MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, APRIL 9, 1998 (5)
MARKET ACTIVITY
In the U.S., big oil stocks were higher, with Chevron (CHV), Mobil (MOB), and Royal Dutch Shell (RD) all up at least $1, helping lift the AMEX Oil Index (XOI) up 3.83 to 477.04.
Oil service and drilling stocks, however, tumbled, sending the Philadelphia Oil Service Index (OSX) down 1.78 to 107.89. More than $1 declines were suffered by Cooper Cameron (RON), Camco International (CAM), and Diamond Offshore (DO).
The Toronto Stock Exchange 300 Composite Index gained 0.7% or 49.50 to 7620.64.
In comparison, the TSE Oil & Gas Composite Index gained 0.5% or 6617.18. The sub-components were mixed. The Integrated Oil's Index lost 0.3% or 26.74 to 8797.35. The Oil & Gas Producers Index gained 0.8% or 46.05 to 5892.73. The Oil & Gas Services Index gained 0.5% or 16.02 to 3231.45.
Ranger Oil, Newport Petroleum, Anderson Exploration, Renaissance Energy, Pinnacle Resources, Berkley Petroleum, Petro-Canada, Gulf Canada Resources, TriGas Exploration, Alberta Energy, Canadian Natural Resources, Petromet Resources and Beau Canada Exploration were among the top 50 most active traded issues on ther TSE.
Anderson Exploration gained $1.10 to $18.45, Remington Petroleum $1.10 to $18.50 and Seven Seas Petroleum $0.70 to $23.95.
Percentage gainers included Founders Energy 12.4% to $1.00, Renata Resources 9.0% to $1.09, Summit Resources 7.6% to $4.95, Pendaires Petroleum 6.7% to $8.00, Anderson Exploration 6.3% to $18.45 and Remington Energy 6.3% to $18.50.
On the downside, Imperial Oil fell $0.60 to $78.00, Paramount Resources $0.50 to $16.00, Denbury Resources $0.40 to $23.60, Rio Alto Exploration $0.40 to $17.00and Canrise Resources $0.35 to $5.30.
Percentage losers included Real Resources 9.5% to $0.95, Tusk Energy 8.3% to $1.65, Jet Energy 8.2% to $2.25, Canrise Resources 6.2% to $5.30 and Richland Petroleum 4.3% to $3.35.
In review of service companies, none were to listed among the top 50 most active traded issues on the TSE.
None appeared among the top 50 net gainers.
Peak Energy gained 15.6% to $4.00 and Inter-Tech Drilling 9.3% to $1.53.
On the downside, Enerflex Systems fell $0.50 to $43.00.
Percentage losers included Geophysical Micro 9.1% to $1.00.
Over on the Alberta Stock Exchange, First Star Energy, ICE Drilling, Parkcrest Exploration, Alta Pacific Capital, Corridor Resources, Destiny Resource Services, HEGCO Canada, Hyduke Capital Resources, Scimitar Hydrocarbons, Dalton Resources, Bearcat Exploration, Raptor Capital and Loon Energy were among the top 25 most active traded issues.
Solid Resources gained $0.30 to $6.60, Mera Petroleum $0.20 to $0.60, DelMar Energy $0.18 to $0.50, HEGCO Canada $0.15 to $2.70, Progress Energy A $0.15 to $2.40, Parkcrest Exploration $0.12 to $1.27 and Invader Exploration $0.1 to $.90.
On the downside, Loon Energy fell $0.13 to $0.27, Maxwell Oil & Gas $0.12 to $1.00, Colt Energy $0.11 to $0.81, Belfast Petroleum $0.10 to $3.15, Red Sea Oil $0.10 to $2.85 and Stellarton Energy $0.10 to
$4.10.
EXCHANGE DOINGS
Canadian 88 Energy Corp. (TSE/EEE) commenced trading of its common shares on the American Stock Exchange Tuesday, April 7, 1998.
"It's an exciting time for our company and we expect today's listing on the Amex to bring increased visibility in the U.S. markets," said Greg Noval, President and CEO of Canadian 88 Energy Corp. "We are pleased to join the family of energy companies that are listed on the American Stock Exchange."
