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

To: Kerm Yerman who wrote (10459)	4/30/1998 11:15:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING WED., APRIL 29, 1998 (4) TOP STORIES, Con't Nova Sets Aside $1.2B For Upgrades, Expansion The Financial Post Nova Corp. plans to spend $1.2 billion this year to expand and upgrade its chemical business and pipeline systems as it prepares to merge with TransCanada PipeLines Ltd. The Calgary-based company said yesterday its chemical division will spend about $400 million for expansion and upgrading, much of it related to building new ethylene and polyethylene plants at Joffre, Alta. Nova Chemicals Ltd. will be spun off into an independent publicly traded company in July with just over $1 billion in debt if the proposed merger, which will be presented to shareholders of both companies June 29, is approved. The company said it will also invest $330 million to expand its Canadian gas pipeline system, while another $435 million will be spent on international operations, including pipeline projects in South America. The projects will be financed through cash from operations and access to capital markets. Nova has $1.1 billion in unused credit facilities. Also yesterday, TCPL filed an application with the National Energy Board for another $984-million pipeline expansion that would add 275 million cubic feet of natural gas a day by Nov. 1, 1999, for customers in Eastern Canada and the U.S. This would entail building 560 kilometres of pipeline. If the proposal is approved, TCPL will have expanded delivery capacity by about 1.2 billion cubic feet a day since November 1996. Nova chief executive Ted Newall said the proposed merger is proceeding with few glitches. "There's been the odd speed bump, but fundamentally it's been going very smoothly, " he told analysts after Nova's results were released. Profit for the first quarter ended March 31 was $82 million (18› a diluted share), down from $124 million (27›) a year earlier. Revenue was $1.1 billion, down from $1.3 billion. The chemicals unit saw profit fall to $27 million from $73 million, mainly because of declining chemical prices and a lower return from stakes in Methanex Corp. and NGC Corp. The gas transmission business had profit of $49 million, up $1 million, while Nova Gas International contributed $5 million, down from $6 million. TCPL Deserves Little Sympathy Globe & Mail George Watson is feeling unloved. How do we know? Because the chief executive of TransCanada PipeLines said as much during a recent conference call to discuss his company's first-quarter results. Mr. Watson said TransCanada hasn't gotten the kind of credit it deserves from the oil and gas industry. The pipeline giant, he said, has been "much maligned" and "never given credit" for the moves it has made over the past few years, responding to the needs of natural gas producers by adding more capacity. This lack of recognition, the TransCanada CEO candidly admitted, "pisses me off sometimes." Does Mr. Watson have a right to feel miffed? That depends on how you look at it. He would argue that TransCanada has done its best to meet producers' needs, but has been hampered by federal regulations. Others would say the company has been asleep at the wheel and let opportunity pass it by. For example, it's instructive to compare the fate of the Alliance pipeline -- which is currently in regulatory hearings but is expected to be approved and begin construction next year -- and TransCanada's latest aborted pipeline proposal, Viking Voyageur (pipelines are given exciting names to hide the fact that building one is as interesting as watching paint dry). The Alliance consortium got together in late 1995 and was roundly ignored by both TransCanada and Nova Corp., which dominates the gas pipeline game in Alberta. As the concept gathered momentum in 1996, the two existing pipeline giants turned from ignoring it to outright ridicule. This didn't stop senior producers from signing up to support Alliance -- in fact, if anything, it encouraged them. Both TransCanada and Nova have complained that federal and provincial regulations have made it hard for them to respond to producers as quickly as they would have liked. It is worth noting, however, that the two virtual monopolies didn't start griping about being hamstrung until Alliance came along -- a project backed by producers who were tired of waiting. When TransCanada finally started taking Alliance somewhat seriously, it was already arguably too late. Nevertheless, the company announced with much fanfare the Nexus project, a $4-billion expansion of its pipeline east from Alberta, a project it promised would more than meet producers' needs. After a lukewarm reception from the industry, this proposal went under the knife and emerged as the slimmed-down $2.7-billion Viking Voyageur. This included a line down into the U.S. Midwest, plus a new line that would parallel TransCanada's main line running east from Alberta to Ontario and feed into Viking. The new pipeline, called TransVoyageur, was marketed as a producer-backed project similar to Alliance. Lack of interest soon put the nail in TransVoyageur's coffin too, and TransCanada eventually changed its proposal to one that would simply expand its existing line to hook up to Viking Voyageur. Now it would appear that Viking Voyageur itself has joined the others in the dustbin of history. This month, the oil and gas industry declared a truce with Nova and TransCanada -- an industry accord that was designed to win Alliance relief from Nova's and TransCanada's hostility in the National Energy Board hearings, in return for producers' approval of their proposed $14-billion merger. But even before the accord came