MARKET ACTIVITY / TRADING NOTES FOR DAY ENDING MONDAY, MAY 11 1998 (5)
MARKET ACTIVITY
The Toronto Stock Exchange 300 Composite Index gained 0.3% or 21.46 to 7720.70.
In comparison, the TSE Oil & Gas Composite Index gained only 0.1% or 6.38 to 6568.54, whose gain was limited due to the heavyweight Oil & Gas Producers group who lost 0.2% or 10.98 to 5766.30. The Integrated Oil's gained 0.5% or 44.05 to 8795.33 and the Oil & Gas Service Index gained 0.9% or 26.84 to 3145.65.
Petro-Canada, Carmanah Resources, Abacan Resources, Rio Alto Exploration, Renata Resources, Baytex Energy, Alberta Energy, Pacalta Energy and Westfort Energy were among the top 50 most active traded issues on the TSE.
Suncor Energy gained $0.80 to $54.90, Canadian Occidental Petroleum $0.65 to $31.50, Morrison Middlefield $0.65 to $9.65 and Imperial Oil $0.55 to $80.05.
Percentage gainers included Black Sea Energy 10.0% to $1.10, Morrison Middlefield 7.2% to $9.65, Crowne Joule Exploration 6.7% to $1.60, Canada Soutern Petroleum 6.3% to $8.50, Pan East Petroleum 6.3% to $2.55 and Danoil Energy 4.3% to $1.20.
On the downside, Carmanah Resources fell $2.30 to $4.70, Seven Seas Petroleum $1.00 to $23.00, Canadian Natural Resources $0.50 to $28.25 and Denbury Resources $0.50 to $23.50.
Percentage losers included Carmanah Resources 32.9% to $4.70, International Rochester 11.7% to $1.28, Abacan Resources 10.7% to $1.25, Best Pacific Resources 10.3% to $1.05, TransGlobe Energy 9.1% to $1.08, Phoenix Canada Oil 8.8% to $1.46, Bow Valley Energy 7.4% to $1.25, Jet Energy 7.0% to $2.00, ML Cass Petroleum 7.0% to $1.07 and Eurogas Corp. 5.3% to $1.08.
There were no service companies listed among the top 50 most active traded issues on the TSE.
Shaw Industries A gained $1.25 to $54.75, Ensign Resource Services $0.75 to $32.00, Computalog $0.55 to $24.05 and Precision Drilling $0.55 to $34.30.
Percentage gainers included Pason Systems 6.5% to $8.15, Trican Well Service 5.2% to $6.05 and Pe Ben Oilfield 5.0% to $3.78.
On the downside, Enerflex Systems fell $1.00 to $44.00.
Percentage losers included Bromley Marr 10.0% to $0.90, Bonus Resource Services 8.4% to $4.90 and Canadian Crude Separators 5.3% to $4.50.
Over on the Alberta Stock Exchange, Anvil Resources, First Star Energy, Scimitar Hydrocarbons, ICE Drilling, HEGCO Canada and Cirque Energy were among the 25 most active issues.
Anvil Resources gained $0.27 to $1.32, Avid Oil & Gas $0.15 to $1.45, Redeco Energy $0.15 to $0.40, Danoil Energy $0.10 to $1.15, Hyduke Capital Resources $0.10 to $2.70 and Solid Resources $0.10 to $7.10.
On the downsside, Brandon Energy fell $0.22 to $0.18, Corridor Resources $0.20 to $1.70, Total Energy Services $0.15 to $2.45, Landhawk Petroleum $0.14 to $0.06, Airgen $0.11 to $0.35, Corlac Oilfield $0.10 to $0.60, Coachlight Resources $0.10 to $0.40, Derrick Energy $0.10 to $1.80, Draig Energy $0.10 to $1.50, Endless Energy $0.10 to $0.80, Moxie Petroleum $0.10 to $1.90 and Veteran Resources $0.10 to $0.60.
Corp. - Exchange Related
Cirque Energy Ltd (CIQ/ASE) announced that its common shares have been consolidated on a 4 for 1 basis and its corporate name has been changed to Cirque Energy Corp. This restructuring was voted on and approved at a Special Meeting of Shareholders held April 7, 1998. Cirque's common shares that trade on the Alberta Stock Exchange will commence trading on a consolidated basis on May 12, 1998. The trading symbol for Cirque's common shares will be changed to ''CQU''.
