MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WED., JANUARY 7, 1998 (3)
INDEXES
The Toronto 300 Composite Index fell 1.0% or 65.65 to 6590.61.
In comparison, the Oil & Gas Composite Index lost 1.4% or 88.65 to 6049.66. The Integrated Oils outperformed the TSE 300 benchmark, losing only 0.1% to 83.93.62. On the other hand, the Oil & Gas Producers continued their steep downward movement, losing twice that of the TSE 300 benchmark, down 2.1% or 111.64 to 5286.29. The Oil & Gas Services fell 1.2% or 33.63 to 2709.87.
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
MOST ACTIVE STOCKS
Petro-Canada, Renaissance Energy, Orbit Oil & Gas, Paragon Petroleum, Anderson Exploration, Gulf Canada Resources, Canadian Natural Resources, Canadian Occidental Petroleum, Northstar Energy, Startech Energy, Pinnacle Resources and Probe Exploration were among thre top 50 most active traded issues on the TSE.
Petro-Canada gained $0.50 to $23.90, Paragon Petroleum $0.50 to $3.80 and Archer Resources $0.35 to $6.20.
Percentage gainers included Paragon Petroleum 15.2% to $3.80, Optima Petroleum 6.7% to $1.60, Archer Resources 6.0% to $6.20 and Orbit Oil & Gas 4.7% to $1.77.
On the downside, Remington Energy fell $1.80 to $21.50, Norcen Energy Resources $1.70 to $14.50, Pacalta Resources $1.10 to $14.40 and Shell Canada A $1.00 to $22.00.
Percentage losers included Canrise Resources 14.5% to $5.00, Westfort Energy 14.2% to $1.03, Bellator Exploration 13.5% to $1.60, Seventh Energy 12.5% to $1.05, Torrington Resources 12.4% to $3.90, Founders Energy 12.0% to $1.03, Zargon Oil & Gas 9.7% to $2.80, New Cache Energy 9.1% to $5.50, Benson Petroleum 7.8% to $1.30, Remington Energy 7.7% to $21.50 and Pan East Petroleum 7.2% to $1.29.
No new 52-week highs.
Black Sea Energy, Canrise Resources, Gulf Canada Resources, Merit Energy, New Cache Energy, Newquest Energy, PanCanadian Petroleum, Pinnacle Resources, Raider Resources, Renaissance Energy, Rigel Energy, Startech Energy, Tarragon Oil & Gas and Tri Link Resources reached new 52-week lows.
Among oil & gas service companies, as well as those with close ties to the industry, Artisan was among the top 50 most active traded on the TSE.
Dreco Energy Services climbed $4.75 to $46.00 and Precision Drilling $0.55 to $28.25.
Percentage gainers included Computer Modeling 16.0% to $1.45 and Dreco Energy Services 11.5% to $46.00.
On the downside, Enerflex Systems fell $3.00 to $29.50, Canadian Fracmaster $1.75 to $19.00, Computalog $1.50 to $21.50, Shaw Industries $1.40 to $45.10, Enertec Resources Services $1.00 to $12.00 and Plains Energy Services $1.00 to $10.00.
Percentage losers included 10.5% to $4.25, Enerflex Systems 9.2% to $29.50, Plains Energy Services 9.1% to $10.00, Canadian Fracmaster 8.4% to $19.00, Enertec Resource Services 7.7% to $12.00, Trican Well 7.7% to $4.80 and Badger Daylighting 7.3% to $5.10.
ATCO I reached a new 52-week high.
Peak Energy and Tetonka Drilling reached new 52-week lows.
Over on the Alberta Stock Exchange, NTI Resources, Trego Energy, Stampede Oils. Jerez Energy, Circle Energy, ICE Drilling, Tessex Energy, Parkcrest Exploration, Bearcat Exploration, BXL Energy, Gold Star Energy, Oxbow Exploration and Prize Energy were among the top 30 most active traded issues.
AltaQuest Energy gained $0.16 to $2.27, Goal Energy $0.11 to $0.28 and Extreme Energy $0.10 to $0.50.
Perceentage gainers included Goal Energy 64.7% to $0.28, Pheasantback 30.4% to $0.30, Extreme Energy 25.0% to $0.50, Ascot Energy Services 16.7% to $0.35 and Moiibus Resources 12.5% to $0.45.