along, it was obvious that TransCanada had failed and that Alliance would win. Simply put, by the time Viking Voyageur even got off the ground as an idea, Alliance already had long term commitments from dozens of senior gas producers to fill its pipeline instead. As far back as last fall, industry analysts said the future looked bleak for Viking Voyageur. TransCanada, however, continued to promote it as a superior project and all but a done deal. Then, a little more than a week ago, one of TransCanada's main partners in Viking Voyageur -- Northern States Power Co. of Minneapolis -- announced that since not enough producers had agreed to commit their gas to the pipeline, it was pulling out. If this was not the project's death knell, it was darn close -- although TransCanada said it was still talking to its other partner, Nicor Inc. TransCanada has so far refused to pronounce Viking Voyageur officially dead, despite the fact that Mr. Watson told analysts it attracted contracts worth just 33 million cubic feet a day of gas -- or less than 3 per cent of what it was supposed to carry. You could probably attract as much interest by stapling requests for supply to telephone poles in downtown Calgary. Still, TransCanada has only said that it is "reviewing its options," and that the pipeline is shelved for the time being. Like most projects, there is the chance that in the future there will be enough demand that TransCanada can rejuvenate it, but for now it is pushing up the daisies. Does TransCanada deserve any sympathy for that? Not really. The race goes to the swift. Saxon Petroleum's Majority Owner Makes Offer For All The Shares The Financial Post Saxon Petroleum Inc. said yesterday its major shareholder, Forest Oil Corp., is offering to buy all its shares outstanding on the basis of one Forest share for 48.1 shares of Saxon. The proposal values shares of the Calgary-based producer at 46› each. Denver-based Forest owns 65% of the shares, according to Saxon's latest annual report. The bid does not preclude Saxon from finding a superior competing offer, something it says it intends to do. Saxon shares (SXN/TSE) closed yesterday at 44›, up 6› from when they last traded on April 27. In the past nine months, the stock ranged from a high of 99› on Aug. 26 to a low of 34› on March 31. Saxon had profit of $61,542 (0› a share) in 1997, on revenue of $23.8 million. The firm produced an average of 2,868 barrels of oil equivalent a day last year. The company hired Griffiths McBurney & Partners last August to help it maximize shareholder value. Chevron Sees Oil Price Rising Above $18 Chevron Corp. chief executive Ken Derr said on Wednesday he expected the price of crude oil to rise to above $18 a barrel in the next few months. Derr also told the annual meeting of shareholders in New Orleans that Chevron was sticking to its plans for capital and exploration spending of almost $4 billion this year. ''Prices have improved some in the last month and I think they will be back over $18 a barrel in the next few months,'' he said. Derr said he believed recent oil price weakness was caused by one of the industry's periodic downturns and did not represent a structural change in oil prices. Chevron planned to invest almost $4 billion this year, he said, with about $1.5 billion earmarked for U.S. projects, particularly in deepwater areas of the Gulf of Mexico. A further $1.1 billion would be invested in worldwide refining and marketing operations and some $800 million for worldwide chemical projects. ''We have enough confidence in Chevron's opportunities to set the largest capital and exploratory budget in our history,'' he said. Exxon CEO Sees Crude Prices Recovering Exxon Corp (XON) Chairman and Chief Executive Officer Lee R. Raymond said Wednesday he expects crude oil prices to recover from their current low levels and that he was optimistic about future industry growth. ''Crude prices have historically fluctuated, and I believe that they will recover from current levels,'' Raymond told shareholders at an annual meeting in Dallas, although he did not say when he thought prices would rise, or by how much. He said he expected the Asian economies to return to ''robust growth'' in the near future and the world economy to continue its growth, boosting energy demand. ''I see good reason for optimism,'' he said. ''Oil and gas in particular will be needed, and we expect demand to increase at around 2 to 3 percent a year. Petrochemicals should grow even faster at 4 to 5 percent a year on average.'' Despite a dramatic decline in crude prices in recent months, he was optimistic about Exxon's upstream operations. ''In exploration and production, the prospects for profitable growth appear better today than they have been in more than 20 years. Technological advancements and recent decisions by many countries to open up and encourage foreign investment have greatly expanded prospective areas,'' he said. He pointed to Exxon's exploration and production ventures in West Africa, the former Soviet Union, the Gulf of Mexico and South America as reasons for optimism going forward. ''As fields come on stream from both established and new areas, we expect steady increases in production well into the next century,'' Raymond said. The world's oil companies upstream results have been hit by a sharp decline in crude prices but Exxon, like some other integrated oil companies, has been able to cushion the blow with strong results in its refining and marketing operations and its chemicals unit. Raymond said Exxon's chemical unit has shown sales and earnings growth above the industry average and he expects that trend to continue. He also predicted additional gains in its refining and marketing businesses.

