MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WED DECEMBER 17, 1997 (4)
INDEXES
The Toronto 300 Index gained 0.9% or 58.06 to 6625.49.
In comparison, the Oil & Gas Composite Index also rose - almost double the Toronto 300 performance. The index was up 1.7% or 109.30 to 6480.83. Among the sub-components, the Integrated Oils gained 1.4% or 126.90 to 8936.07. The Oil & Gas Services rose 1.1% or 33.75 to 2978.18. And for the first time in ages, the most influential group was the Oil & Gas Producers - rising 1.9% or 105.89 to 5661.44.
INDEX CHARTS
TSE 300.............. chart.canada-stockwatch.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
MARKET ACTIVITY
Canadian Occidental Petroleum, Pan East Petroleum, Alberta Energy, Gulfstream Resources, Talisman Energy, Petro-Canada, Tarragon Oil & Gas, Canadian Natural Resources and Pacalta Resources were among the top 50 most active issues traded on the TSE.
Tri Link Resources gained $2.00 to $20.00, Gulfstream Resources $1.85 to $7.30, Suncor Energy $1.50 to $49.70, Seven Seas Petroleum $1.50 to $19.50, Canadian Natural Resources $1.20 to $30.65, Alberta Energy $1.10 to $27.30, Pinnacle Resources $1.00 to $18.40, Denbury Resources $0.95 to $26.85, Rio Alto Exploration $0.90 to $11.90 and Pacalta Resources $0.80 to $14.00.
Percentage gainers included Gulfstream Resources 33,9% to $7.30, Black Rock Ventures 11.7% to $1.34, Torex Resources 11.5% to $1.45 and Tri Link Resources 11.1% to $20.00.
On the downside, Chieftain International fell $0.55 to $29.25.
Percentage losers included OGY Petroleum 9.0% to $1.41, Seventh Energy A 7.0% to $1.06, Eurogas Corp. 5.7% to $1.65, International Petroleum 5.6% to $5.95, Comstate Resources 5.5% to $2.60 and Bitech Petroleum 5.0% to $3.80.
No new 52-week highs.
Blue Range Resources, Canadian Natural Resources, Palliser Energy, Pan East Petroleum, Poco Petroleums, Profco Resources, Search Energy and Tarragon Oil & Gas reached new 52-week lows.
In the oil and gas services sector, as well as those companies with close ties to the industry, Ensign Resource Services was among the top 50 most active issues traded on the TSE.
Dreco Energy Services gained $3.00 to $47.00 and Artisan Corp. $0.75 to $12.00.
No percentage gainers among the top 50.
On the downside, Shaw Industries slipped $0.70 to $45.50, Computalog $0.50 to $23.50, Enerflex Systems $0.50 to $32.50, IPSCO $0.50 to $56.00 and Plains Energy Services $0.50 to $9.50.
Percentage loser was Plains Energy Services, down 5.0% to $9.50.
No new 52-week highs or lows.
Over on the Alberta Stock Exchange, Lodestar Energy, Red Sea Oil, NTI Resources, Maxwell Oil & Gas, Cascade Oil & Gas, Colony Energy, Cubacan Exploration, HEGCO Canada, Jerez Energy, Real Resources, Wild Horse Resources and Oilexco were among the top 30 most active traded issues.
Best Pacific Resources gained $0.15 to $1.25, Maxwell Oil & Gas $0.15 to $1.25. Scarlet Exploration $0.15 to $1.20, HEGCO Canada $0.14 to $0.72, Capco Resources $0.10 to $4.10, Niko Resources $0.10 to $4.50, Esker Resources $0.09 to $0.44 and Jerez Energy $0.09 to $0.45.
Percentage gainers included Esker Resources 25.7% to $0.44, Jerez Energy 25.0% to $0.45, HEGCO Canada 24.1% to $0.72, Cherryhill Resources 14.3% to $0.40, Scarlet Exploration 14.3% to $1.20, Best Pacific Resources 13.6% to $1.25, Maxwell Oil & Gas 13.6% to $1.25 and OTATCO 12.9% to $0.35.
On the downside, Underbalanced Drilling fell $0.55 to $2.40, Granger Energy A $0.30 to $1.50, Red Sea Oil $0.30 to $2.35, Belfast Petroleum $0.25 to $2.55, Jett Investment $0.20 to $1.00, Parkcrest Exploration $0.15 to $1.45, Alberta Oil & Gas $0.10 to $0.90, Draig Energy $0.10 to $1.30, Golden Trend Petroleum $0.10 to $1.00, Invader Exploration $0.10 to $1.20, Peregrine Oil & Gas $0.10 to $0.90, Syner-Seismic Technologies $0.10 to $2.20, Anadime $0.09 to $0.90 and Colt Energy $0.08 to $1.37.
