MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING MONDAY, JANUARY 12, 1998 (3)
STOCK MARKET ACTIVITY
Canada Oil Stocks Close Up For First Time In 1998
Canadian oil and gas stocks ended higher for the first time in 1998 on Monday, but analysts were not predicting the gloom cast over the industry was finally lifting.
''All I'm telling people is that valuations are pretty much rock bottom at the moment, but that's not to say they can't go lower,'' said analyst Robert Hinckley, who follows the Canadian oils for Merrill Lynch & Co in New York. ''But in a long-term sense, we're at the bottom of the cycle right now.''
The Toronto Stock Exchange's Oil & Gas subindex was up 70.09 points, or 1.23 percent, on Monday to close at 5,752.64.
That level is about equal to the sector's value in early October 1996, and down over 28 percent from its October 1997 high of 8,031.57.
A steep decline in world oil prices, caused by fears of oversupply and a cut in demand as a result of Asian financial crises, has been blamed for the battering Canadian oil shares.
''We've gone from the penthouse to the outhouse,'' the chief executive of one large Canadian oil and gas producer told Reuters on Monday.
However, several companies on Monday gained back some ground lost since December.
Gainers included Talisman Energy Inc (NYSE:TLM - Toronto:TLM), up 1.90 to 37.90, Alberta Energy Co Ltd (NYSE:AOG - Toronto:AEC.TO), Suncor Energy Inc (NYSE:SU - Toronto:SU.TO), up 1.30 to 44.45 and Canadian Natural Resources Ltd (Toronto:CNQ), up 0.80 to 26.50. All are down sharply from their 52-week highs.
Hinckley said he predicted a 1998 average benchmark West Texas Intermediate oil price of US$19 a barrel and a gas price at about the same level as 1997.
''We're looking at (current) valuations that are just over four times cash flow and about 85 percent of net asset value, and they don't get much lower than that,'' he said.
NYMEX WTI crude closed down 16 cents on Monday to US$16.47 a barrel and natural gas eased by just over four cents to end the day at US$2.002 per mmBtu.
INDEXES
The Toronto Stock Exchange 300 Composite Index fell 0.5% or 32.47 to 6239.96.
In comparison, the Oil & Gas Composite Index gained 1.2% or 70.09 to 5752.64. The sub-components were mixed. The Integrated Oils gained 2.0% or 162.69 to 8190.38. The Oil & Gas Producers rose 1.2% or 60.08 to 5006.39. Oil & Gas Services fell 1.7% or 42.50 to 2412,36.
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
HOT STOCKS
IPSCO INC. (IPS/TSE), down $2.15 to $49.10, on volume of 230,570 shares. The slide in the stock of the steel and steel products maker is attributable to a combination of the Asian crisis and reduced expectations for the price of oil and gas, said Anna Sorbo, analyst at CIBC Wood Gundy Securities Inc. in Toronto. The company produces pipe for the energy sector and any oil and gas price weakness is reflected in the demand for its products.
However, the price of plate metal is on the rise. It recently rose US$20 to $440 a ton and another US$20 rise is expected to stick on March 1. Ipsco's revenue is about 60% dependent on plate and the company is bringing more production on line at its Montpelier, Iowa facility, said Sorbo. The firm is the lowest cost producer in the industry and production in the U.S. is on the decline, she said.
MOST ACTIVES
Paragon Petroleum, Ranger Oil, Gulf Canada Resources, Gulfstream Resources, Beau Canada Exploration, Probe Exploration, Canadian Natural Resources, Petro-Canada, Canadian Occidental Petroleum, Berkley Petroleum, Talisman Energy and Northstar Energy were among the top 50 most active traded issues on the TSE.
Talisman Energy gained $1.90 to $37.90, Alberta Energy $1.35 to $27.10, Suncor Energy $1.30 to $44.45, Canadian Natural Resources $0.80 to $26.50, Renaissance Energy $0.75 to $25.85, Seven SeasPetroleum $0.70 to $17.60, Petro-Canada $0.65 to $23.75, Morrison Middlefield $0.60 to $9.60, Shell Canada A $0.60 to $2.50, Canadian Occidental Petroleum $0.50 to $26.90 and Remington Energy $0.50 to $20.00.
