MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING FRIDAY APRIL 24, 1998 (7)
IN THE NEWS
Commonwealth Energy Corp., through a joint venture with Renco Energy Inc., announced successful completion of the first well drilled on the Tyler Lease in Oklahoma. The well was drilled and completed to the Wayside formation to a depth of 560 feet, and is currently producing approximately 25 barrels of oil per day (12.5 Net). The second well on the property, also drilled to the Wayside formation, is undergoing completion and expected to be in production shortly. These wells are the first of a 12-well development program expected to be complete in July, 1998, and are the first new wells drilled and completed by Renco on the Tyler Lease. Commonwealth has a 50% working interest in this program.
Westhope Capital Corp. (WHCC/CDN) announces that its drilling program has been successful in putting two wells out of three wells drilled into production and is anticipating success from the drilling of a fourth well. The Company has a 15% interest in these producing wells.
1. Messea 6-238 NTR was the first successful well of the company initially producing at 70 barrels per day. As expected as most oil and gas wells the production has been reduced to approximately 5 bopd.
2. Gosfield South 2-24-V was drilled into a fractured limestone reservoir. This well was successful and initially produced approximately 75 bopd and is currently producing at an average of 28 bopd and is exhibiting a flat line decline.
3. Paragon Maidstone 8-1 intersected zones of good porosity but encountered only minor shows of oil and was not completed.
4. Clearwood - 4-24-V is a well to be drilled in the near future. We have been cash called to begin the drilling of this well and due to the look-alike anomalies with those of Gosfield South. 2-24-V it is anticipated that the results of the drilling will be as successful as the Gosfield South 2-24-V.
INTERNATIONAL
Companies
Pacalta Resources Ltd.'s (PAZ/TSE) 100 % owned Ecuadorian subsidiary, City Investing Company Limited has received notice from the Ecuadorian National Hydrocarbons Directorate (DNH) that all allowables into the export pipeline system have been re-apportioned and that as a result, the Company's allowable has been reduced to 17,597 from 19,550 BOPD.
The reduction in the allowable is attributable to an increased allocation to other private producers and the re-allocation of the existing Mariann, Tarapoa and Fanny fields and does not include any production from the new discoveries at Dorine, Anne or Aleluya. Current ongoing development includes plans to increase the capacity of production equipment on some of the wells. The Company is currently awaiting final approval of the Dorine Development Plan, and will immediately apply for new allowables from this field once this approval is received. Current cumulative total well capability from the City Block is in excess of 50,000 BOPD.
Development drilling in the Fanny pool is ongoing with the completion of two wells on the second Fanny pad. The Fanny-20 pad development anticipates up to 8 development wells will be drilled over the next 6 months. The Company has also completed the drilling of its final commitment well Mariann 4A and the fifth well in the Dorine pool, Dorine 8. Both wells have been cased as potential oil producers and will be production tested over the next 3 to 4 weeks. The H&P 132 rig is currently moving to the Tipishca prospect on Block 27 where drilling will commence in approximately 1 week.
INTERNATIONAL
Countries
Colombia Pipeline Repaired, Restarts Pumping
Colombia's Cano Limon-Covenas pipeline was repaired and restarted pumping crude Thursday afternoon, three days after being blown up by leftist rebels, Occidental Petroleum Corp (OXY) said.
''Pumping restarted about 2:53 p.m. (1953 GMT),'' an Occidental spokesman said.
Suspected national Liberation Army (ELN) rebels blasted the 230,000 barrel per day capacity pipeline for the 16th time this year on Monday near the town of Tibu in northeast Norte de Santander province.
State-run oil company said about 2,000 barrels of crude had been spilled in the attack.
Oman May Cut Spending On Low Oil Price
Oman's economy minister said in remarks published on Saturday that low oil prices could force the government to take steps that include cutting spending.
But Economy Minister Ahmad bin Abdul-Nabi Mekki told a United Arab Emirates newspaper he expected prices to pick up in the second half of 1998 after some oil producers agreed in March to reduce output.
"In the short-term, there is no doubt that the big decrease in oil prices influences the general budget of the sultanate as the
price assumed in the budget is 15 dollars a barrel," he told the Arabic daily Al-Bayan.
Benchmark Brent crude for June delivery was last quoted at $13.90 a barrel.
"It is naturally the case that these developments demand that measures are taken from the side of the government," the minister said. He expected consultations with ministries and other government agencies.
He also referred to "other measures to increase non-oil income and reduce spending" but gave no details.
"I want to point out here that oil prices are not expected to linger at low levels in the next few months and we hope that all oil exporting states, especially OPEC states, apply the agreement on production quotas appropriate with the requirements of the market, and comply with these quotas," the minister said.
Members of the Organisation of Petroleum Exporting Countries and some non-members announced an agreement in Riyadh on March 22 to cut output by some 1.5 million barrels per day.
Oman, a small independent oil producer, cut production by 30,000 bpd at the start of April from its output of 900,000 bpd.
"I think that the average price of oil for 1998 will be better than the present levels," the minister said.
He described the Riyadh agreement as a "step in the right direction."
He said Oman was working to diversify its economy and planned to reduce the contribution of oil to gross domestic product to about nine percent in 2020 from 41 percent in 1996.
Iraq Says It Needs More Than U.N. Is Offering For Its Oil Industry
Associated Press
Iraq needs more than the $300 million suggested by the United Nations to repair its battered oil wells and pipelines, an Iraqi oil executive said Friday.
Ali Hameed Mohammed Saleh, director-general of the state-owned Northern Oil Co., told the official Iraqi News Agency that the U.N.-appointed inspection team had failed to take account of what Iraq needs to process waste from the oil industry.
Experts from the Dutch firm Saybolt reported to the United Nations last month that Iraq required $300 million to upgrade its facilities in order to produce more oil under an expanded oil-for-food program that may begin in June.
