fell to 7.6 times annualized cash flow from eight times after the third quarter of 2004.
The three trusts with the greatest increases in unit price plus distributions were Petrofund Energy Trust (TSX:PTF.UN - up 22.5 percent), Vermilion Energy Trust (TSX:VET.UN - up 18.9 percent) and Bonavista Energy Trust (TSX:BNP.UN - up 18.2 percent).
Allan |
