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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (8982)	2/12/1998 11:34:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WEDNESDAY, FEBRUARY 11, 1998 (4) HOT STOCKS The top 4 out of 5 dollar volume issues on the ASE were HEGCO Canada (HEG/ASE) $800,786, down $0.24 to $2.75, Red Sea Oil Corp.(RSO/ASE) $783,694, down $0.23 to $3.20, Green River Petroleum (GRP/ASE) $496,036, up $0.16 to $1.43 and Raptor Capital Corp. (RCP/ASE) $390,950, up $0.20 to $0.70. Yesterday, Red Sea Oil announced results of a 40 day test program on the B1-NC177 well in the Sirte Basin, on shore Libya. On Feb. 5th, HEGCO Canada reported progress on their El Grande well. No recent news on the others. Pinnacle Resources and Northstar Energy traded on much higher than average volume on the TSE. Pinnacle traded 1.63 million shares, up $0.40 to $13.80 and Northstar traded 1.34 million shares, rising $0.35 to $9.45. MOST ACTIVES Pinnacle Resources, Northstar Energy, Norcen Energy Resources, Gulf Canada Resources, Morrison-Middlefield, Penn West Petroleum, Westfort Energy, Probe Exploration, Renaissance Energy, Ranger Oil, Tarragon Oil & Gas and Talisman Energy were among the top 50 most active traded issues on the TSE. Seven Seas Petroleum (U) gained 1.45 to $20.70, Chieftain International $1.15 to $30.75 and Suncor Energy $0.80 to $51.40. Percentage gainers included Cavell Energy 15.7% to $1.33, Symmetry Resources 10.8% to $1.33, Westfort Energy 9.8% to $1.35, Ram Petroleum 7.7% to $1.40, Seven Seas Petroleum (U) 7.5% to $20.70, Black Sea Energy 6.9% to $1.55, Richland Petroleum 6.7% to $4.00 and First Calgary Petroleums 6.0% to $1.06. On the downside, Tri Link Resources fell $0.60 to $15.90, Canada Southern Petroleum $0.50 to $11.00, Gulfstream Resources $0.50 to $7.05, Remington Energy $0.50 to $18.10, Baytex Energy $0.45 to $14.35 and Cabre Exploration $0.40 to $17.85. Percentage losers included TransGlobe Energy 11.8% to $1.50, Profco Resources 9.5% to $0.95, OGY Petroleum 7.9% to $1.29, Gulfstream Resources 6.6% to $7.05, Pacific Cassiar A 5.6% to $5.10, Purcell Energy 5.5% to $1.04 and Bow Valley Energy 5.4% to $1.41. Seven Seas Petroleum (U) reached a new 52-week high. Crown Joule Exploration, Interaction Resources, Numac Energy and Pursuit Resources gained new 52-week lows. In review of service companies, and those companies with close ties to the industry, Bromley Marr was among the top 50 most active issues on the TSE. Mullen Transportation gained $0.85 to $20.10 and Computalog $0.75 to $20.75. Percentage gainers included Ryan Energy 5.5% to $9.60. On the downside, IPSCO fell $1.00 to $60.50. Percentage losers included Bromley Marr 12.0% and Crew Developement 7.7%. No new 52-week highs. Computer Modeling reached a new 52-week low. Over on the Alberta Stock Exchange, Raptor Capital, Green River Petroleum, Bearcat Exploration, HEGCO Canada, Red Sea Oil, Stampede Oils, Alta Pacific Capital, Corridor Resources, EMR Microwave, ICE Drilling, Dalton Resources, Cirque Energy, Cubacan Exploration, Colony Energy and First Star Energy were among the top 30 most active traded issues. Meota Resources gained $0.23 to $1.38, Raptor Capital $0.20 to $0.70, Green River Petroleum $0.16 to $1.43, Maxwell Oil & Gas $0.13 to $1.39, Destiny Resource Services$0.10 to $3.10, Jett Investment $0.10 to $0.91 and Progress Energy $0.10 to $2.35. Percentage gainers included Raptor Capital 40.0% to $0.70, Rapidfire Resources 25.0% to $0.25, Carpatsky Petroleum 20.7% to $0.35, Meota Resources 20.0% to $1.38, Ramarro Resources 15.4% to $0.30, Green River Petroleum 12.6% to $1.43, Jett Investment 12.3% to $0.91, PanOil Resources 11.1% to $0.40, Circle Energy 10.8% to $0.41 and Maxwell Oil & Gas 10.3% to $1.39. On the downside, BriAlto Energy fell $0.45 to $0.80, Stellarton Energy $0.30 to $4.10, HEGCO Canada $0.24 to $2.75, Red Sea Oil $0.23 to $3.20, Justinian Exploration $0.20 to $3.20, Palmetto Resources 0.20 to $1.00, Granger Energy B $0.13 to $0.51, AltaQuest Energy $0.10 to $2.75, Colony Energy $0.10 to $1.60, Deena Energy $0.10 to $1.15 and Redeco Energy $0.10 to $0.65. Percentage losers included Justinian Exploration 40.0% to $0.30, BriAlto Energy 36.0% to $0.80, Q Energy 21.2% to $0.26, Granger Energy B 20.3% to $0.51, Palmetto Resources 16.7% to $1.00, Redeco Energy 13.3% to $0.65, BXL Energy 13.0% to $0.47 and Dakota Resources 12.0% to $0.22. Green River Petroleum reached a new 52-week high. Granger Energy B and Millennium Energy reached new 52-week lows. Companies in bold print are listed among Kerm's Top 21, Spec 15 and Serv 7 listings An excellent summary of most actives covering all four of the Canadian Stock Exchanges can be found at quote.yahoo.com STOCK EXCHANGE NOTES None Today RESEARCH - ANALYSTS - FUND MGR.'S - BUY/HOLD/SELL - ETC. Gordon Capital Probe Exploration Inc. (PRX-T:$4.85) BUY Start-up Underway at Calmar Gas Plant Management expects to commence gas processing today at the Calmar plant (part of the Leduc project). The plant is expected to reach capacity within the coming weeks. Once fully operational, this plant will increase Probe's daily production by almost 30% to 11,300 boe/d. Our 1998 production forecast is 13,500 boe/d (9,000 bbls/d of oil and NGLs and 45 mmcf/d of gas.) We are forecasting fully diluted CFPS of $0.30 in 1997, $0.85 in 1998 and we have upgraded our 1999 forecast to $1.25 from $1.05. Our 12-month stock price target is $8.00. Gordon Capital Maxx Petroleum Ltd. (MXP-T:$1.82) BUY Total Reserves Increased By 39% To 19.1 Million BOE In 1997 Maxx's proven plus probable reserves additions in 1997 replaced production by 402% at a finding and development cost of $6.64/boe, down from $7.30/boe in 1996. This brings Maxx's three year average F+D cost down to $6.28/boe. Maxx's proven reserve life index has increased from 7.8 years to 9.4 years --on a proven plus probable basis the reserve life index increased from 8.9 years to 10.7 years. As a result of the new reserve data, our NAVPS estimate is now $2.85. December 1997 production was 8,400 boe/d, ahead of the forecasted exit rate of 8,000 boe/d. Maxx's 1996 exit rate was 6,100 boe/d. We are currently forecasting 1998 production of 9,400 boe/d (8,200 bbls/d of liquids and 12 mmcf/d of gas). Our fully diluted CFPS forecast is $0.50 in 1997, $0.60 in 1998 and $0.70 in 1999. Maxx is heavily weighted to oil and consequently a US$1.00 change WTI translates in to a C$0.06 change in 1998 CFPS. We are currently using a WTI forecast of US$18.50 in 1998 and US$19.00 in 1999. We maintain our BUY opinion on Maxx with a 12-month stock price target of $2.25. Drilling & Oilfield Services February 10, 1998 Enerflex Systems(EFX/TSE $36.00) BUY Enerflex reported EPS of $0.52 in Q4/97 compared to $0.36 in Q4/96. Revenue growth over the same period was 27% which reflects robust demand for natural gas compression equipment both in western Canada and internationally. Margins in the latest period were also excellent reflecting a high level of parts and service business as well as the timing of completion of international contracts. Outlook The order backlog in both western Canada and internationally is very strong. An office in the U.K. was recently opened to service the rapidly growing North Sea gas compression equipment market. The planned increase in natural gas pipeline capacity out of western Canada is also expected to boost demand for compression equipment. Enerflex is building a new production facility in Calgary which will double manufacturing capacity and should be completed in late 1998. We have raised our 1998 EPS estimate from $2.00 to $2.20 to reflect the favourable outlook. Valuation As shown in the following table, ( Message 3412944 ) Enerflex has established an excellent track record of growth in revenue and net income. Since 1993, Enerflex has generated a compound annual growth rate of 29% in revenue and 34% in earnings per share. This time frame encompasses a period of weak gas pricing, in the winter of 1994-95, and demonstrates the ability of this company to grow in difficult market conditions. The expansion of the parts and service and overhaul