To: Kerm Yerman who wrote (10459)	4/30/1998 11:33:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING WED., APRIL 29, 1998 (5) IN THE NEWS Spec 20 Listed Wolverine Energy Corp. (WVE/ASE) reports that production testing at West Ghost River (100% working interest) has confirmed very significant natural gas reserves as a result of the Company's horizontal drilling efforts in the area. Two horizontal sections were drilled from the Wolverine Salter 2-32-26-8W5M wellbore to a target at 15-29-26-8 W5M. One horizontal leg was drilled into the Upper Mount Head formation and encountered just over 310 meters of horizontal gas pay. During production testing, this leg was flowed at variable rates to simulate pipeline delivery pressures. Test rates reached as much as 8 MMscfd at a flowing wellhead pressure of 2290 psi however additional reservoir stimulation (acidizing) is required to optimize the well deliverability. Testing also confirmed earlier estimates that the produced gas contains only 3.5% H2S thus reducing earlier surface loss estimates. The well did not produce any associated hydrocarbon liquids or water during testing operations. An independent engineering reserve estimate was performed by McDaniels and Associates and as a result of the horizontal drilling, 20 Bcf of total proven reserves have been assigned to the Upper Mount Head formation with another 10 Bcf of probable reserves. As a result of this recent success, Wolverine Energy now estimates that the Upper Mount Head formation at West Ghost River has the potential to duplicate the performance of the nearby Ghost River Gas Unit (12.5% working interest) which originally had 80 to 90 Bcf of marketable gas reserves in place. Development plans for the West Ghost River area now include an additional 2 drilling locations, that are expected to add 10 to 20 Bcf per well, and the construction of the pipeline to tie the gas into the Shell Jumpingpound gas plant. In the South Ghost River area (100% working interest), 3D seismic will be shot to confirm earlier seismic interpretations prior to drilling the first well on this structure. Wolverine Energy has also identified 2 wells within the Ghost River Gas Unit (12.5% working interest) for horizontal drilling application to fully exploit the proven reserve base in the Unit. Based on these activities, Wolverine Energy now estimates the Ghost River area to have the potential of over 150 Bcf of natural gas reserves. The second horizontal leg drilled off of the 2-32-26-8 W5M wellbore reached a length of just over 360 meters in length and targeted the Lower Mount Head and Turner Valley formations. The Company now estimates the Lower Mount Head formation to have the same reserve potential as the Upper Mount Head formation. Additional drilling and testing is required to evaluate this prospective horizon. Wolverine Energy Corp. continues to pursue its natural gas growth strategy in the central and southern Alberta foothills through property acquisitions and farm-in opportunities. Wolverine Energy expects natural gas to provide significant growth opportunities for the Company and intends to focus its 1998 capital programs on this commodity. Edge Energy Inc. has entered into a purchase and sale agreement with a senior oil and gas producer under which Edge Energy will acquire interests (averaging approximately 36%) in the Otter property for a total consideration of $5,625,000. The Otter property is located approximately 300 kilometers northwest or Edmonton on the Peace River Arch. These interests compliment Edge's existing holding of approximately 9% in a portion of the property and its recently acquired 100% interest in one-half section of crown land contiguous to the acquired properties. The property currently produces approximately 650 barrels per day (210 net to the acquired interests) of light gravity crude oil from the granite wash and slave point formations. Included in the package are interests in the associated facilities including two oil batteries and approximately 35 kilometers of pipeline. Third parry processing and other fees net of operating costs relating to the acquired interests in the facilities were approximately $130,000 in 1997. Edge has identified a number of drilling opportunities on the property, which the company intends to pursue shortly after closing the transaction. The acquisition is subject to title review and rights of first refusal whereby certain parties have a right to acquire the properties by matching Edge's offer. Notice under these rights of first refusal have been issued and it is anticipated that the transaction will close on or about June 2, 1998. INTERNATIONAL Companies Calgary-based Bow Valley Energy Ltd. is forging on with its controversial project in the Middle East, hoping to finalize a new partnership by the end of June. Walter DeBoni, president and chief executive, said yesterday he is in discussions with a new partner for the company's Balal oilfield in Iran, aiming