Canadian 88 Energy Corp. based in Calgary, Alberta, is actively engaged in the exploration, development, production and processing of natural gas in Western Canada. The company utilizes a broad range of advanced technology in it activities, including deep foothills conventional and horizontal drilling techniques and 2-D and 3-D seismic applications which it employs in the Western Canada Sedimentary Basin.
Canadian 88's activities are primarily concentrated within core operating areas in the foothills of West Central Alberta where the company is the leading deep basin driller in Canada. The company maintains a large inventory of high working interest prospects on extensive undeveloped land holdings in Western Canada with an average working interest of 90 percent. Canadian 88's primary areas of operation currently include high impact exploration and development natural gas plays in the Waterton, Caroline/Chedderville, Wildcat Hills and Ricinus/Strachan areas. In addition, the company's Olds/Crossfield property is one of the premier deep natural gas developments in Western Canada.
Trading under the ticker symbol EEE, the stock opened at 5 1/4 (U.S. $), trading 142,000 shares on its first day of trading.
RESEARCH NOTES
Gordon Capital
Canadian Occidental Petroleum
(CXY-T: $28.80) BUY - Yemen Farm-in Expands Exploration Acreage
The company has announced a major farm-in with Kerr-McGee in Yemen, where CXY will earn a 43.75% working interest in the 2 million acre block 51 immediately adjacent to its existing Masila block, and 47.5% working interest in the 8 million acre block 50 located north of the Masila block. This farm-in significantly increases CXY's exploratory land position in Yemen where the company is aggressively increasing its activity this year. Last year, CXY spent $31 million and drilled 12 development wells and 2 exploratory wells in Yemen. Activity this year will include spending more than $100 million and drilling 30+ wells, increasing to at least 40 wells in 1999. The first exploratory well on block 51 is expected to spud during the summer. In other areas the company has completed a farm-in on a significant acreage position in the deep water region of the Gulf of Mexico where it is partnered with Unocal and Shell, and the company is in the final stages of negotiating a farm-in on Elf's acreage position offshore Nigeria. While oil levered companies are not currently in vogue in the marketplace, we believe CXY offers investors a substantial asset base that has excellent potential to deliver solid growth, and a higher risk, higher reward exploration program that could significantly add to its asset base. While first quarter results will be weak, reflecting low oil prices (approximately $1.10 per share versus $1.59 per share last year), we are maintaining our BUY recommendation with a target price of $35 per share.
Alberta Energy
(AEC-T: $35.00) SELL - Weak Q1 Highlights Industry's Woes
Alberta Energy reported first quarter fully diluted cash flow of $0.92 per share versus $1.41 per share last year. While production volumes were in line with our expectations, the story in the first quarter was clearly commodity prices which will be a recurring theme as results are released by the oil industry ovethe next few weeks. AEC's average commodity prices for the first quarter of 1998 versus 1997 are as follows; Natural Gas down 9% to $1.91from $2.10, Cdn. Conventional Oil, down 52% to $11.86 from $24.69, Syncrude Synthetic, down 52% to $21.76 from $30.13 and Natural Gas Liquids, down 22% to $20.15 from $26.05.
The shares of AEC have been perceived as natural gas leveraged and as a result increased 28% during the first quarter and, at current prices, are trading in excess of 7.0 times our estimate of this years cash flow. While the company has significant natural gas assets, it also has a large crude oil exposure, particularly through its interest in the Syncrude synthetic oil plant. The company offers investors a balanced asset portfolio that, in addition to natural gas, includes heavy oil, conventional light oil, synthetic oil, natural gas liquids, natural gas storage facilities, and oil pipelines. We believe that the share price is ahead of the existing fundamentals and continue to recommend that investors reduce positions.
To maintain exposure to the natural gas we would recommend a switch into Poco Petroleums (POC-T:$16.00, BUY), which currently trades at a multiple of only 5.4 times this years cash flow. Our target price on AEC remains $30 per share, reflecting a price to cash flow multiple of 6.0 times our 1998 cash flow estimate of $4.85 per share.
EARNINGS
Trican Well Service / Spec 20 Listed
Message 4025251
Chieftain International, Inc. / Kerm's Watchlist
Message 4025280
Interaction Resources Ltd.
Message 4021263
Bow Valley Resources
Message 4025455
|