On the downside, Capco Resources fell $0.95 to $2.05, Stellarton Energy $0.45 to $4.30, Granger Energy $0.30 to $1.20, Syner-Seis Tech $0.30 to $2.10, Venator Petroleum $0.30 to $1.50, Destiny Resource Services $0.19 to $2.81, Belfast Petroleum $0.15 to $2.75, Global Link Resources $0.15 to $1.05, Red Sea Oil $0.15 to $2.80, Solid Resources $0.15 to $8.00, Palmetto Resources $0.14 to $1.31 and Colony Energy $0.13 to $1.79.
Percentage losers included Capco Resources 31.7% to $2.05, Del Mar Energy 20.0% to $0.40, Granger Energy 20.0% to $1.20, NTI Resources 20.0% to $0.40, BXL Energy 18.2% to $0.45, Cascade Oil & Gas 17.5% to $0.33, Nycan Petroleum 16.7% to $0.25, Venator Petroleum 16.7% to $1.50, Global Link Resources 12.5% to $1.05, Syner-Seis Technologies 12.5% to $2.10, Temba Resources 11.8% to $0.30 and Belair Energy 10.7% to $0.50.
No new 52-week highs.
BXL Energy, Capco Resources, Commonwealth Energy, Granger Energy and Greyhawk Oil & Gas reached new 52-week lows.
HOT STOCKS
Renaissance Energy Ltd. (RES/TSE), down 25› to $26.50, on volume of 2.8 million shares. The slide continues for Renaissance shares, yet to recover from a 37% drop in fiscal 1997. Analysts point to drilling delays in June at the Webb area in southwest Saskatchewan, coupled with management's staunch refusal to buy oil to maintain production levels, as reasons for the decline. The company is also wrestling with industry-wide rising costs and depressed oil prices.
Gulf Canada Resources Ltd. (GOU/TSE), down 35› to $8.45, on volume of 1.3 million shares. Shell Canada Ltd. (SHC/TSE), down $1 to $22 on volume of 228,386 shares. The Toronto Stock Exchange oil and gas subindex slid another 88.65 points to 6049.66 after the price of crude oil remained trapped below US$17 a barrel.
Petro-Canada (PCA/TSE), up 50› to $23.90, on volume of 3.1 million shares. Despite sliding oil and gas prices the market displayed its approval for the Calgary based oil giant's plans to link with Ultramar Diamond Shamrock Corp. The pooling of $1 billion of refining and marketing assets is expected to yield after tax cost savings of $625 billion.
RESEARCH ALERTS
UBS SECURITIES
Exploration And Production Upped
UBS Securities said on Wednesday it raised its rating on the exploration and production copanies and recommended overweighting the group because valuations looked attractive.
-- Analyst Michael Barbis upgraded Burlington Resources Inc (NYSE:BR), Devon Energy Corp (AMEX:DVN), Enron Oil & Gas Co (NYSE:EOG), Newfield Exploration Co (NYSE:NFX) and Snyder Oil Corp (NYSE:SNY) to buy from hold.
-- ''The group is selling at a 21 percent discount to its historic multiple based on our reasonably conservative outlook for 1998 oil and gas prices,'' analyst Barbis said.
-- Believes exploration and production group has only five to 10 percent downside potential while might have 25 percent upside potential, he said.
-- Burlington up 3/16 to 41-5/8, Devon down 1-11/16 to 36-1/4, Newfield up 11/16 to 21-9/16, Snyder up 1/8 to 16-3/4 and Enron Oil up 1/8 to 19-3/4.
DONALDSON LUFKIN & JENRETTE
Enron Buy Reiterated
Donaldson Lufkin and Jenrette reiterated its recommended list buy rating on shares of Enron Corp, a market source said on Wednesday.
-- DLJ sees benefit from Enron's planned sale of its partial interest Enron Energy Services business unit to private market investors, source said.
-- Sale demonstrates that outsiders to the industry are willing to place value on the business, DLJ quoted as saying.
-- Also raises $130 million of capital for ongoing retail business plan, firm quoted as saying.
FIRST BOSTON
Anadarko, U.P. Resources Raised - Coverage Of USX-Marathon Re-Initiated
Credit Suisse First Boston said Wednesday it raised its ratings on Anadarko Petroleum Corp (NYSE:APC) and Union Pacific Resources Group Inc (NYSE:UPR) to strong buy from buy. Credit Suisse First Boston said it re-initiated coverage of USX-Marathon Group with a buy rating.
