News from The Globe and Mail
Buyback plan boosts shares of oil firm
BRENT JANG 00:00 EDT Wednesday, August 06, 2003
PetroKazakhstan Inc. shares jumped more than 12 per cent to a 52-week high yesterday after the oil producer announced a share buyback program.
The Calgary-based company, which owns oil assets in the Central Asian country of Kazakhstan, plans to buy back up to 5.8 million shares over the next 12 months.
Investors reacted to the news by sending PetroKazakhstan shares up $2.25 to $20.35 on the Toronto Stock Exchange on heavy volume that exceeded a half-million shares - well above its daily average of 155,000 shares on the TSX.
PetroKazakhstan shares have been on a tear ever since the firm announced last week that its second-quarter profit had doubled to $68.2-million (U.S.). Over the past four trading sessions, the stock has climbed 20 per cent on the TSX.
The stock also received a lift from a corporate presentation on Monday by PetroKazakhstan executives at an oil and gas conference in Denver. In that presentation, PetroKazakhstan said its future looks bright, with strong production of light sweet crude and co-ownership of a refinery.
Ian Doig, publisher of energy newsletter Doig's Digest, said the international play in the former Soviet republic went through a sour stage but has taken a turn for the better. "Everybody got a good taste of vinegar in their mouth," he said.
Bernard Isautier, PetroKazakhstan's chairman and chief executive officer, has guided the firm to new heights after it nearly collapsed in 1999.
The company, then named Hurricane Hydrocarbons Ltd., obtained bankruptcy protection four years ago in Alberta. But it recovered from penny stock status to become a firm now valued at more than $1.5-billion (Canadian).
Wilf Gobert, an analyst with Peters & Co. Ltd., said the producer expects to exit this year with oil output of 180,000 barrels a day, compared with current production of 162,000 b/d.
Investors have been rewarding PetroKazakhstan for its strengthening operations, and for its prospects for resolving a dispute in a joint venture awaiting approvals from the Kazakhstan government.
"The fuel in the fire is the share buyback and a rumour for a possible resolution to an oil joint venture that includes a German company," Mr. Gobert said.
PetroKazakhstan has 77.7 million shares outstanding. Central Asian Industrial Holdings NV is the producer's largest shareholder, with a 19-per-cent stake. The affiliate of a Kazakhstan banking group has agreed to take part in the share buyback program to maintain its ownership percentage.
By early August next year, PetroKazakhstan expects to buy back up to 10 per cent of its public float.
The company has bought back four million shares over the past 12 months, at an average price of $14.60 a share. |
