MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WED., JANUARY 14, 1998 (4)
MARKET ACTIVITY
INDEXES
The Toronto Stock Exchange 300 Composite Index gained 0.3% or 21.54 to 6351.13.
The Oil & Gas Composite Index gained 0.4% or 23.16 to 5822.75. Among the sub-components, the Integrated Oils gained 0.6% or 46.08 to 8187.30. The Oil & Gas Producers gained 0.4% or 18.59 to 5089.19 and the Oil & gas Services rose 0.64% or nil to 2472.51.
INDEX CHARTS
TSE 300.......... canoe.quote.com
O&G Composite. chart.canada-stockwatch.com
Integrated Oil's.... chart.canada-stockwatch.com
O&G Producers.. chart.canada-stockwatch.com
O&G Services..... chart.canada-stockwatch.com
MOST ACTIVES
canoe.ca or quote.yahoo.com
KERM'S TOP 21 - SPEC 15 - SERV 9 COMPANIES IN THE NEWS
GENESIS EXPLORATION LTD. has closed a deal to sell its indirect interest in the Alliance Pipeline project for $8.7 million resulting in a gain to the Company of approximately $4.9 million ($0.11 net income per share based on year end outstanding shares of 29.4 million).
Genesis has been a partner in the Alliance project since its early stages and maintains its belief in the project as a cost effective method for moving its high BTU gas from Northern Alberta to the Chicago hub. The Company will maintain its commitment to ship gas on the Alliance Pipeline. In addition to the cash consideration, Genesis has obtained an option to move 20 mmcf per day of gas from the Chicago hub via the Duke Energy pipeline transportation system.
After this transaction, Genesis will have a net debt level of approximately $17 million. This will leave the Company at a current debt to 1998 cash flow level of 0.5 years, providing an excellent balance sheet as a platform for the Company's 1998 capital expenditure program. Genesis will not be reducing its 1998 capital expenditure budget of $60 million excluding acquisitions and expects to drill 15 of its projected 50 wells during the first quarter of 1998.
THUNDER ENERGY INC. (THY - TSE) announced today that, together with its partner, it has acquired undeveloped lands and shut-in gas reserves complimenting its core property at Rosalind, Alberta. The acquisition is effective January 1 and is expected to close on January 31st.
The acquisition includes 17,440 acres (8,720 net acres) of undeveloped lands, 2.5 BCF (1.25 BCF net) of shut-in gas reserves and 175 kilometers of 2-D seismic. Total purchase price is $2.2 million dollars ($1.1 million net). Thunder will operate these new lands and will have a 50 percent working interest. Tie-in distances for the shut-in reserves range from 1-2 miles from Thunder's existing infrastructure. Pipelining operations will commence after closing.
Thunder has established itself as the dominant operator in the Rosalind area. Thunder currently owns interests in 108 sections of land, two gas plants, an oil battery and 800 kilometers of 2-D seismic and 25 square kilometers of 3-D seismic. This base will ensure continuous development on the Rosalind property for many years to come. In 1998 Thunder expects to drill up to 20 wells on its Rosalind property.
NORTHROCK RESOURCES LTD. announced that, further to its previous announcement onJanuary 7, 1998, it has mailed to all holders of common shares of Paragon Petroleum Corporation ("Paragon") an offer and bid circular dated January 12, 1998. Pursuant to the offer, Northrock offers to purchase all of the issued and outstanding common shares of Paragon on the basis of $4.10 Canadian cash per Paragon common share or 0.19 of a Northrock common share for each Paragon common share, or a combination thereof. Nesbitt Burns Inc. and Midland Walwyn Capital Inc. have been appointed dealer managers for the offer in Canada.
MASTER DOWNHOLE CANADA announced financial and operating results for the six months ended November 30, 1997. Management feels these results put the Company on target to earn the $ 0.15 per share for the year ended May 31, 1998, as predicted at the Annual General Meeting in November 1997. For financial tables, go here techstocks.com
KERM'S WATCHLIST OF COMPANIES IN THE NEWS
RANGER OIL LTD. has formed an alliance with an United States independent Chesapeake Energy Corporation to develop a 3.2-million acre region in the Helmet, Midwinter and Peggo areas of northeastern British Columbia.