Oil Drillers Upgraded
Credit Suisse First Boston said it raised its ratings on Schlumberger Ltd [NYSE:SLB] and Smith International Inc [NYSE:SII] to buy from hold, and added Varco International Inc [NYSE:VRC] to its Focus List.
-- No further information on the upgrades was immediately available.
-- Varco's rating remained a buy.
GORDON CAPITAL
Canadian 88 Energy ($4.20) Hold
-- We are forecasting fully diluted cash flow per share of $0.40 in 1997. Our 1998 forecast is currently $0.67, however this is highly sensitive to the timing of two key projects; a pipeline at Waterton and increasing sour gas processing capacity at Old/Crossfield.
Petro-Canada (23.35) Buy
Downstream Joint Expands Petro-Canada Into U.S. Markets
-- The company has announced that it intends to form a significant downstream joint venture with Ultramar Corp. We view the transaction very positively and believe that it will allow Petro-Canada to sustain the significant gains that it has made in its downstream operations during the last few years and provides an excellent opportunity to expand upon them. We are maintaining our BUY recommendation.
MORGAN STANLEY
British Petroleum Raised
Morgan Stanley on Wednesday said it raised its rating on British Petroleum Plc (UK & Ireland: BP.L) to outperform from neutral.
TID BIT
A columnist writing about the downturn in mining operations in the NWT wrote the following. Enough bad news, what's this I hear about the northern extension of the "Foothills play?"
There is potential for several significant oil discoveries in the NWT as the Foothills play is followed North. The Foothills play in Canada is located on the eastern edge of the Rocky Mountains and extends from the U.S. border through Alberta, B.C. and into the Yukon and NWT.
This geological region has already yielded much larger reserves per pool than most of the developments elsewhere in the plains area of the Western Canada Sedimentary Basin. The foothill area is a belt of structurally deformed sedimentary deposits. Although the reserves are large, the targets are very deep, and therefore drilling costs are high. Further increasing costs are typically high acid gas content (increasing processing costs) and seismic acquisition costs are very high and difficult to interpret.
There are currently over 20 companies actively exploring targets in this geological system. However, given the price of oil and the cost of exploration, Northern targets will likely not be the first to be developed.
WORLD ANALYSTS
Analysts Firm On Hydro, Saga Despite Oil Slump
Norwegian oil companies Norsk Hydro ASA (NYSE:NHY - NHY.OL) and Saga Petroleum ASA (NYSE:SPMa - SAPOa.OL) look safe in the view of analysts despite a recent drop in oil prices to new 30-month lows.
A Reuters poll of 11 Norwegian and foreign analysts indicated that none had downgraded their views of either company since oil prices began to slide. Many said they believed the current crude price slump was temporary.
''In general on oil stocks I think one should regard this as a buying opportunity,'' said a London-based analyst.
''Everyone cuts their recommendations in the sector (on large crude price shifts) just as three months a go they thought $20 a barrel would hold. I think its better to go in the opposite direction to the trend right now.''
At 1320 GMT Norsk Hydro stood 3.6 percent down on the Oslo bourse at 336 crowns, while Saga Petroleum was trading 1.40 percent lower at 120.50 crowns.
Norsk Hydro's performance late last year was hit by a poor fertiliser sector and low aluminium prices.
Analysts already with ''hold'' or ''neutral'' recommendations said these would remain in place, although falling oil prices could impact results harder than before as the hydrocarbon division accounted for 60 percent of the group's total operating income in the first nine months 1997.
Two analysts saw a possible fall in Norsk Hydro's share to 300 crowns within the next three months.
''We think Hydro will have a tough 1998, but conditions look set to improve towards the end of the year,''an analyst at investment bank Merrill Lynch said.
"The chance of a short term surprise looks pretty limited."
Most analysts were upbeat on Saga Petroleum, Norway's largest listed oil company, saying the group's long-term fundamentals remained good.
''I don't think there's any downside on the share due to the oil price. Saga is still undervalued compared with its peers and in view of its potential for new oil finds in the North Sea,'' an Oslo based analyst said.
Another London-based analyst said: ''If anything we would reiterate our ''buy'' on Saga. We think oil prices are at the bottom now, but anyway it is exploration success and production profitability that drives our view.'' |