Percentage gainers included TransGlobe Energy 22.4% to $1.75, Cavell Energy 12.2% to $1.10, Spire Energy 11.5% to $1.45, Probe Exploration 7.1% to $3.75, Morrison Middlefield 6.7% to $9.60, Optima Petroleum 6.5% to $1.65, Gulf Canada Resources 5.6% to $7.55, Triumph Energy 5.5% to $2.90, Talisman Energy 5.3% to $37.90 and Alberta Energy 5.2% to $27.10.
On the downside, Baytex Energy fell $1.00 to $11.75.
Percentage losers included OGY Petroleum 12.6% to $1.18, Torrington Resources 12.2% to $3.75, Black Rock Ventures 11.1% to $1.20, Post Energy 10.9% to $2.85, Gulfstream Resources 10.5% to $4.70, Bellator Exploration 9.7% to $1.40 and TUSK Energy 9.1% to $1.00.
No new 52-week highs.
Anderson Exploration, Baytex Energy, Beau Canada Exploration, Blue Range Resources, Brigdon Resources, Cabre Exploration, Canadian Conquest Exploration, Canadian Natural Resources, Centurion Energy, Crestar Energy, Elk Point Resources, Genesis Exploration, Gulf Canada Resources, Gulfstream Resources, Maxx Petroleum, Merit Energy, Northstar Energy, Numac Energy, Pan East Petroleum, Penn West Petroleum, Petromet Resources, Pinnacle Resources, Poco Petroleum, Post Energy, Probe Exploration, Ranger Oil, Renaissance Energy, Saxon Petroleum, Talisman Energy, Tarragon Oil & Gas, Torrington Resources and Tri Link Resources reached new 52-week lows.
Among oil and gas service companies, as well as those with close ties to the industry, Ensign Resource services was among the top 50 most active traded issues on the TSE.
Prudential Steel gained $0.65 to $12.00 and Ryan Energy $0.45 to $8.00.
Percentage winners included Ryan Energy 6.0% to $8.00, Prudential Steel 5.7% to $12.00 and Crew Developement 5.3% to $2.00.
On the downside, Shaw Industries fell $3.60 to $39.00, Dreco Energy Services $3.00 to $39.00 and Ensign Resource Services $1.00 to $25.00.
Percentage losers included Kelman Technologies 17.9% to $1.60 and Shaw Industries 8.5% to $39.00.
No new 52-week highs.
Bromley Marr, Pason Systems, Peak Energy Services, Precision Drilling and Tetonka Drilling reached new 52-week lows.
Over on the Alberta Stock Exchange, Bearcat Exploration, Stampede Oils, Oxbow Exploration, Cirque Energy, Circle Energy, Scimitar Hydrocarbons, Burner Exploration, Master Downhole, Maxwell Oil & Gas, Calahoo Petroleum and Tessex Energy were among the top 30 most active traded issues on the exchange.
Tier One Energy gained $0.50 to $1.50, Mera Petroleum $0.24 to $0.64, Doreal Energy $0.15 to $1.50, Mart Resources $0.10 to $0.35, Sunburst Oil & Gas $0.10 to $1.15, Granger Energy C $0.07 to $2.07 and Del Mar Energy $0.05 to $0.45.
Percentage gainers included Mera Petroleum 60.0 % to $0.64, Tier One Energy 50.0% to $1.50, Mart Resources 40.0% to $0.35, Del Mar Energy 12.5% to $0.45, Doreal Energy 11.1% to $1.50, Canadian Talon Resources 10.0% to $0.55, Sunburst Oil & Gas 9.5% to $1.15 and Para-Tech Energy 9.4% to $0.35.
On the downside, Tier One Energy B fell $0.50 to $2.25, Underbalanced Drilling $0.30 to $2.60, Colt Energy $0.29 to $1.01, Bearcat Explorations $0.20 to $0.45, Granger Energy $0.20 to $1.00, Stellarton Energy $0.20 to $4.10, Alma Oil & Gas $0.15 to $0.45, Hawk Oil $0.15 to $1.35, Solid Resources $0.15 to $6.95, Devlan Exploration $0.14 to $0.55 and Electra Energy $0.14 to $0.10.
Percentage losers included Bearcat Exploration 30.8% to $0.45, Alma Oil & Gas 25.0% to $0.45, Mesquite Resources 24.0% to $0.19, Colt Energy 22.3% to $1.01 and Devlan Exploration 20.3% to $0.55.
No new 52-week highs. Alma Oil & Gas, Burner Exploration, Electra Energy, Gopher Oil & Gas, Granger Energy, Mesquite Resources and NTI Resources reached new 52-week lows.