Percentage gainers included CDM Capital 20.0% to $0.40, Carpatsky Petroleum 20.0% to $0.20, Underbalanced Drilling 18.6% to $2.40, Granger Energy A 16.7% to $1.50, Jett Investment 16.7% to $1.00 and Red Sea Oil 11.3% to $2.35.
No new 52-week highs.
Adobe Resources, Capco Resources and Constellation Oil & Gas reached new 52-week lows.
HOT STOCKS
Gulfstream Resources Canada Ltd. (GUR/TSE), up $1.90 to $7.30, on volume of 728,120 shares. The company said it will double its 1996 dividend of 1› a share with payment of 2› on Dec. 31 to shareholders of record Dec. 19. It also said a Qatar consortium is advancing the oil development at Al-Rayyan. Yesterday's gain was a recovery from a recent low of $5.40 on Tuesday. Less that a week ago, Gulfstream stock lost one third of its value, falling to $6.55 on Dec. 11 from $9.80 the previous day.
In thre U.S., oil-drilling and equipment stocks were mixed as well. Losers were led by Nabors Industries (NBR), which slid 1 7/16 to 32 1/16, while Diamond Offshore (DO) jumped 1 3/4 to 47 3/4 at the other extreme.
KERM'S TOP 20 - SPEC 12 - SERV 7 COMPANIES IN THE NEWS
Qatar Oil Minister Says Keen To Supply Gas To Dubai
Qatar's oil minister said on Wednesday Doha was keen to supply natural gas to Dubai, as well as to other Gulf states, and that he hoped an agreement would be signed soon.
"We fully support the project and are very interested to supply gas to Dubai and other Gulf states but the project depends on the success of ARCO to sign sale agreements with customers," said Abdullah bin Hamad al-Attiyah.
Under a 25-year production sharing agreement signed in July, a consortium led by the Atlantic Richfield Co (ARCO) has the right to produce and market gas from part of the North Field.
The ARCO consortium comprises Wintershall AG, part of BASF AG , and Preussag Energie GmbH , British Gas Exploration and Production Ltd , and Gulfstream Resources Ltd of Cyprus, a subsidiary of GULFSTREAM RESOURCES CANADA.
Senior Dubai ruling family member Sheikh Ahmed bin Saeed al-Maktoum said in remarks published on Wednesday that the talks with Doha for a project to supply Dubai with Qatari gas via a marine pipeline were in their final stages.
He was quoted as saying the project would be commissioned as soon as prices had been decided.
Attiyah told reporters his ministry was giving full backing to the project and hoped an agreement would be "signed soon."
"If successful, this will be the first part of a plan to supply gas to Gulf states. In the next stage the Doha-Dubai pipeline may be extended to other states," he said.
At present Dubai gets its gas from neighbouring Sharjah and is also negotiating for further supplies from Abu Dhabi and Iran to meet growing demand in the next century.
Attiyah said the quantity of gas to be piped from Qatar "will depend on Dubai's requirement...we can supply any amount."
Executives have estimated the Doha-Dubai pipeline would cost around $1 billion and another $1 billion would be required to develop upstream facilities to produce gas at the North Field.
"The ARCO-led consortium will bear all costs as per the agreement," said Attiyah.
Besides ARCO, the consortium comprises Wintershall AG, part of BASF AG, and Preussag Energie GmbH , British Gas Exploration and Production Ltd , and Gulfstream Resources Ltd of Cyprus, a subsidiary of Gulfstream Resources Canada .
KERM'S WATCHLIST OF COMPANIES IN THE NEWS
CHIEFTAIN INTERNATIONAL INC. confirms the No. 2 well on South Marsh Island Block 39 has been drilled and cased as a successful oil and gas well. Electric logs and sidewall cores of the well have documented total net pay thickness of 245 feet, of which one zone comprised 160 feet. A short term production test, designed to confirm reservoir fluid content, was conducted on this zone and flowed light gravity crude oil at a rate of 850 bd and associated gas. Two other sands with 85 feet of net hydrocarbons were not tested. The 13,571 foot well was drilled to confirm the No. 1 well which was drilled on Block 39 earlier this year. A third well will be drilled to 14,550 feet to further delineate the field. Chieftain has a 50% interest in South Marsh Island 39 and Equitable Resources Energy Company has a 50% interest.
