MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WEDNESDAY, FEBRUARY 18, 1998 (4)
COMMENTARY
Crude Oil
Sustained low prices?? That appears to be the case. NYMEX crude oil has settled in to a narrow trading range of $15.50-$16.50, with no major price rise in the near future. The Iraq situation has not scared the market, warm North American weather is expected to impact prices further, and the impact of Asia is yet to be seen (but is certainly not a bullish unknown). The technical picture is still negative in both the short term and medium term, with no signs of a near term change in trend. Buyers should be doing all they can to lock in prices at these levels. Sellers should be looking at curve lock related products (to lock in the contango in the forward curve).
Natural Gas
The technicals were correct again! It would appear that most of the recent run up in prices (into the $2.40's) was due to short covering and profit taking. Longer term (3-5 years), there is concern that reserves will not be replaced and at that time we could see $3-$4 ga once again. But even taking into account increased volatility due to increased commodity fund activity. in the near term $1.75-$2.50 seems appropriate.
Alberta prices have soften from their recent highs, with near term prices expected to remain quite firm. Concern over the lack of field receipts remains a bullish factor, and if we continue to see big draws from storage, prices could see a further $0.15-0.20 of gains. Lack of field receipts has been impacting prices more than the effects of warmer than normal weather in the province.
OIL & GAS REFERENCES
Charts
oilworld.com
oilworld.com
NYMEX Reference:
quotewatch.com
MARKET ACTIVITY
INDEXES
The Toronto Stock Exchange 300 Composite Index slipped 0.2% or 16.25 to 6944.21. Can't blame the shortcoming on the oil groups yesterday. They didn't perform well, but was in line with the 300. The Oil & Gas Composite Index also slipped 0.2% or 14.33 to 6221.85. The sub-components were mixed. The Integrated Oils gained 0.3% or 29.73 to 8895.24. The Oil & Gas Producers fell 0.3% or 17.21 to 5392.95. The Oil & Gas Services Index was again hit hard, falling 1.7% or 45.92 to 2661.26. It doesn't seem to far back in time when the TSE 300 & O&G Composite were neck to neck. The now 600+ spread between the two is discouraging
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
NEW PHLX OIL SERVICE SECTOR
bigcharts.com.
lonestar.texas.net
MOST ACTIVES
Kerms Top21, Spec15, Serv9 companies are in bold print
Gentry Resources, Canadian Natural Resources, Talisman Energy, Petro-Canada, Anderson Exploration, Gulf Canada Resources, Alberta Energy, Tarragon Oil & Gas, Ranger Oil, Northrock Resources, Poco Petreoleums and Renaissance Energy were among the top 50 most active traded issues on the TSE.
Net gainers included Seven Seas Petroleum (U) $1.90 to $27.40, Crestar Energy $1.75 to $21.25 and Pioneer Natural Resources Canada $1.50 to $32.00.
Percentage gainers included Black Rock Ventures 14.3% to $1.20, TriGas Exploration 13.8% to $3.30, Crestar Energy 9.0% to $21.25, Seven Seas Petroleum (U) 7.5% to $27.40, Pan East Petroleum 6.7% to $1.60, Newstar Energy 6.5% to $4.25 and Windsor Energy 5.5% to $5.80.
On the downside, Remington Energy fell $1.40 to $15.35, Chieftain International $1.00 to $31.00, Denbury Resources $0.90 to $25.25, Ulster Petroleums $0.70 to $11.50, Tarragon Oil & Gas $0.60 to $8.60 and Kappa Energy $0.53 to $1.77.
Percentage losers included Kappa Energy 23.0% to $1.77, Neutrino Resources 11.2% to $1.35, Westfort Energy 10.8% to $1.41, Rider Resources 9.8% to $3.61, Profco Resources 8.7% to $0.95, Remington Energy 8.4% to $15.35, Richland Petroleum 8.1% to $3.40, Black Sea Energy 7.4% to $1.25, Tarragon Oil & Gas 6.5% to $8.60, Bellator Exploration 5.8% to $1.30, United TriStar 5.8% to $0.98, Ulster Petroleums 5.7% to $11.50, Founders Energy 5.7% to $0.99 and Abacan Resources 5.4% to $2.82.
No new 52-week highs
Bow Valley Energy, Founders Energy, Kappa Energy, Remington Energy, Southward Energy and Tarragon Oil & Gas reached new 52-week lows.
There were no service companies among the top 50 mst active traded issues on the TSE.
Service companies were absent from the listing of top net gainers and percentage gainers.
On the downside, Ensign Resource Service fell $1.70 to $27.55, American Eco $0.65 to $16.50, Tesco $0.65 to $19.45 and Canadian Fracmaster $0.50 to $18.50.
Percentage losers included Ensign Resource Service, down5.8%.
There were no new 52-week highs.
Anadime Corp. reached a new 52-week low.
