MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING TUESDAY, FEBRUARY 3, 1998 (8)
PINNACLE OIL INTERNATIONAL, INC. (OTC Bulletin Board:PSFD') is pleased to announce that Pinnacle has entered into an Exploration Agreement with Renaissance Energy Ltd. (TSE:RES ) to fly exploration surveys over approximately 360,000 acres of land in which Renaissance holds an interest.
The Exploration Agreement is a result of blind tests and field evaluations of the Stress Field Detector Technology (the ''SFD'') conducted for Renaissance in various areas of Western Canada over the past six months. Under the Exploration Agreement, Renaissance will reimburse all exploration costs incurred in the surveys, and Pinnacle will earn an ''overriding'' royalty interest in prospects identified by the SFD which Renaissance subsequently develops.
Pinnacle's management believes that the combination of Renaissance's substantial holdings and expertise with Pinnacle's survey speed through the airborne SFD will provide synergistic results for both companies.
Pinnacle is a technology company engaged in the oil and gas exploration business and holds exclusive rights for hydrocarbon exploitation utilizing the Stress Field Detector, a technology which has been shown to aid in the identification of hydrocarbon bearing deposits.
Also, Encal Energy Ltd. (TSE: ENL, NYSE: ECA) commented on its joint venture with Pinnacle Oil International Inc. and the use of Stress Field Detection (''SFD'') as a reconnaissance tool to assist in the search for oil and gas in western Canada.
Pinnacle was the topic of a recent article in Barron's in which Encal was identified as a company working with the SFD technology. Encal's sole involvement with Pinnacle is a joint venture which began in late 1996 to investigate the application of SFD technology for the identification of geological structures potentially containing hydrocarbons. Under the current terms of the joint venture agreement, Pinnacle is to provide Encal with SFD-qualified drilling proposals, which Encal will then further evaluate using conventional geological and geophysical methods. Encal may, at its option, elect to drill these prospects.
During 1997, Encal assisted Pinnacle with the correlation of SFD generated data and the development of airborne SFD surveying capability, Airborne data acquisition will facilitate the evaluation of this technology as a wide area reconnaissance tool. Encal is an intermediate oil and gas exploration and development company with operations focused in northeastern British Columbia and west central Alberta, Canada. The company currently produces approximately 12,000 barrels per day of oil and natural gas liquids and 140 million cubic feet per day of natural gas. Encal plans to drill more than 160 gross wells dining 1998 to support its continued strategy of aggressive growth.
The struggle for control of Dominion Bridge Corp. remained unresolved late yesterday after a key board meeting here. AMERICAN ECO CORP. tabled an offer believed to be worth more than $90 million with Dominion's New York financial advisers, Legg Mason Wood Walker Inc., last week. The bid was to be considered by Dominion's board yesterday and a statement was expected in the afternoon. No information
was put out by either Dominion or American Eco, although analysts said Legg Mason and a majority of Dominion's board had favored American Eco's bid.
Sources said a dispute emerged at the last minute between American Eco and Dominion's management group over the terms of the proposal. American Eco would not reveal details of its bid, but it is believed to be for all Dominion's 31 million shares. Dominion's shares (DBCO/NASDAQ) closed Friday at US$1.75. On Monday they touched US$2 before falling back to US$1.75 near the close yesterday.
Another U.S. construction group, Roxco Ltd., also tabled a bid for Dominion last week and it, too, was to be considered by Dominion's board yesterday. Roxco would not provide details of its offer.
Dominion's embattled management group is led by chief executive Michel MarengŠre and chief operating officer Nicolas Matossian. Neither was available for comment yesterday.
From Toronto, American Eco vice-chairman John Pennie said his company has already expressed interest in Dominion's business, believing it can be made profitable. "We have a strong desire to complete the deal to support Dominion's customers and suppliers as well as employees," he said.
U.S. NOTES
(Monday Activity)
Top Stories: E&P Companies and Major Oils Proving a Safer Haven in Patch
Mavis Scanlon N.Y. Times
If Monday's action is any indication, independent exploration and production (E&P) companies as well as major oils are the place to be in the oil patch.
Overall, independent E&P firms as well as the major integrateds held their ground better than drillers, onshore or off, and service companies on Monday. Apache (APA:NYSE) was up 7/16, or 1.3%, to 33 9/16, and Unocal (UCL:NYSE) ended up 3.1% to 35 7/16. On the major integrated side, Mobil (MOB:NYSE) gained 1 3/16 to close at 69 11/16 and Chevron (CHV:NYSE) rose 7/8, or 1.2%, to close at 75 5/8.
"I think the E&P's are among the more interesting companies out there," says David Stadlin, manager of Smith Barney Natural Resources fund. "My sense is that the more 'fast-money' guys in the service companies are basically out and now some guys are taking long hard looks at the E&P sector."
Still, all bets are off, at least until the current phase of the oil-for-food deal with Iraq is decided. This week the UN Security Council will begin discussing Secretary General Kofi Annan's proposal that Iraq be allowed to export as much $5.2 billion worth of oil over a six-month period -- a dollar figure that would put Iraq's production facilities pumping at near capacity levels of about two million barrels per day. Crude futures for March delivery closed Monday at $17.04,down 16 cents.
"I think a lot depends on how these talks in Iraq go. That's a big if," says Victor Yu, vice president at Refco, a commodities broker. "And you know we could find ourselves back in the same position" where we were at the end of last week, Yu added, referring to the threat of military action and a concomitant sector rally. But "as long as they're talking, there's not going to be any shooting, which has the markets on edge."