In addition, the Company confirmed that a long term production test has commenced from NC - 171 Block 5 in Libya in which Chieftain has a 12.5% interest in three oil wells.
NORTHSTAR ENERGY CORP. (NEN/TSE) announced that it has entered into a joint venture with Amoco Canada Petroleum Company Ltd. to explore and develop Amoco's natural gas properties in northeastern British Columbia. The agreement gives Northstar access to 648,000 acres of land with a total unrisked reserve potential of four trillion cubic feet. The area includes four different geological play types with high impact exploration potential and multiple prospects.
Northstar will commit $15 million in each of the next three years to the exploration program. This venture complements Northstar's existing exploration program and strengthens their asset base in western Canada."
Over the past several years, Amoco has studied the region extensively and has developed a large seismic and technical data base. Mr. Hagg said that "in addition to world class exploration lands, Northstar gains access to significant amounts of seismic data and advanced exploration technologies unique to the area." Activities are expected to commence shortly with two deep exploratory tests to be drilled this winter. Mr. Hagg went on to say that "Amoco will be the operator during the initial drilling phase and its strong relationships with local stakeholders will greatly benefit the joint venture activities in the region."
CABRE EXPLORATION LTD. (TSE:CBE. - news) Cabre Exploration (Cyprus) Limited (''Cabre'') a wholly-owned subsidiary of Cabre Exploration Ltd., is a 50 percent participant in the West Esh El Mallaha (''WEEM'') concession in Egypt. Cabre and Coplex (Egypt) Limited (''Coplex''), the other participant in WEEM, have made a declaration of commercial discovery to the Egyptian General Petroleum Corporation
(''EGPC''). Pursuant to an agreement with Coplex, Cabre has the right to operate production at the time of commerciality, which right has been exercised. Cabre and Coplex are currently pursuing with EGPC the creation of a joint Operating Company which is required to be established prior to commencing production. Cabre anticipates that the Operating Company will be established and production will be commenced during the first quarter of 1998, which will allow an assessment to be made of the level of sustained oil production which can be achieved from the Rabeh-1 and Rabeh East-1 wells.
Enserch Exploration has made a discovery with its first exploratory well drilled on Garden Banks Block 386 in the deepwater Gulf of Mexico. The Llano well was the first of a multi-prospect joint venture with Enterprise Oil to test Miocene-aged objectives beneath EEX's approximately 75 blocks leased in the deepwater Gulf of Mexico. EEX is operator of the Llano discovery with a 30% working interest. Partners include Enterprise Oil (30%), PANCANADIAN PETROLEUM (PCP/TSE) (20%) and Mobil (20%).
The well encountered a number of hydrocarbon bearing intervals located between depths of 23,000 feet and 25,340 feet. Drilling was suspended at a total measured depth of 25,342 feet prior to reaching the primary objective when the well reached equipment depth limitationsfor the semi-submersible rig on location. The well will be temporarily abandoned to evaluate recent enhancements provided by 3-D seismic processing and to explore appraisal and development options for the project area utilizing a larger drilling rig with greater depth capabilities.
''We are very encouraged by this success so early in our deepwater exploratioN program,'' said Tom Hamilton, Chairman and President, Chief Executive Officer. ''It is significant that this well contains hydrocarbon bearing sands similar to those encountered in the Auger area. This confirmation of our deepwater geologic model gives us great encouragement for the potential of our remaining inventory of prospects,'' Hamilton added. EEX will likely require an appraisal well to further define the areal extent and significance of this discovery in terms of reserve potential and commerciality.
OPAL ENERGY INC ('OPE/TSE) announced a number of developments. Opal's previously announced exit rate of 2000 boe/d has been reached. Current production is approximately 2100 boe/d. Substantial additional production will commence early in the new year as infrastructure and facilities are completed.
On the corporate front, Opal is pleased to announce the following four appointments. MR. WAYNE JESSEE, has been hired as the new Chief Operating Officer. Mr. Jessee has over twenty years of experience with small, medium and large companies covering all facets of the oil and gas sector. Most recently he was the Vice President Corporate Development and Marketing at Dorset Exploration Ltd. Opal has spent the better part of two years assembling a high quality technical team. From within, two promotions are being made. MR. ARNOLD AMES moves up from Exploration Manager to become Vice President Exploration. Mr. Ames is a geologist who graduated from the University of Toronto in 1975. MR. GUY NOWLIN now is the Vice President of Engineering. Finally, MR. TERRY OWEN has agreed to become a member of the Company's Board of Directors. Mr. Owen, formerly a partner at the law firm Macleod Dixon, is the Chief Financial Officer of Trimac Corporation.