Chesapeake has agreed to purchase a 40% interest in all of Ranger's properties outside the July Lake pool for $71 million (Cdn.).
The transaction is scheduled to close Jan. 31 and completion of the Helmet sale is expected to reduce Ranger's long-term debt by about $50 million (U.S.) to around $442 million.
"It's been our intention for sometime to take on a like-minded partner," said John Faulds, vice-president of investor relations at Ranger. "Chesapeake brings some real strong operational expertise, particularly in horizontal drilling and fractured carbonates."
In a second Canadian acquisition reported by Reuters, Chesapeake has arranged to buy the mid-continent properties of privately-owned Enervest Management Company L.C. for $38 million (U.S.). The properties are said to include 40 bcf of proven reserves and anticipated 1998 production of 4.5 bcf.
In addition to its B.C. activities, Ranger has recently spudded the first well of a three-well exploration program in the Fort Norman area of the Northwest Territories. According to Faulds, the expansive acreage has excellent potential since a moratorium on the area ceased development years ago.
"It's almost a brand new area. It's been very been lightly explored, and an interprovincial pipeline runs right through our acreage," Faulds added.
In the past several months Ranger has sold a number of its non-core properties in the Joffre, Cactus Lake and Parkland areas of Alberta for total net proceeds of $27 million (Cdn.). The company has also divested its 3.3% equity interest in the Alliance gas pipeline, although it continues to support the project as a shipper.
FOX ENERGY CORP. announced that it has recently completed the initial phase of drilling, recompletions and workovers on its 54% operated Medicine Hat Hilda Gas Project in southeastern Alberta.
The Company's average daily gas production for the project during the last week of December 1997 increased to 2,500,000 cubic feet of gas up from 1,000,000 million cubic feet per day. The production increase represents initial rates and is sold under a natural gas sales contract at a December blended selling price of $2.00/Mcf. In November, the Company had received an average price of $2.53/Mcf for its natural gas produced from the Hilda property. Fox has plans to continue optimizing the Hilda Gas Project in early 1998 through new drilling and workovers on existing wells.
In 1997 Fox drilled 21 wells, completed a major natural gas acquisition, and achieved a balanced production mix of light oil and natural gas by year end. Fox achieved an average net daily production of 460 barrels of oil equivalent during the last week of December 31, 1997.
OTHER COMPANIES IN THE NEWS
ULTRA PETROLEUM has been fined bt The Railroad commission of Texas. Texas oil regulators slapped a US$50,000 fine on a Vancouver-based energy firm yesterday for violating state safety rules.
The Railroad Commission of Texas, which oversees the energy sector, unanimously imposed the administrative penalty on Ultra Petroleum Corp. for its handling of oil wells that contain hydrogen sulphide. The sum primarily covers monitoring and contingency plan violations to two Ultra-operated wells.
The company has about three weeks to launch an appeal, said Danny Gibbs, a spokesman for the commission. If it does not file for rehearing within 20 days of the judgment being served on allparties, then the fine will stand.
Hearing examiners of the TRC recommended fining Ultra US$7,500. But the three commissioners, acting on the suggestion of chairman Charles Matthews, raised the penalty to US$50,000.
The commission investigated Ultra following complaints from residents of Tool, a retirement town of 1,700 located about 100 kilometres southeast of Dallas. The residents complained of the rottenegg stench produced by the wells because of the high hydrogen sulphide content.
Greg Ryan, who spearheaded a citizens' group particularly concerned by one well, said he was pleased with the commission's decision.
Officials from the company were unavailable for comment yesterday.
DIAZ RESOURCES LTD. announced that John Habbishaw has resigned as President and a Director of the Company, effective January 13, 1998. Kerm's comment: I think this is the initial step for Orbit Oil & Gas's Robert Lamond to step in. However, it is just my speculation at this point.
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