MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING WEDNESDAY, APRIL 8, 1998 (8)
MARKET ACTIVITY
The Toronto Stock Exchange Composite 300 Index fell 0.1% or 8.65 to 7571.14.
In comparison, the TSE Oil & Gas Composite Index fell 0.3% or 18.7 to 6646.56. The sub-components were mixed. The Integrated Oil's fell 1.3% or 118.00 to 8824.09. The Oil & Gas Producers fell 0.1% or 3.30 to 5846.68. The Oil & Gas Services climbed 1.4% or 42.76 to 3215.43.
Renaissance Energy, Canrise Resources, Pinnacle Resources, Compton Petroleum and Ranger Oil were among the top 50 most active traded issues on the TSE.
Paramount Resources gained $1.10 to $16.50, Chieftain International $1.05 to $34.85, Tri Link Resources $0.90 to $15.20, Denbury Resources $0.75 to $24.0, SevenSeas Petroleum $0.75 to $23.25 and PanCanadian Petroleum $0.55 to $23.90.
On the downside, Amber Energy fell $0.85 to $16.5, Ulster Petroleum $0.80 to $11.60, Suncor Energy $0.70 to $51.50 and Petro-Canada $0.55 to $25.65.
The only service company listed among the top 50 most active traded issues on the TSE wasTetonka Drilling.
Shaw Industries A gained $1.30 to $52.40, Enerflex Systems $1.00 to $43.50, Enertec Resource Services $0.95 to $8.70, Precision Drilling $0.95 to $31.30 and Canadin Fracmaster $0.55 to $23.90.
On the downside, ATCO I fell $0.75 to $34.25.
Over on the Alberta Stock Exchange, First Star Energy, ICE Drilling, Dalton Resources, Parkcrest Exploration, Cirque Energy, Oilexco, AltaPacific Capital, Colt Energy, Circle Energy and Goper Oil & Gas were among the top 25 most active traded issues.
Belfast Petroleum gained $0.25 to $3.25, Northline Energy $.15 to $1.10, ICE Drilling $0.10 to $0.80, Underbalanced Drilling $0.10 to $2.65 and Vintage Petroleum $0.10 to $1.1.
On the downside, HEGCO Canada fell $0.25 to $2.55, Hyduke Capital Resources $0.11 to $2.05 and AltaQuest Energy $0.10 to $3.30.
RESEARCH NOTES
Gordon Capital
Natural Gas Prices Strong
Spot natural gas prices in Alberta are currently very strong. With closing prices yesterday of C$2.30/mcf at AECO and C$2.60/mcf at Empress, these prices are, in aggregate, 22% higher than a year ago and 95% higher than two years ago. This is in spite of the fact that storage levels in western Canada are dramatically above last year's levels. Presently, Canadian gas storage is approximately 157 bcf compared to 55 bcf this time last year. This represents 42% of capacity whereas at this time last year Canadian gas storage was down to only 12% of capacity. Over the past decade, 1994 was the only year that Canadian wellhead gas prices averaged over C$2.00/mcf. In the U.S., NYMEX gas prices are also showing considerable strength for this time of year notwithstanding the fact that U.S. storage levels are up 21% over last year. Currently, the NYMEX Henry Hub spot is at US $2.67/mcf. However, Canadian gas prices have greatly closed the gap on U.S. pricing, with a current differential of only C $1.19/mcf. This is approaching the pipeline tariff between the two markets. We remain cautiously optimistic about Canadian gas pricing. We are still maintaining our gas price forecast of C$1.80/mcf in 1998 and C$2.00/mcf in 1999.
Among the gas leveraged companies, Gordon rates Anderson Exploration ($17.30 - AXL/TSE - 61% Gas) a BUY with a price target of $19.00; Poco Petroleums ($16.35 - POC/TSE - 56% Gas) a BUY with a price target of $20.00; Berkley Petroleum (BKP/TSE - 64% Gas) a BUY with a price target of $17.00; Rio Alto Exploration (RAX/TSE - 93% Gas) a BUY with a price target of $20.00; Blue Range Resources (BBR.a/TSE - 8% Gas) a BUY with a price target of $11.50.