market segments as well as the very successful international expansion are examples how Enerflex has offset some temporary weakness in western Canadian gas markets. Long term we are very optimistic about the demand for compression equipment in western Canada for two reasons. First, the increasing pipeline capacity will create incremental demand for equipment. Second, older mature gas fields will continue to require more powerful compression equipment to maintain their deliverability. The international prospects are equally enticing as Enerflex has grown the international revenues from virtually nil five years ago to the current level of over $70 million (20% of revenue). We have a one-year target price of $40 per share with considerable longer term upside. We recommend that investors buy shares of this exceptionally well managed company.

To: Kerm Yerman who wrote (8982)	2/12/1998 12:04:00 PM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WEDNESDAY, FEBRUARY 11, 1998 (5) KERM'S TOP 21 - SPEC 15 - SERV 9 COMPANIES IN THE NEWS At its Annual General Meeting of Shareholders today in Calgary, Anderson Exploration Ltd. (AXL/TSE) announced its financial and operating results for the first quarter of fiscal 1998 which ended on December 31, 1997. The Company met its production targets for the first quarter, recording a seven percent increase in production over the same period in the previous year. Cash flow from operations was $90.8 million or $0.74 per share and earnings were $11.3 million or $0.09 per share. Natural gas sales averaged 561 million cubic feet per day in the quarter compared to 542 million cubic feet per day last year. Increases in gas production were largely due to a successful drilling and acquisition program in northeastern British Columbia in the last half of fiscal 1997. Oil and natural gas liquid sales increased 12 percent to 37,229 barrels per day from 33,165 barrels per day. The acquisition of an additional interest in Swan Hills and development work in eastern Alberta and Saskatchewan were the major contributors to the increase, offset somewhat by the disposal of the Company's interests in Argentina which contributed 1,550 barrels per day in the first quarter of last year. Natural gas prices were similar to last year but crude oil and natural gas liquids prices were 24 percent lower. As expected, these lower prices, combined with higher costs, resulted in a decrease in cash flow and earnings from the same period in the previous year. Lower prices more than offset the increases in production resulting in a decrease in revenues. Operating expenses increased as a result of increased heavy oil production, the continuation of workover programs at Swan Hills and Eagle and overall increases in costs throughout the industry. General and administrative expenses remained at the same low levels of previous years. Net capital expenditures of $214.6 million for the first three months of the year represent over 40 percent of the Company's annual budget for fiscal 1998. These expenditures include the purchase of an additional interest in the Company operated Swan Hills Unit No. 1 for $98 million and $14 million of pipeline expenditures related to the northern pipeline expansion project being carried out by Federated Pipe Lines Ltd. Long term debt has increased to $670.4 million as a result of these expenditures. The Company drilled 132 gross (98 net) wells in the quarter and participated in the construction of several new facilities. The most active drilling area was in the Peace River Arch where a total of 42 wells were drilled. An 18 million cubic feet per day gas plant was constructed at Normandville to process both sweet and sour gas and 15 wells were tied in to the plant. At Gainsborough, a new oil battery was constructed. Anderson Exploration is now in the midst of an active winter drilling program with activity focused on gas prospects in northeastern Alberta and northeastern British Columbia. The Company is still operating on a total capital budget of $505 million for fiscal 1998. However, the outlook