MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING FRIDAY, FEBRUARY 20, 1998 (7)
OTHER COMPANIES IN THE NEWS
Rock Capital Corporation (RCK/ASE) announced that it has completed its previously announced acquisition of a 62 1/2 % interest in three oil wells located in the Roncott area of Saskatchewan from Black Canyon Resources Inc. for total consideration of $500,000. An independent engineering report suggests that the property on which the wells are located has proven producing reserves before royalties of 185,000 barrels of oil with daily production in the order of 29 barrels of oil per day. It is intended that this acquisition constitute the Corporation's major transaction pursuant to Alberta Securities Commission Policy 4.11.
Ridgeway Petroleum Corp. (RGW/VSE) was the successful bidder at a February 17, 1998 State of New Mexico land sale and acquired state leases covering 11,895 acres. The leases cover all oil, gas, CO(2), and helium rights under the lease area. A federal land sale in the same area is scheduled for April 1998.
Ridgeway has also drilled, cored, logged and cased its second well in the current New Mexico six well delineation drilling program. Of particular importance was the data recovered from the Riggs Sand (formerly referred to as the Granite Wash) which may increase the estimates of gas in place, currently in the twenty one TCF range. Fracturing containing C0(2) in the basement granite is leading to geological consideration of the possibility of the CO(2) / Helium gas emanating from a hidden deep magmatic source similar to the Bravo Domo field in north east New Mexico.
The third well in the current delineation program will spud today.
INTERNATIONAL COMPANIES IN THE NEWS
None
COUNTRIES/REGIONS IN THE NEWS
West Africa
West Africa looks set to become one of world's fastest growing new oil producers with output expected to climb over the next decade as a new generation of deep-water wells come on stream, analysts said on Thursday.
Oil companies are investing millions of dollars a year in a scramble to find crude in deep waters off the West African coast which have become among the hottest spots on the international exploration map.
While estimates of potential output vary, even these figures may prove conservative as more exploration successes push reserves higher.
Recent discoveries have boosted estimated recoverable reserves by billions of barrels and the newly discovered fields could add up to 1.4 million bpd to output by 2005.
Although most attention has focussed on Angola where a number of big finds have been made in the last two years, companies have made deep-water discoveries in neighbouring Congo and are looking further north to Senegal and Benin.
''A string of discoveries in Angola has stoked interest in the rest of the region,'' said Peter Bogin, associate director of Cambridge Energy Research Associates in Paris.
According to the Center for Global Energy Studies, the region's crude production could reach almost five million barrels per day (bpd) by 2005, up some 35 percent on last year's estimated level of 3.8 million bpd.
Wood Mackenzie forecasts output rising to 4.39 million bpd in 2000 and 4.5 million bpd in 2005. The later figure includes production from Exxon Corp's (XON/NYSE) project near Doba in southern Chad which is due to start up in 2001.
''The big uncertainty is Nigeria which is producing 2.2 million bpd and could potentially go much higher,'' said Andrew Latham at Wood Mackenzie, based in Edinburgh.
He said Nigeria's output was constrained by a lack of investment by state oil company Nigerian National Petroleum Corporation in expanding joint projects with oil majors.
Anglo/Dutch major Royal Dutch Shell (RD.AS - UK & Ireland: SHEL.L) has estimated Nigerian deep waters could contain commercial reserves of anywhere between five and 20 billion barrels.
Analysts said another more general factor limiting exploration off West African shores was likely to be cost and limited availability of suitable drilling rigs.
''Costs are high and rising because of the boom and the fact there are not too many submersible ships on the market,'' said Remi Fontaine of Petroconsultants in Geneva.
Even with an exploration rush over the last couple of years, Angola will remain a distant second to Nigeria, the region's largest oil producer.
Analysts estimate Angola could pump up to 1.6 mln bpd by 2004, compared with nearly 700,000 bpd last year.
The excitement about Angola stems from three potentially huge deep-water oil discoveries in the last two years, including Elf Aquitaine's (NYSE:ELF - ELFP.PA) Dalia and Girassol wells in Block 17.
These discoveries are believed to be the largest off West Africa to date and proven reserves in the block already exceed 1.5 billion barrels.
''The ultimate potential of the block is estimated at double or even triple this volume, and remaining wells of the current drilling programme could confirm much of this upside,'' said Wood Mackenzie.
There have also been rumours in oil circles for several months of a large find by Exxon in Block 15.
The successes have sparked intense competition for licences to explore in ultra-deep waters which Angolan state oil company Sonangol is expected to award this year.
News this month of another Elf discovery in the Republic of Congo near its Nkossa field supports hopes that oil-rich tertiary geological formations could extend from Angola to its northern neighbour.