WINDSOR ENERGY CORP. (TSE:WNS - news) announced Wednesday that well number 24 at Rincon Island had come on stream with an initial production of 425 barrels of oil and 350 mcf of gas.
''We believe that we will meet or exceed all our production objectives for 1997'', Hogan said. ''We also, most importantly have achieved our cost priority of getting our lifting cost under U.S. $3.50 per barrel.'' Windsor, which announced record third quarter profits of $4.2 million, has drilling programs under way in Louisiana and Texas in addition to California. Initial results from those two states will be announced next week.
PRECISION DRILLING To Capitalize On New Gas Line
Drilling activity in Western Canada will continue at this year's record levels in 1998, particularly as oil and gas producers increase natural gas drilling to fill new pipelines, says the chief financial officer of Precision Drilling Corp.
Dale Tremblay said yesterday despite recent poor market performance in the sector in general, Precision's fleet - 203 drilling rigs or 38% of the industry's entire capacity - is fully booked for most of next year.
"[Financially], we think we are going to do better next year than this," he said.
That's because the Calgary-based oil services company will get higher utilization from its equipment - 15 drilling rigs were added midway through 1997 - and because higher day rates implemented in 1997 are expected to continue in 1998.
The oil services industry increased its rates across the board this year, capitalizing on a shortage of equipment and people.
Precision Drilling posted net income of $31.4 million for the second quarter ended Oct. 31 (75› a share), up from $10.3 million (37›) a year earlier. Revenue for the quarter was $255.4 million, up from $108.8 million last year.
Precision stock (PD/TSE) closed at $33.75 yesterday, down 5›. The stock hit a high of $49 on Oct. 10.
The company more than doubled its fleet this year through corporate acquisitions.
It drilled 3,300 wells during the first six months, up from 1,544 last year. Rig utilization rate rose to 70% during the same period, up from 55%.
It expects the industry to match this year's activity levels or, under the most conservative scenario, to cut back drilling by up to 4%.
ARTISAN CORPORATION (TSE/ADR) announced that it has signed letters of intent to acquire the assets of Continuous Tubing Ltd. and Pretec Energy Services Inc. Both companies are Alberta based and privately held. They have extensive experience in providing coiled tubing services to the oil and gas industry. Artisan expects both transactions to close on December 29, 1997.
Artisan will enter the coiled tubing business with a total of 11 coiled tubing units and employ all of the operational managers and field staff of Continuous Tubing and Pretec. Upon the successful integration of these acquisitions, Artisan intends to increase its presence in the coiled tubing business.
OTHER NEWS
Columbia Continues In The News
Rebels kill chopper crewman in Colombia oil zone
BOGOTA, Dec 17 - Leftist rebels fired on a civilian helicopter, killing one crew member and wounding another on Wednesday as it flew out technicians who had just completed repairs to a damaged oil pipeline in northeast Colombia Wednesday.
State-run oil company Ecopetrol said in statement that flight engineer Jorge Duarte died from a bullet to the head and that the chopper burst into flames before managing to land safely.
The Russian-built Mi-17 helicopter, owned by civilian aviation company Helicol, was transporting workers after they finished repairing the Cano Limon-Covenas pipeline, which was blown up Sunday by National Liberation Army (ELN) rebels for the 60th time this year.
Last week, ELN fighters killed two soldiers in the same part of Arauca province, about 40 miles (64 km) west of the 175,000 barrel per day Cano Limon field operated by U.S. oil giant Occidental Petroleum Corp (NYSE:OXY - news).
The Cuban-inspired ELN specializes in attacks on the country's oil infrastructure.
In a separate incident in southern Narino province Wednesday, two soldiers were killed by ''friendly fire'' when their army patrol accidentally clashed with another during counterinsurgency operations.
In southern Caqueta province, soldiers killed three Revolutionary Armed Forces of Colombia (FARC) guerrillas and successfully freed a kidnapped cattle rancher. A peasant and a policeman, meanwhile, died at the hands of FARC gunmen in attacks in eastern Casanare province.
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