Ivanhoe Energy continues climb By The Globe and Mail
globetechnology.com
Tiny firm's big plans, Web site mentions sparks stock's rally
By ALLAN ROBINSON
INVESTMENT REPORTER
Wednesday, August 27, 2003 - Page B11
Momentum in the shares of stock promoter Robert Friedland's Ivanhoe Energy Inc. continued yesterday with the stock climbing 18.4 per cent or 44 cents a share to close at $2.83 on the Toronto Stock Exchange.
The rise, which touched a new 52-week high yesterday of $2.90, appears to have been sparked by a mention last week on CBS MarketWatch.com by newsletter writer Thom Calandra. The company now has a market capitalization of $410.7-million.
About 26.9 million shares changed hands yesterday on the Nasdaq, with the shares closing at $2.02 (U.S.) a share. About 3.6 million shares traded on the S&P/TSX.
Hong Kong-based Mr. Friedland, deputy chairman, owns 46.6 million shares of Vancouver-based Ivanhoe Energy, a 32.15-per-cent interest.
A press release issued by the company two weeks ago "sort of set the stage" for comments made by Mr. Calandra on the national Web site that fuelled much of the trading volume, said John MacDonald, vice-president, investor relations for Ivanhoe Energy, who is based in Texas.
"There's a lot of retail interest in the stock," he said. The press release, dated Aug. 12, provided an operational update of the company's activities and its exploration potential.
Ivanhoe Energy is only a tiny junior company, but it has big plans. It is engaged in conventional oil and gas exploration, as well as enhanced oil recovery. It is also promoting technology for developing natural- gas-to-liquid projects.
The company produces oil and gas in Texas and California and at a pilot test facility in China. A proposed exploration program in China is estimated to require expenditures of about $185-million over a three-year period.
During the six months ended June 30, 2003, Ivanhoe Energy had revenue of $4.9-million, compared with $3.7-million a year earlier. It had a loss of $5.5-million or 4 cents a share, which included a $3.3-million writedown on an investment, during the first half of 2003. The loss in the first half of 2002 was $2.6-million or 2 cents a share.
Ivanhoe Energy said that under an "alliance agreement," China International Trust & Investment Corp., a Chinese state-owned enterprise, has agreed to help its subsidiary Sunwing Energy Ltd. of Bermuda to raise "its profile in Asian capital markets and [gain] access to future financing opportunities." Under the agreement, the two companies will seek out oil and gas projects in China and around the world, Ivanhoe Energy said.
However, the only analyst following Ivanhoe Energy is Frank Bracken with Jefferies & Co. Inc., a Los Angeles broker-dealer. In a May 19 report, Ivanhoe was simply listed by Jefferies as a "buy" at 62 cents a share in a list of other energy companies.
Mr. Bracken was not available for comment.
According to Reuters Research, no major reports have been published by a major investment dealer on the company within the past six months.
The move in the shares comes only a month after Ivanhoe Energy completed a $3-million private placement of three million special warrants to an unnamed institutional purchaser. The special warrants consisted of three million common shares and three million warrants.
A finders' fee of $90,000 was paid to Granite Financial Group Inc. of San Diego, Calif., for introducing Ivanhoe Energy to the purchaser, according to a prospectus dated July 25. The warrants were issued on July 3.
"The purchaser has represented and warranted in the subscription agreement that it is acquiring the special warrants and the underlying common shares and purchase warrants for investment purposes only and not with a view to immediate resale or distribution," Ivanhoe Energy said.
At the time the final prospectus was issued, the shares of Ivanhoe Energy were selling at $1.20 (Canadian) a share.
With every two warrants issued, the holder will be able to acquire an additional common share of Ivanhoe Energy at $1 (U.S.) a share until July 3, 2004, and $1.10 until July 3, 2005.
Ivanhoe Energy was named 888 China Holdings Ltd. in 1995, Black Sea Energy Ltd. in 1996, and given its present name in mid-1999. |