The NASDAQ Stock Exchange began trading the consolidated stock of Cirque Energy Corp. on May 11, 1998. The ticker symbol on the NASDAQ will be ''CIRFD'' for a period of twenty (20) days after which the ticker symbol will return to the present symbol of ''CIRQF
Abacan Resource Corporation (ABC/TSE - NASDAQ/ABACF) at the request of The Toronto Stock Exchange, addressed certain published information and rumours that have recently been brought to the attention of the Corporation and to provide an update on the Corporation's activities.
Former President, Wade Cherwayko's recent filing to sell 1,489,000 common shares of the Corporation was part of a previously announced larger transaction whereby the Corporation issued 1,489,000 common shares to Optimum Petroleum Company Limited to secure a participating interest in oil concession block 310, located offshore Nigeria. Following the transaction, Mr. Cherwayko's holdings of the Corporation's common shares remains unchanged.
Mr. Timothy Stephens, President and CEO of the Corporation, together with the Board of Directors are continuing their efforts to restructure the Corporation, following which the Corporation will focus its efforts on numerous exploration activities in western Nigeria, Benin and elsewhere in West Africa.
Consequently, the Corporation is in preliminary negotiations to sell its existing production assets. If successful, the sale proceeds will be used to reduce the Corporation's current debt.
On the exploration front, the Corporation intends to retain the "deep" rights in the IMA Field and intends to drill a deep well by mid-summer, to be funded by the proceeds of insurance claims related to the IMA #9 well.
In addition, the Corporation, along with a major gas production company, is advancing its gas and power generation proposal in the Benin Republic. Discussions with potential partners on the Corporation's other concession blocks are also ongoing with several parties.
Fund Activities
Trican Well Service Ltd. shares ave been purcased by R. Chaney & Partners III L.P. and R. Chaney & Partners IV L.P. of Houston, Texas. As a result of additional market purchases on The Toronto Stock Exchange and the exercise of previously issued special warrants, they now on a combined basis exercise control and direction over 1,619,800 common shares of Trican Well Service Ltd. representing approximately 14.5 percent of the issued and outstanding shares of Trican.
Institutional
Gordon Capital
Courage Energy
(CEO-T: $2.65) BUY
Update On Exploration Leads
Courage is an exploration oriented junior oil and gas producer, with a current market capitalization of $65 million. The company has four important exploration leads;
1. Newton, U.K. Courage has a 50% interest in an onshore discovery well which has the potential to be a 500 bbls/d producer. The well has only been drill stem tested (DST) to date. The company expects to have a service rig on the well for a production test in early June. The well encountered four prospective sands, of which only two were DST'd.
2. Beatton, Northeast B.C. Courage has 100% of a well which tested 3 mmcf/d from a 4 meter Gething pay zone. There is also a Halfway gas zone. This discovery measures 7-8 sections in ariel extent, and could lead to the drilling of 10 wells in total, with the potential to add 50 bcf in new reserves.
3. Red Creek, Northeast B.C. Courage has a 100% interest in a Belloy and Halfway natural gas prospect which could potentially measure 50-100 bcf. The company will spend an estimated $750,000 to drill this prospect, which lies at a 2,400 meter depth. The well will spud within two weeks.
4. Leduc, Alta. Courage has plans to produce its discovery, offsetting Probe Exploration's operations. This will add 7 mmcf/d in gas production to Courage by this November.
Courage is currently producing 2,300 boe/d, with an additional 1,300 boe/d "behind pipe". We are forecasting a 1998 exit rate of 3,600 boe/d. Using this rate as an average in 1999, this would generate CFPS of $0.50 in 1999, up from a forecasted $0.35 for this year. Should this company's exploratory leads materialize successfully, it is conceivable that production could reach the 5,000 boe/d level during 1999, generating annualized CFPS of $0.75.
The company is currently budgeting capital expenditures of $9.5 million, and has a debt/cash flow ratio of 1.0X. Our stock price target for now is $3.25.
Further exploration success would result in an increase in our target price to $4.00.
Pinnacle Resources
(PNN-T:$13.90) BUY
Q1 Results Meet Expectations
Pinnacle has reported Q1 CFPS of $0.55 vs. $0.80, in line with our expectations. Oil production has grown 163% to over 29,000 bbls/d, while gas output is up 46% to 123 mmcf/d.
We are forecasting average production for 1998 of 33,000 bbls/d and 145 mmcf/d, as well as a fully diluted CFPS of $2.85. Our 12-month stock price target is $20.00.
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