EARNINGS REPORT
Destiny Resources Services Corp.Six Months Ending November
207.183.153.23
KERM'S TOP 21 - SPEC 15 - SERV 9 COMPANIES IN THE NEWS
ARCO & TALISMAN ENERGY reported their North Sea Gas Find Tested at 40 MMCF/Day. ARCO British Ltd's recently drilled 14/26a-6 well in the Central U.K. North Sea flowed over 40 million cubic feet per day of natural gas in tests which were limited by surface facilities, the Atlantic Richfield Co subsidiary said in a statement made available in New York.
The flow came at a tubing pressure of about 1,800 pounds per square inch and included an undisclosed condensate rate, the statement continued. ARCO said it plans to suspend the well, the second in its latest Central North Sea drilling campaign, in preparation for field appraisal and development activity. ''We have further work to do to quantify the reserve size, but we are optimistic it will be large enough to warrant commercialization,'' said Tom Murphy, ARCO British Ltd's Development Engineering Manager. ''We plan to drill an appraisal well as soon as practical in 1998.''
ARCO British Ltd said it is operator and has a 75 percent interest in the field. Talisman Energy Inc (NYSE:TLM -Toronto:TLM.TO - news) has a 25 percent interest.
PAN EAST PETROLEUM, Esker Resources and Petromet Resources Limited as operator, announced the Petromet et al WildR 2-2-57-24 W5M well has reached total depth of 4,265 metres. The 2-2 well is being cased as a potential Leduc natural gas well. Petromet operates two similar Leduc gas wells in the area which produce sweet gas from an overpressured reservoir.
Ownership in the 2-2 well is Petromet (79.2 percent, Pan East Petroleum Corp. (10.8 percent) and Esker Resources Ltd. (10.0 percent). Petromet owns 75 percent and operates the Wild River sweet gas plant located approximately 4 miles south of the 2-2 well. The 2-2 well will be completed and tied-in in the near future. The partners have licensed a follow-up well, Petromet et al WildR 12-11-57-24 W5M (a 4,250 metre Leduc test), to test a separate Leduc reef seismic anomaly.
THUNDER ENERGY INC.(THY - TSE) announced Monday significant production increases from facility start-ups and fourth quarter drilling activity. Current production is estimating 1,250 bbls/d and 7.5 mmcf/d (2,000 BOE's/d) as compared to 500 bbls/d and 6 mmcf/d (1,100 BOE's/d) in the fourth quarter 1997.
The production increases are a result of the start-up of newly constructed oil and gas facilities at Rosalind, Alberta. The completion of these facilities has allowed Thunder to put on production seven of the nine horizontal wells drilled on its Ellerslie oil pool. The remaining two horizontal wells will be put on production later in the first quarter.
Thunder is continuing to complete and place on production wells drilled in the fourth quarter of 1997. In that quarter Thunder drilled and operated with a 50 percent working interest a total of 17 wells, resulting in 10 gas wells, 6 oil wells and 1 dry hole.
Thunder estimates remaining production of 200 - 250 BOE's/d will be brought on stream by early February.
Thunder has commenced its first quarter drilling program. Two drilling rigs have been secured to drill a 7 well program. 4 wells will be drilled at Manola and 3 wells at Matziwin.
Scott Dutton, President & C.E.O. of UPTON RESOURCES INC.announced this morning the promotion of Upton's Geophysical Manager, Mr. Andy St. Onge, to Vice President of Exploration. Mr. St. Onge replaces Mr. Dean Potter, who was released by Upton on Friday, January 9. Mr. St Onge brings 15 years industry experience to his new position, and will have immediate supervisory responsibility for Upton's exploration team which includes three geologists and one other geophysicist.
Upton's 1998 drilling program of 60 plus wells is off to a fast start with 5 wells currently underway. Exploration drilling includes 2 wells in
Montana and Upton's first well at Tracey Mountain, Montana. The Tracey Mountain well is now drilling horizontally in the Mississippian Fryburg and should see production testing in 10 to 14 days. Development drilling is ongoing horizontally at Cantal, offsetting two excellent 300 plus BOPD wells drilled by Upton in late 1997, and vertically at Parkman. Current production of 5300 - 5400 BOPD is ahead of Upton's first quarter 1998 target of 5200 BOPD and new wells are being completed for production at Willmar, Palomino and Palmyra.
Upton is confident that its initial 1998 development production target of 5500 BOPD will be upgraded to reflect the better than predicted performance of the companies drilling program. |
