MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING MONDAY, FEBRUARY 2, 1998 (6)
MARKET ACTIVITY
INDEXES
US. (yesterday's mid-day report)
The Oil Service Index (OSX) opened up, fell to a low of 96.22, and traded at 97.20 around 12 noon EST, still down 0.20. Other service and drilling stocks down are land-driller Patterson Energy (PTEN:Nasdaq), down 1/2 to 12 3/16, and offshore driller Diamond Offshore (DO:NYSE), down 7/16 to 44 3/16.
Still, some are managing to post gains today. On the up side are Transocean Offshore (RIG:NYSE), up 3.5%, or 1 3/8, to 41 1/8, Western Atlas (WAI:NYSE), up 3/16 to 62 1/2, and Marine Drilling (MDCO:Nasdaq), up 5/16 to 18 3/8.
CANADA
The Toronto Stock Exchange 300 Composite Index gained 1.1% or 71.18 to 6771.38. In comparison, the Oil & Gas Composite Index fell 0.5% or 31.11 to 6333.24.
Sub-components were mixed. The Integrated Oil's fell 0.8% or 69.46 to 8737.22 and the Oil & Gas Producers fell 0.5% or 28.09 to 5588.08. Reversing the trend, the oil & Gas services gained 0.8% or 21.60 to 2664.73.
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
CANADIAN MOST ACTIVE
First Calgary Petroleums, Petro-Canada, Beau Canada Exploration, Paragon Petroleum, Renaissance Energy, Gulf and Canada Resources were among the top 50 most active traded issues on the TSE.
There were no producers listed among the top 50 net gainers on the TSE.
Percentage gainers included Profco Resources 17.6% to $1.20, Calahoo Petroleum 11.1% to $1.00, Optima Petroleum 11.1% to $2.00, Eurogas Corp. 9.1% to $2.40, Purcell Energy 8.2% to $1.19, Crown Joule Exploration 7.7% to $1.40, Benson Petroleum 7.1% to $1.50 and Gulfstream Resources 7.1% to $7.55.
On the downside, Crestar Energy fell $1.35 to $21.90, Canadian Natural Resources $0.55 to $27.95, Remington Energy $0.50 to $19.00, Tri Link Resources $0.50 to $16.50 and Renaissance Energy $0.40 to $28.70.
Percentage losers included triumph Energy 10.7% to $2.50, Petromet Resources 10.1% to $3.10, OGY Petroleum 6.9% to $1.35, Crestar Energy 5.8% to $21.90, Tri Gas Exploration 5.0% to $0.95 and Merit Energy 4.9% to $4.85.
Calahoo Petroleum (new listing) gained a new 52-week high.
Ocelot Energy and Tiverton Petroleum reached new 52-week lows.
Service companies, as well as those with close ties to the industry, were absent from ther top 50 most active traded issues on the TSE.
IPSCO gained $1.00 to $56.50.
No percentage gainers.
On the downside, Shaw Industries A fell $1.00 to $44.00, CE Franklin $0.50 to $10.50, Dreco Energy Services $0.50 to $39.15, Mullen Transportation $0.50 to $20.50 and Enertec Resource Services $0.40 to $10.25.
Percentage losers included Bromley Marr 6.7% to $1.25 and Peak Energy 5.3% to $3.55.
Bromley Marr ( new listing ) reached a new 52-week high.
No new 52-week lows.
Over on the Alberta Stock Exchange, HEGCO Canada, Pason Systems, Storm Energy, Colt Energy, Bearcat Exploration, red Sea Oil, Redeco Energy, Cubacan Exploration, Tessex Energy, Doreal Energy, Esker Resources and Tappit Resources were among the top 50 most active traded issues.
HEGCO Canada gained $0.44 to $1.50, Corridor Resources $0.40 to $1.40, Canadian Crude Separators $0.25 to $4.55, Barra Resources $0.23 to $0.49, Pason Systems $0.20 to $7.00, Airgen A $0.17 to $0.77, Doreal Energy $0.15 to $1.65, Tappit Resources $0.14 to $0.55, Del Mar Energy $0.13 to $0.50, Master Downhole $0.12 to $1.22, Belfast Petroleum $0.10 to $2.40, Burner Exploration $0.10 to $0.90, Destiny Resource Services $0.10 to $3.00, Niko Resources $0.10 to $4.25,Red Sea Oil $0.10 to $3.50 and Texalta Petroleum $0.10 to $0.25.
Percentage gainers included Barra Resources 88.5% to $0.49, Texalta Petroleum 66.7% to $0.25, HEGCO Canada 41.5% to $1.50, Corridor Resources 40.0% to $1.40, Del Mar Energy 35.1% to $0.50, Tappit Resources 34.1% to $0.55, Airgen A 28.3% to $0.77, Kroes Energy 26.2% to $0.27, Monterrey Energy 18.2% to $0.26 and Gold Star Energy 17.1% to $0.48.
On the downside, Danoil Energy fell $0.13 to $1.47, CanBaikal Resources $0.12 to $1.35, Granger Energy $0.10 to $1.05, Hyduke Capital Resources $0.10 to $2.10, Pergrene Oil & Gas $0.10 to $0.90 and Colt Energy $0.07 to $1.45.
Percentage losers included Carpatsky Petroleum 13.8% to $0.25, Rockport Energy 12.0% to $0.22, Braegan Energy 10.0% to $0.45, Cubacan Exploration 10.0% to $0.54 and Pergrene Oil & Gas 10.0% to $0.90.
Corridor Resources, First Star Energy, HEGCO Canada and Willow Creek Energy reached new 52-week highs.
Blue Power Energy, Gopher Oil & Gas, redeco Energy and Wild Horse Resources reached neew 52-week lows.