for commodity prices, particularly oil, is significantly lower than the Company's expectation at the time of budgeting. If prudent, the Company may cut its capital spending in the second half of the year if prices continue to deteriorate. In Anderson Exploration's 1997 annual report, the Company indicated that it expected to see significant increases in production volumes in fiscal 1998, but that the first half financial results would not meet the prior year's results. The Company now extends that latter feeling to the financial results for the whole year. The Company still feels the outlook for future natural gas prices is very positive. The construction of additional pipeline capacity to supply export markets has already begun and, by November 1998, significant increases in export capacity will be available. This should result in higher natural gas prices for Alberta producers. The recent reduction in crude oil prices and the postponement of many heavy oil projects should cause a decrease in industry activity levels once the winter drilling season is over. This may well moderate some of the upward pressure on costs that has been experienced at high activity levels. For complete report with table data, go to Message 3407198 KERM'S WATCHLIST OF COMPANIES IN THE NEWS Neutrino Resources Inc. (NTO/TSE) reported the closing of an agreement with a senior energy producer of Calgary, through which Neutrino acquired a further 22% interest in its operated Inverness light oilfield property at Swan Hills, Alberta. Neutrino's total working interest in the Inverness Unit is now approximately 95%. David Beckwermert, Executive Vice-President of Neutrino, reported "Under the agreement which was effective November 1st, 1997, we arranged a swap with the other producer, whereby we gained the increased working interest in Inverness and relinquished a 27% working interest to them in our non-operated Handsworth oilfield in Saskatchewan.'' Mr. Beckwermert said, ''We are pleased we are able to increase our interest in a core operated property which is demonstrating considerable potential for Neutrino. To that end, we are planning the drilling of two additional horizontal re-entries as well as a number of re-completions in Inverness during the summer of 1998.'' Beckwerkmert reported Neutrino is currently into an aggressive winter drilling program which will see a minimum of five exploratory wells drilled. Daily production rates reached 3,501 barrels of oil equivalent (BOE) per day at year end 1997, which met the company's target level. OTHER COMPANIES IN THE NEWS Oxbow Exploration Inc. (OXB/ASE) provided an update to current operations. The company is currently producing approximately 2,400 BOE/day weighted 70% oil and NGLs and 30% natural gas. Three core properties comprise 72% of the Company's average daily production. The Macoun, Saskatchewan oil property is currently producing 820 BOPD net to Oxbow. The Noel, B.C. natural gas property is currently producing 5.5 MMCFE/day (4.4 MMCFE/day net to Oxbow). An additional 5.8 MMCFE/day (net 2.7 MMCFE/day) is expected to commence production in early March. The Rigel, B.C. oil property is currently producing from 2 wells at a rate of 960 BOE/day (480 BOE/day net to Oxbow). A horizontal development well spudded February 7, 1998 with a second horizontal location to follow. Geoff Williams, President and CEO of Oxbow commenting on recent developments in the Company said, "The delay in start-up of new production became unavoidable because of equipment delivery delays and rig availability. Our review of the acquired Samedan lands is progressing. A total of 11 locations (4 development; 7 exploratory) have been selected for drilling over the first half of 1998." Lodestar Energy Inc. (LEI.A - LEI.B/ASE) and Torrington Resources Ltd. (TRN/TSE) jointly announced that the proposed amalgamation between Lodestar and a wholly owned subsidiary of Torrington, as previously announced, has been approved by both the holders of Lodestar's Class A shares and Class B shares at separate shareholders' meeting held today. A