Companies rating a HOLD status included Canadian 88 Energy, Newport Petroleum, Chieftain International and Barrington Petroleum.
EXCHANGE DOINGS
Canadian Fracmaster Ltd. announced that its common shares began trading on the New York Stock Exchange today under the symbol FMA. Listing of the common shares on the New York Stock Exchange does not include listing of the instalment receipts of the Corporation at this time. Upon payment of the final instalment on or before September 9, 1998, holders of such instalment receipts will receive a common share for each fully paid instalment receipt. Those common shares will then be permitted to trade on the New York Stock Exchange.
''The Company's shareholder base has changed such that there is now a significant holding of U.S. shareholders. Furthermore, international focus makes listing on this exchange a natural fit with the potential to increase the investor base and provide greater liquidity in our shares. We are proud to be a part of the New York Stock Exchange.'' said Mr. Les Margetak, President and Chief Executive Officer of Canadian Fracmaster Ltd.
''Canadian Fracmaster represents the type of high-quality company that we like to attract to the NYSE,'' said Richard A. Grasso chairman and chief executive officer of the Exchange. ''Canadian Fracmaster, as a leader in providing highly reliable and innovative services and technologies to the oil and gas industry, will join the more than 3,000 NYSE-listed companies that meet our high listing standards.''
Effective as of today, the trading symbol for the common shares and instalment receipts of Canadian Fracmaster Ltd. on the Toronto and Montreal Stock Exchanges will change from CFC and CFC.IR respectively to FMA and FMA.IR. As a result, the same trading symbols will be used for all stock exchanges on which the common shares and instalment receipts of the Corporation are listed.
Canadian Fracmaster Ltd. is an international oil and gas service and production company, which is listed on the New York Stock Exchange, the Toronto Stock Exchange and the Montreal Exchange and trades under the symbol ''FMA''.
EARNINGS
Alberta Energy Co.
Message 4007388
Wenzel Downhole Tools Ltd
Message 4007680
Optima Petroleum Corporation
Message 4007432
Torex Resources Inc.
Message 3992191
Wolverine Energy Corp.
Message 3992228
Brittany Energy Inc.
Message 3992258
BXL Energy Ltd.
Message 3992694
MISC.
No Help For Oilers From Plants
Fort McMurray Today
The Edmonton Oilers won't be getting any help from Fort McMurray's oilsands plants, and that appears to be fine with the people who work there.
"That came up during an employee forum and it became clear our people understand our primary business is oil, not sports, and that was the end of it," said Syncrude Canada spokesman Peter Marshall.
"We have our hands full with that, and the expansion we have underway. We have a very active community support program, but its priorities are education and social programs, and Fort McMurray is the largest benefactor in that regard."
Suncor Energy executive vice-president Mike Ashar said he hasn't heard from any employees who'd like the company to help keep the Oil in Edmonton. "We were approached by a group of Edmonton businesses about the Oilers, and we have a corporate policy which prevents us from investing in that kind of a venture.
"We support a lot of community initiatives, but our priorities are education, the environment and social activities. I suspect people (working for Suncor) want the Oilers to stay, but it comes down to how much and what you're willing to pay."
Cal Nichols, the frontman for the group of Oilers investors, made the pitch to about 10 oil companies in Alberta to have their logos placed on the Coliseum, and rename the rink the Petroleum Place in exchange for cash.
The companies have all given the Oilers a flat no, except for Husky, which has business ties to Nichols' own Gasland chain of fuel stations.
Both Ashar and Marshall said geography likely plays a part in why oil companies have declined the team's request for help. "This is just my own opinion and I'm being a little bit facetious, but if you look at location, most of the oil companies are in Calgary, so their loyalties might be with another team," Marshall said.
"I suspect if we were based in Edmonton it'd be a slightly different story," Ashar said in regards to his employees' feelings on the issue.
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