Over on the Alberta Stock Exchange Raptor Capital, Doreal Energy, HEGCO Canada, AltaPacific Capital, Bearcat Exploration, Rock Capital, Hampton Court, Red Sea Oil, Green River Petroleum, Dalton Resources, Stampede Oils, Storm Energy, Parkcrest Exploration, Colt Energy and Bolt Energy were among the top 30 most active traded issues.
Net gainers included Hawk Oil B $0.60 to $1.75, BW Technologies $0.35 to $4.05, Hawk Oil A $0.20 to $1.10, Doreal Energy $0.18 to $2.28, Rock Capital $0.18 to $0.95, Meota Resources $0.15 to $1.25, Tier One Energy $0.15 to $2.00, Jett Investment $0.12 to $1.05, Corridor Resources $0.10 to $1.20, Progress Energy $0.10 to $2.60, Bolt Energy $0.09 to $0.69, Hampton Court $0.08 to $2.53, Scimitar Hydrocarbons $$0.08 to $0.45 and DeTECH $0.07 to $0.83.
Percentage gainers included Hawk Oil B 52.2% to $1.75, Q Energy 26.9% to $0.33, Endeavor Resources 25.0% to $0.25, Rock Capital 23.4% to $0.95, Hawk Oil A 22.2% to $1.10, Scimitar Hydrocarbons 21.6% to $0.45, Bolt Energy 15.0% to $0.69, Meota Resources 13.6% to $1.25 and Jett Investment 12.9% to $1.05.
On the downside, Progress Energy B fell $0.50 to $4.00, Arrival Energy $0.40 to $1.60, Solid Resources $0.25 to $6.70, HEGCO Canada $0.20 to $2.90, BriAlto Energy $0.15 to $0.70, Red Sea Oil $0.15 to $2.80, Alma Oil & Gas $0.10 to $0.45, Del Mar Energy $0.10 to $0.50, Destiny Resource Service $0.10 to $2.95, Palmetta Resource $0.10 to $0.95, Rapidfire Resources $0.09 to $0.16 and Airgen A $0.08 to $0.57.
Percentage losers included Rapidfire Resources 36.0% to $0.16, Rockport Energy 21.4% to $0.22, Aspin Energy 20.0% to $0.20, Arrival Energy 20.0% to $1.60, Ramarro Resources 18.8% to $0.26, Alma Oil & Gas 18.2% to $0.45, BriAlto Energy 17.6% to $0.70, Del Mar Energy 16.7% to $0.50, Barra Resources 14.3% to $0.30, Tappit Resources 13.9% to $0.31, PanOil Resources 12.5% to $0.35, Airgen A 12.3% to $0.57, Progress Energy B 11.1% to $4.00 and Cascade Oil & Gas 10.0% to $0.45.
Doreal Energy, Green River Petroleum, Hawk Oil B and Rock Capital were among 52-week highs.
Green Maple Energy, OTATCO, Progress Energy B and WWB Oil & Gas reached new 52-week lows.
EXCHANGE INFORMATION
Falcon Well Services Ltd. (FWSL/CDN) announced that the company has been advised by the Canadian Dealing Network Inc. that the quotation of the common shares of Falcon has been approved. Quotation of Falcon's common shares on the CDN's system under the symbol "FWSL" will be available starting Wednesday, February 18, 1998.
Falcon Well Services Ltd. is a Calgary-based oil and gas well servicing company, performing recompletions, perforations, and other types of service requirements for existing oil and gas wells. It also has the capacity to drill both horizontal and vertical wells. Falcon's services are presently utilized in the oil and gas producing areas of Western Canada and the company is contemplating expanding internationally.
As of the date of this press release, there are outstanding 28,376,627 Common Shares and 75,136 Preference Shares of the Capital Stock of Falcon.
ANALYSTS - FUND MGR.'S - BUY - HOLD - SELL - MISC.
Zargon Oil & Gas (ZAR, $3.00) F& D Costs Better Than Expected
Zargon has completed its reserve report for 1997 which shows finding and development costs of approximately $6.00 per barrel on a proven basis. These results are excellent in comparison to the Company's peers and impressive given the weakness in the sector. Investors are not currently paying a premium for Zargon as the preliminary NAV calculation is roughly $3.00 per share. Zargon is rated as a Buy.
Symmetry Resources (SYO, $1.34) Pools Acreage With Amber Energy
Symmetry has finalized an agreement with Amber (AMB, $14.50) and a First Nations group to pool acreage and increase the Company's undeveloped land position. Symmetry will now have 5000 acres of undeveloped land in the Dawson area compared to 1900 acres prior to this agreement. This additional land adds another two years of drilling for Symmetry. Symmetry shares are rated as a Buy with a target price of $1.70.
Chieftan International (CID, $32.00) 1997 CFPS Better Than Expected
Chieftan reported fully-diluted 1997 CFPS of US$3.06, slightly higher than the estimate of US$2.98. 1998 CFPS estimate is US$3.80 and it generates a $33.00 target price for the Company's shares. Based on this target price, Chieftan is rated as a Hold, however watch a few exciting exploration plays that the Company is drilling in the Gulf of Mexico. Chieftan presently has five rigs drilling and there are three wells that have "company maker" potential. . |