total of 99.9% of the Lodestar Class A shares voted at the Class A shareholders' meeting and a total of 100% of the Lodestar Class B shares voted at the Class B shareholders' meeting voted in favour of the amalgamation. Under the terms of the amalgamation, holders of Lodestar Class A Shares will be entitled to receive $1.15 cash for each Class A Share held, and holders of Lodestar Class B Shares shall be entitled to receive for each Class B Share held, at their election, 0.6 of a Torrington Common Share or $3.00, subject to a maximum cash amount available to all holders of Class B Shares of $720,000. It is anticipated that the effective date of the amalgamation will occur on or about March 20, 1998 at which time Lodestar shareholders will be entitled to receive cash or Torrington common shares, or both, and the Class A shares and Class B shares of Lodestar will be delisted from the Alberta Stock Exchange. Wild Horses Resources Ltd. (WHR.A/ASE) announced Paul Jeffrey has been appointed president and chief executive on an interim basis. He replaces Douglas Amy, who relinquishes both titles, effective Oct. 1. The company said the change reflects its desire to retain a president highly experienced in the oil and gas industry. Noranda Inc. reported a 77% rise in profit for its fourth quarter yesterday and said it is steaming ahead with plans to spin off two divisions to shareholders. In November, with its stock in a deep slump, Noranda announced a plan to quit the forestry and energy businesses to focus on mining. The first move was made two weeks ago when U.S. based Union Pacific Resources Group Inc. agreed to pay Noranda $1.83 billion for its 49% stake in Norcen Energy Resources Ltd., part of a wider agreement to buy all Norcen for $3.7 billion. Noranda' chief financial officer Al Thomas said he hopes the sale will close in the next three weeks. Noranda next plans to turn over its 49% stake in Noranda Forest Inc. and its 100% of Canadian Hunter Exploration Ltd. to shareholders. Each Noranda share would entitle the holder to 0.43 of a Noranda Forest share and one Canadian Hunter share, Thomas said, adding the company believes the divisions are undervalued as part of the parent firm. The company has applied for a tax ruling on the deal, expected by early April, and will schedule a shareholders' meeting in the second quarter to approve the spinoffs. Canadian Forest Oil Ltd. has entered into a joint venture with Ranger Oil Limited encompassing three exploration licenses in the Central Mackenzie area of the Northwest Territories. The Exploration Licenses, covering 460,000 acres, are located approximately six miles from Norman Wells, the fourth largest oilfield in Canada, and are in close proximity to the underutilized Mackenzie Valley Pipeline. Under the terms of the joint venture, Canadian Forest will earn a 50% working interest in two of the Licenses and a 25% working interest in the third. The joint venture will undertake an initial three-well program to test prospects on each license, with the anticipation that all three wells will be drilled during the current winter drilling season. The first well is now drilling with the spudding of the second well anticipated within the next week or two. This joint venture complements Canadian Forest's other activity in the Northwest Territories where the Company is participating with Ranger Oil Ltd. in the P-66A well currently drilling at Flett in the Ft. Liard area of the Southern Mackenzie Valley. In addition, the Company has retained varying interests in 20 oil and/or gas Significant Discovery Leases (SDL's) in the Beaufort Sea - Mackenzie Delta area and one SDL in the Sable Island area off Canada's east coast. Canadian Forest Oil Ltd. is a wholly owned subsidiary of Forest Oil Corporation (FST/NYSE) of Denver, Colorado. Canadian Forest is actively involved in the exploration and production of oil and gas as well as the marketing of natural gas through its wholly owned subsidiary, Producers Marketing Ltd. (ProMark). More on this related developement can be found at biz.yahoo.com