An excellent summary of most actives covering all four of the Canadian Stock Exchanges can be found at quote.yahoo.com
U.S. MARKET ACTIVITY
Top Stories: E&P Companies and Major Oils Proving a Safer Haven in Patch
Mavis Scanlon N.Y. Times
If Monday's action is any indication, independent exploration and production (E&P) companies as well as major oils are the place to be in the oil patch.
Overall, independent E&P firms as well as the major integrateds held their ground better than drillers, onshore or off, and service companies on Monday. Apache (APA:NYSE) was up 7/16, or 1.3%, to 33 9/16, and Unocal (UCL:NYSE) ended up 3.1% to 35 7/16. On the major integrated side, Mobil (MOB:NYSE) gained 1 3/16 to close at 69 11/16 and Chevron (CHV:NYSE) rose 7/8, or 1.2%, to close at 75 5/8.
"I think the E&P's are among the more interesting companies out there," says David Stadlin, manager of Smith Barney Natural Resources fund. "My sense is that the more 'fast-money' guys in the service companies are basically out and now some guys are taking long hard looks at the E&P sector."
Still, all bets are off, at least until the current phase of the oil-for-food deal with Iraq is decided. This week the UN Security Council will begin discussing Secretary General Kofi Annan's proposal that Iraq be allowed to export as much $5.2 billion worth of oil over a six-month period -- a dollar figure that would put Iraq's production facilities pumping at near capacity levels of about two million barrels per day. Crude futures for March delivery closed Monday at $17.04, down 16 cents.
"I think a lot depends on how these talks in Iraq go. That's a big if," says Victor Yu, vice president at Refco, a commodities broker. "And you know we could find ourselves back in the same position" where we were at the end of last week, Yu added, referring to the threat of military action and a concomitant sector rally. But "as long as they're talking, there's not going to be any shooting, which has the markets on edge."
The threat of $15 or even $14 oil is still very much out there, as long as the perceived supply exceeds present demand. And yet, at the same time, investors contend that in the long run the world's energy demand coupled with the oilfield equipment shortage will bode well for the industry.
Those conflicting views played themselves out to the fullest Monday, as stocks in every niche of the sector were mixed. Among the deepwaters, for example, Falcon Drilling (FLC:NYSE) fell 4.5%, or 1 3/8, to 29, Diamond Offshore (DO:NYSE) fell 7/8 to 43 3/4, but Transocean Offshore (RIG:NYSE) gained 3/8 to close at 40 1/8.
Land drillers ended the day in mostly negative territory, but Nabors Industries (NBR:AMEX) closed up 5/16 at 24 1/4. The equipment makers fared similarly: National Oilwell (NOI:NYSE), which reported strong earnings Monday, rose 11/16 to 27 3/16, but Maverick Tube (MAVK:Nasdaq) lost 1/16 to close at 21 3/4.
In what is always viewed as a negative for the entire sector, Schlumberger (SLB:NYSE) closed down 3/8, at 73 5/16.
Asia Cheer Can't Overcome Iraq Blues for Most Drillers
Mavis Scanlon N.Y. Times
What's keeping most oil service and drilling stocks from participating in the market's broad-based rally Monday? Fear of 2 million more barrels of oil per day pumped into the world market at a time when demand is slowing.
That's about what Iraq may be allowed to export under the current phase of its oil-for-food deal with the United Nations if Secretary General Kofi Annan's recommendation is passedby the U.N. Security Council, a process expected to take at least two weeks of negotiation. The possibility of more oil on the market, combined with Iraq's agreement to accept Turkish intervention to help ease the weapon inspection crisis, put downward pressure on crude prices at the open.
The pressure follows a weak close in crude futures Friday. "No one wants to go home long," says Victor Yu, vice president at Refco Inc. "Their view is the market is still not favorable." Crude futures for March dropped to a low of $16.70 in morning trading before climbing back to $16.99, down 21 cents.
Before any big move can be made in the oil service sector, investors will need to see oil prices come back up, says Erik Gustafson, portfolio manager of the Stein Roe Growth Stock fund. He is limiting himself to selective buying on these down days, and today is adding slightly to his position in Schlumberger (SLB:NYSE), down 5/16 at 73 3/8. Other investors may be following a similar pattern, or are just plain uncertain about whether to jump in.
EXCHANGE DOINGS
PROGRESS ENERGY LTD. announced that our Class A and Class B shares commenced trading on The Alberta Stock Exchange. Progress also announces that on December 30, 1997 we completed our initial public offering of units of Class A and B shares. Each unit consisted of 200 Class A shares and 90 Class B shares. 13,010 units were sold for gross proceeds to Progress of $13,010,000. Jennings Capital Inc. acted as agent for the offering. Progress Energy is an oil and gas company that was recently formed to participate in oil and gas exploration and development in Canada. Progress currently produces 360 barrels of light sweet oil per day from our core properties in southeast Saskatchewan and southwest Manitoba.
CALAHOO PETROLEUM shares have been approved for trading on the Toronto Stock Exchange effective immediately and, in conjunction, have delisted it's common shares from the Alberta Stock Exchange. Calahoo will continue to trade under the symbol "CLX".
The American Stock Exchange today announced it will trade options of SEVEN SEAS PETROLEUM INC. (AMEX:SEV) beginning Friday, February 6. Seven Seas Petroleum Inc., based in Houston, Texas, develops and explores oil and gas reserves internationally. SEV will open with strike prices of 15, 17 1/2 and 20, with position limits of 4,500 contracts. Initial expiration months will be February, March, June and September of 1998. The specialist unit for the new options will be Spear, Leeds & Kellogg.
Coverage for today ends at this point. Tomorrow I will pick up on individual company coverage and thereafter should be back in a routinely fashion.
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