Although the find, known as Bilondo Marine, is small, it is one of the first times that tertiary sediments have been tested in the Congo, said Latham.
Rising output from West Africa will have a major impact on world shipping markets as most of the new production will be exported rather than used locally.
Before the economic crisis in the Far East, around 15 percent of the region's crude went to Asian refineries.
If Asia absorbs a large part of the new African output, shippers would need twice as many vessels to move the crude east than across the Atlantic or into north-western Europe, said the Centre for Global Energy Studies.
SERVICE SECTOR NEWS
Request Seismic Surveys Ltd. (RSH/ase) announced the recent incorporation of it's U.S. subsidiary, Request Seismic Surveys International Inc. to be based in Houston, Texas. This subsidiary will provide data management and seismic brokerage to U.S. based customers.
Mr. Chuckry is also pleased to announce that Request has finalized an agreement to purchase an average 38% net revenue interest in 638 km of seismic data in South East Saskatchewan. The cost of this acquisition is $325,000 plus G.S.T.
The Corporation is in the business of providing access to seismic data information to customers within the oil and gas industry. The Corporation manages the flow of seismic information for sale purposes on behalf of other companies, acts as a broker to facilitate the licensing of seismic information between vendors and purchasers and creates, markets and supervises the acquisition of new seismic data inventory thereby adding to the asset base of the Corporation.
American Eco Corp. (ECX/TSE) announced that its Dallas based subsidiary, Specialty Management Group, Inc. d.b.a. "CCG" (Commercial Construction Group) has added USD$10.7 million in new contracts to its existing contract backlog of $13.7 million. The contracts are from various commercial clients including Allstate Regional Offices, Uniglobe Travel, Petco, regional shopping centers for Shafer Properties, direct care medical facilities for The Cirrus Group, Cornerstone Business Park, Cinemark and Starplex Theaters.
CCG began building for nationally known chains such as CompUSA, BizMart, Eckerd Drugs, Chuck E. Cheese's and numerous restaurant chains including Outback and Don Pablo's. Today, CCG's focus has changed towards more full service construction management, design/build and development services. While still maintaining focus on relationships with repeat businesses, CCG is now a true outsource
provider to its commercial and retail clients throughoutthe U.S.A.
Michael E. McGinnis, Chairman, President & CEO of American Eco, stated, "American Eco is very pleased with the rapid uptake in new business for our specialty construction and management systems being opened by CCG since its acquisition in late 1997".
American Eco is a leading North American provider of single-source construction, management, maintenance, specialty fabrication, engineering and environmental remediation services in the refining, petrochemical, utility, forest products and offshore manufacturing industries.
PIPELINE NEWS
See Dividends
EARNINGS REPORTS
Gulf Canada Resources (GOU/TSE) See Kerms Watchlist of Companies.
Bowridge Resource Group Inc. (BOW/TSE) showed a 146 percent growth in revenues to $12,808,341 for the nine-month period ended January 31, 1998 compared to the same period in the prior year. Current year revenues include the addition of Delta-X Corporation and escalating demand in the Canadian market for Central Production Testing Ltd.'s (CPT) services.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $2,070,929 (11 cents per share) were 68.5 percent ahead of the prior year period of $1,288,938 (11 cents per share). Per share numbers reflect the issuance of 7.3 million shares to finance the acquisition of Delta-X in February, 1997.
Net earnings of $447,023 (2.4 cents per share) compared to the prior year period of $450,434 (4.1 cents per share) reflect slower activity levels in Delta-X and a $50,000 write-down on obsolete inventory from discontinued operations. These conditions were offset by record performance in CPT.
Working capital was at $5,248,657 (28 cents per share) for the nine-month period, 163 percent ahead of $1,998,625 (18 cents per share) in the prior year.
Delta-X's backlog of orders has improved substantially for the last quarter of the year with increased orders from the U.S. and the closing of a significant international contract.
We anticipate CPT will continue to perform well until spring break-up and that producers' renewed focus on the gas side of theindustry will benefit this division.
For more detail with tables, see 192.139.81.46
FINANCIAL
Denbury Resources Inc. (DNR/TSE) announced today that it completed its offering of 4.557 million Common Shares at $16.75 per share, together with the sale of $125 million of 9 percent Senior Subordinated Notes of its wholly-owned subsidiary, Denbury Management Inc, due 2008 at a price of 99.932 percent.
An additional 313,400 shares were sold directly by the Company to its largest shareholder, the Texas Pacific Group, at the public offering price, less underwriting discounts and commissions of $0.795 per share. Following the equity offering, the Company will have approximately 25.9 million Common Shares outstanding.