U.N. Secretary-General Kofi Annan has presented the report to the Security Council, which approved a memorandum in February that recommended raising the program's ceiling from $2 billion worth of oil in six months to $5.2 billion.
"The Saybolt group was concerned only with Iraq's capacity to produce oil under the memorandum," Saleh said.
The head of Northern Oil, which controls the oil fields of Mosul and Kirkuk, did not give an estimate of how much money Iraq would need to overhaul its petroleum industry.
He said Iraq needs "a complete line of modern equipment and spare parts to treat the oil industry's waste in order to protect the environment."
The oil infrastructure was heavily damaged during the 1991 Persian Gulf War, which evicted Iraqi forces from Kuwait. It has also deteriorated from a lack of spare parts brought about by U.N. sanctions, imposed after the Kuwait invasion, that have crippled the national economy.
If the Security Council approves the Saybolt report, Iraq will be allowed to purchase parts and equipment in deals financed from its oil revenues and approved by the U.N. sanctions committee.
EARNINGS
Genesis Exploration Ltd. / Top 20 Listed
Message 4203762
Imperial Oil Limited
Message 4204345
Bellator Exploration Inc.
Message 4203066
Moiibus Resource Corp.
Message 4203740
Circle Energy Inc.
Message 4204375
Big Horn Resources Ltd.
Message 4204364
Odyssey Petroleum Corp.
Message 4202960
Veritas DGC Inc.
Message 4202992
McCoy Brothers Inc.
Message 4203125
TransCanada PipeLines Ltd.
Message 4203909
MARKET ACTIVITY
In the U.S., oil stocks were also weak as the AMEX Oil Index (XOI) fell 5.33 to 484.58 and the Philadelphia Oil Service Index (OSX) fell 2.49 to 111.34.
Dow component Chevron (CHV) fell 1 13/16 to 82 7/16 and Mobil (MOB) slid 1 to 78 9/16. Among drilling and service firms, Schlumberger (SLB), Cooper Cameron (RON), Noble Drilling (NE), Camco (CAM), and Cliffs Drilling (CDG) all fell more than $1.
The Toronto Stock Exchange 300 Composite Index fell 1.4% or 113.16 to 7703.24.
In comparison, the Toronto Oil & Gas Composite Index fell 1.2% or 83.26 to 6625.74. The Integrated Oil's fell 1.4% or 119.41 to 8523.29. The Oil & Gas Producers Index fell 1.1% or 64.11 to 5904.19 and the Oil & Gas Services lost 64.37 to 3212.70.
Newport Petroleum, Northstar Energy, Ranger Oil, Berkley Petroleum, Canadian Occidental Petroleum, Westfort Energy, Petro-Canada, Renata Resources and Post Energy were among the top 50 most active traded issues on the TSE.
Pendaires Petroleum gained $0.75 to $8.75.
Percentage gainers included Pendaires Petroleum 9.4% to $8.75, Renata Resources 8.0% to $1.08, Spire Energy 7.1% to $1.82, Phoenix Canada Oil 6.7% to $1.60, International Rochester 6.7% to $1.60, Post Energy 4.7% to $4.50 and Bow Valley Energy 4.3% to $1.20.
On the downside, Pacalta Resources fell $1.50 to $10.50 and Amber Energy $1.05 to $15.95.
Percentage losers included Pacalta Resources 12.5% to $10.50, Southward Energy 11.8% to $1.27, Westfort Energy 6.6% to $3.55, Amber Energy 6.2% to $15.95, Paramount Resources 6.2% to $15.25, Merit Energy 5.7% to $5.75, Richland Petroleum 5.7% to $3.30 and Black Sea Energy 5.5% to $1.04.
There were no service companies among the top 50 most active traded issues on the TSE.
American EGO gained $0.50 to $11.00 and Mullen Transportation $0.50 to $24.50.
Among percentage gainers, American ECO was up 4.8% to $11.00.
On the downside, Dreco Energy Services fell $2.00 to $55.00 and Ensign Resource Services $1.75 to $31.55.
Percentage loser was Canadian Crude Separators 13.5% to $4.40.
First Star Energy, Stellarton Energy, Anvil Resources, Dalton Resources, Edge Energy, HEGCO Canada, Cubacan Exploration, Gold Star Energy, Sator Capital, Red Sea Oil, ICE Drilling and AltaPacific Capital were among the top 25 most active traded issues on the ASE.
BW Technologies gained $0.35 to $3.95, Extreme Energy $0.29 to $0.50, Underbalanced Drilling $0.15 to $2.75, Meota Resources $0.13 to $1.18, AltaQuest Energy $0.10 to $3.50, Hyduke Capital Resources $0.10 to $3.05 and Canadian Talon Resources $0.10 to $0.65.
On the downside, HEGCO Canada fell $0.30 to $3.50, Edge Energy $0.20 to $4.20, Destiny Resource Services $0.15 to $3.30, Energy Nort $0.12 to $0.38, Belfast Petroleum $0.10 to $2.85, Desmairas Energy $0.10 to $0.20, Stellarton Energy $0.10 to $4.00 and Wolverine Energy $0.10 to $1.00.
EXCHANGE DOING'S
Effective April 23, 1998, Destiny Resource Services Corp. common shares are listed for trading on The Toronto Stock Exchange under the Symbol "DSC".
Effective April 24, 1998 Danoil Energy Ltd. common shares commenced trading on the Toronto Stock Exchange under the symbol "DAN.A".
RESEARCH NOTES
Chaney & Partners have increased their collective ownership in Elk Point Resources Inc. and now, on an aggregate basis, exercise control and direction over 3,217,800 common shares (14.9 percent) of Elk Point Resources Inc.
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