The threat of $15 or even $14 oil is still very much out there, as long as the perceived supply exceeds present demand. And yet, at the same time, investors contend that in the long run the world's energy demand coupled with the oilfield equipment shortage will bode well for the industry.
Those conflicting views played themselves out to the fullest Monday, as stocks in every niche of the sector mixed. Among the deepwaters, for example, Falcon Drilling (FLC:NYSE) fell 4.5%, or 1 3/8, to 29,
Diamond Offshore (DO:NYSE) fell 7/8 to 43 3/4, but Transocean Offshore (RIG:NYSE) gained 3/8 to close at 40 1/8.
Land drillers ended the day in mostly negative territory, but Nabors Industries (NBR:AMEX) closed up 5/16 at 24 1/4. The equipment makers fared similarly: National Oilwell (NOI:NYSE), which reported strong earnings Monday, rose 11/16 to 27 3/16, but Maverick Tube (MAVK:Nasdaq) lost 1/16 to close at 21 3/4.
In what is always viewed as a negative for the entire sector, Schlumberger (SLB:NYSE) closed down 3/8, at 73 5/16.
Asia Cheer Can't Overcome Iraq Blues for Most Drillers
Mavis Scanlon N.Y. Times
What's keeping most oil service and drilling stocks from participating in the market's broad-based rally Monday? Fear of 2 million more barrels of oil per day pumped into the world market at a time when demand is slowing.
That's about what Iraq may be allowed to export under the current phase of its oil-for-food deal with the United Nations if Secretary General Kofi Annan's recommendation is passed by the U.N. Security Council, a process expected to take at least two weeks of negotiation. The possibility of more oil on the market, combined with Iraq's agreement to accept Turkish intervention to help ease the weapon inspection crisis, put downward pressure on crude prices at the open.
The pressure follows a weak close in crude futures Friday. "No one wants to go home long," says Victor Yu, vice president at Refco Inc. "Their view is the market is still not favorable." Crude futures for March dropped to a low of $16.70 in morning trading before climbing back to $16.99, down 21 cents.
Before any big move can be made in the oil service sector, investors will need to see oil prices come back up, says Erik Gustafson, portfolio manager of the Stein Roe Growth Stock fund. He is limiting himself to selective buying on these down days, and today is adding slightly to his position in Schlumberger (SLB:NYSE), down 5/16 at 73 3/8. Other investors may be following a similar pattern, or are just plain uncertain about whether to jump in.
EARNINGS REPORTS
PRODUCERS
NORCEN ENERGY RESOURCES closes 1997 with record cash flow, earnings and capital program.
Message 3331442
TRI LINK RESOURCES reports 1st 9 months results. To the end of the third quarter of Tri Link's fiscal year, production volumes were 13 percent higher than the same period of the prior year. Oil price realizations were 9 percent lower than last year, while gas prices increased by 7 percent. Message 3302699
SHELL CANADA LTD. announced record earnings from continuing operations for 1997 of $523 million or $1.69 per class "A" Common Share compared to earnings of $326 million for 1996 - an improvement of 61 per cent. Total reported earnings in 1996 were $595 million or $1.77 per share which included the Chemicals business sold at the end of the year. Oil Products achieved record earnings due to improved margins and higher sales volumes. Resources reported slightly lower earnings due to reduced volumes. Shell Canada's 1997 earnings also included a $67-million improvement from the refund of income tax and
related interest. Message 3287508
ALBERTA ENERGY COMPANY LTD. today announced record reserve additions and reduced finding and development costs for the Company's largest ever exploration program. In reporting on 1997 operations, AEC also announced record exploration land assembly and oil and gas production.
Western Canadian conventional reserve additions, excluding the growth in AEC's Syncrude proven reserves, were 1.1 trillion cubic feet equivalent, or 28% of AEC's entire conventional reserves base, all achieved through the drillbit. Of that total, the Company recorded 880 billion cubic feet equivalent on a proven-only basis. Two independent consultants, Gilbert Laustsen Jung Associates Ltd. and McDaniel and Associates Consultants Ltd. evaluated the reserves.
Message 3303047
AMERICAN LEDUC PETROLEUMS LTD. released first quarter results for the period ended November 30, 1997. At the same time, the Company reported the results for the year ended August 31, 1997.
Message 3331766
ALL OTHERS
VENTURE SEISMIC LTD. (NASDAQ NMS-VSEIF) reported results for the three months ended Dec. 31, 1997 ("first quarter of fiscal 1998"). Revenue for the first quarter of fiscal 1998 increased 54 percent to $8.6 million from revenue of $5.6 million for the same quarter last year. Net income for the first quarter of fiscal 1998 increased 153 percent to $390,703, or $0.12 per share, compared with net income of $154,260, or $0.05 per share, for the same quarter last year.
Message 3297829
FINANCING
PRODUCERS
K2 ENERGY **************** Message 3334706
PROGRESS ENERGY LTD ****** Message 3329598
FIRST CALGARY PETROLEUMS* Message 3303107
BRITTANY ENERGY INC ****** Message 3302754
BERKLEY PETROLEUM CORP.** Message 3302566
TRANSGLOBE ENERGY CORP. ** Message 3313447
ESKER RESOURCES LTD. ******https://www.siliconinvestor.com/readmsg.aspx?msgid=3302392
ALL OTHERS
AUSTPRO ENERGY ********** Message 3334425
RIDGEWAY PETROLEUM ***** Message 3333260
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