The aggregate net proceeds from the offerings of approximately $199.0 million will be used to repay bank indebtedness incurred primarily in connection with the December 1997 purchase of $202 million of properties from Chevron U.S.A. Inc. Morgan Stanley Dean Witter, Gordon Capital, Inc., Johnson Rice and Company, L.L.C. and Loewen, Ondaatje, McCutcheon USA Limited were the managing underwriters of the equity offering and Morgan Stanley Dean Witter and Nationsbanc Montgomery Securities LLC were the managing underwriters of the debt offering. Closing for both the debt and equity offerings is scheduled for Feb. 26.
Denbury is a growing independent oil and gas company engaged in acquisitions, development and exploration activities primarily in the states of Mississippi and Louisiana.
INTERNAL AFFAIRS
New Energy West Corporation (ASE/NEC) announced it has reserved a price of $0.13 per share for the grant of stock options to acquire up to 200,000 common shares (the "Stock Options"). The Stock Options will be granted to a new director of the Corporation.
Rock Capital Corporation (RCK/ASE) announced that it has today granted options to three of its directors and officers to acquire an aggregate of 249,500 of its common shares at a price of $0.69 per share.
Redeco Energy Inc. (RE/ASE) announced that it has entered into an agreement with Hume, Kieran Inc., a Toronto based investor relations firm, to provide on-going investor relations services for the Company for an initial period of six months.
Hume, Kieran Inc. and its predecessor company Kieran and Co. have provided investor relations services for more than thirty years and has an outstanding reputation for building strong, long term investor support for companies such as Redeco.
Redeco is an oil and gas exploration and development company which, with a joint venture partner, owns the oil and gas exploration rights for the entire country of Moldova. In addition, with a joint venture partner, it owns a exploration permit in neighboring Romania.
ENERGY TRUSTS
Canadian Oil Sands Trust (CO.UN/TSE) announced the successful closing of the issue of 4 million Trust Units at a price of $24.00 per unit with net proceeds of $92 million. The offering was completed with a group of underwriters led by CIBC Wood Gundy Securities Inc.
The net proceeds of the issue, in conjunction with its $250 million line of credit, ensures the financing of the Canadian Oil Sands Investments Inc. 10 % share of the capital expenditures related to the ''Syncrude 21'' expansion. The expansion of Syncrude is projected to double the production of an even better quality, low sulphur crude oil at a significantly lower operating costs.
All of the common shares of Canadian Oil Sands Investments Inc. are owned by Canadian Oil Sands Trust. With this issue, Canadian Oil Sands Trust, a publicly held trust, has 27 million units owned by investors in Canada and internationally. The units are traded on the Toronto Stock Exchange.
DIVIDENDS
TransCanada PipeLines Limited declared a quarterly dividend of 31 cents per share on the outstanding common shares for the quarter ending March 31, 1998. It is the 137th consecutive dividend paid by TransCanada on its common shares, and is payable on April 30, 1998 to shareholders of record at the close of business on March 31, 1998.
The board also declared regular dividends on TransCanada's preferred shares for the quarter ending May 1, 1998. The following dividends are payable May 1, 1998 to shareholders of record at the close of business on March 31, 1998.
Dividend No. 128 was declared on the $2.80 Cumulative Redeemable First Preferred Shares in the amount of 70 cents per share.
Dividend No. 25 was declared on the Cumulative Redeemable First Preferred Shares Series O in the amount of $0.9875 per share.
Dividend No. 23 was declared on the Cumulative Redeemable First Preferred Shares Series P in the amount of $0.96875 per share.
Dividend No. 14 was declared on the Cumulative Redeemable Retractable First Preferred Shares Series Q in the amount of $0.81875 per share.
Dividend No. 10 was declared on the Cumulative Redeemable Retractable First Preferred Shares Series R in the amount of $0.74375 per share.
TransCanada PipeLines is one of North America's leading transporters of natural gas through its energy transmission businesses. TransCanada also operates significant complementary businesses in energy marketing and energy processing in North America, and is extending its operations internationally.
NOVA Corporation has declared the following quarterly dividend, payable on the 15th day of May, 1998, to shareholders of record at the close of business on the 30th day of April, 1998.
Preferred Shares
Series 1, Dividend No. 4
Dividend of $0.321875 per share on the outstanding Cumulative Redeemable First Preferred Shares, Series 1.
Common Shares
Common Shares, Dividend No. 16. Dividend of $0.10 per share on the outstanding Common Shares.
MISC.
Seven Seas Petroleum(SVS.U/TSE) stake is raised by Soros group. A group including international financier George Soros said Friday it increased its stake in Seven Seas Petroleum Inc to 8.76 percent, or 3,058,000 shares. In a filing with the U.S. Securities and Exchange Commission, the group said it most recently acquired 522,600 shares between Feb. 13 and Feb. 18 at $24 and $24.81 each.
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