to complete a deal by early summer. He would not elaborate on the nature of the partnership or who is involved. "The new partner isn't North American.... The company's original partner for Balal backed out in January because of the Asian financial crisis," DeBoni said while speaking at the Canadian Oilpatch Investor Conference in Toronto. He said two-year-old Bow Valley now has working interests in six fields in the British North Sea, as well as its interest in Iran. It also has an exploration site in southern England. DeBoni said the company is currently pursuing other exploration sites and it hopes to purchase working interests in six to eight more fields in the North Sea within the next two years. And while some Canadian oil executives may shy away from expanding their businesses into the Middle East, DeBoni said all are welcome. "There's never been an interruption in the past and I can't see that changing," he said. "The government of Iran and business people welcome Canadian companies with open arms." DeBoni said Bow Valley has projected minimal production for 1998, but hopes to boost production to just less than 4,000 barrels of oil a day in 1999 and more than 8,000 barrels a day by 2000. INTERNATIONAL Countries Kazakhstan's Oil and Gas Reserves, Output Seen Climbing Kazakhstan's oil and gas reserves could rise five-fold if drilling later this year in the Caspian Sea confirms initial estimates, an official from state oil and gas company Kazakhoil said on Wednesday. Investment director Zhakyp Marabaev told a conference if the forecasts are correct, then total Kazakh reserves will rise to 117 billion barrels of oil and 282 trillion cubic feet of gas. The bulk of the reserves are under the mineral-rich Caspian Sea where experts have estimated Kazakhstan's share to be 95 billion barrels of oil and 177 trillion cubic feet of gas. "Exploratory drilling in the offshore area shall start later this year and its results will show the correctness of the estimates," Marabaev said. He added that significant new reserves may also be discovered in the continental part of Kazakhstan and in the Aral Sea shelf in the east of the country. "New field discovery prospects (in the Aral Sea) are assessed as being very high," he said. Proven oil reserves of 20.5 billion barrels could support production up to 1.5 million barrels per day (bpd), three times higher than current output. Oil production could jump to 2.6 million bpd in the next 15 years but the rise will depend on whether enough pipelines are built to allow land-locked Kazakhstan to pump its crude to world markets. "If no new additional pipelines are constructed, total oil exports from Kazakhstan to the international markets shall stop at 1.4 million bpd," said Marabaev. He added that Kazakhstan's domestic demand was not likely to grow very much and most new production could be exported. Oilmen have long touted the Caspian, surrounded by Russia, Azerbaijan, Iran, Turkmenistan and Kazakhstan, as the world's next great oil frontier. But development has been held up by squabbling over the legal status of the sea and disagreement about pipeline routes. Seven pipeline projects have been proposed from the Caspian but some of the routes are rapidly becoming the subject of a diplomatic tussle between the United States and Russia. The U.S. government has been pushing hard for oil and gas pipeline routes which bypass Iran and at the same time avoid Russia. Another issue which has held up progress is years of wrangling over who owns what resources under the Caspian Sea, but agreement now seems close. Russian President Boris Yeltsin and Kazakh leader Nursultan Nazarbayev are due to sign a pact carving up northern part of the Caspian seabed during Yeltsin's visit to Kazakhstan in July. Cina's Role In Asian Oil Market Becomes More Important, Says Expert China has played an increasingly important role in the Asia-Pacific regional and global oil markets, an expert from East-West Center said Tuesday. Speaking at the CGES (Center for Global Energy Studies) Annual Conference, Fereidun Fesharaki, Director of East-West Center, said that given its size of consumption, potential for future growth, and rapidly changing trade patterns, "China's role in the Asian oil market will become even more important". During 1997, China's demand for petroleum products increased 9.4 per cent and reached nearly 3.7 million barrels per day. Consumption was 2.6 million b/d in 1992 and 3.4 million b/d in 1996. On the supply side, China's domestic crude oil production reached 3.2 million b/d in 1997, up from 2.8 million b/d in 1992 and 3.1 million b/d in 1996. The production growth rate during this period was in average of 2.5 per cent. For 1998 and 1999, however, overstock of refined products and cooling down of the Chinese economy in late 1997 and early 1998, coupled with the financial crisis in Asia mean that the high oil demand growth in 1997 cannot be maintained, Fesharaki said. On outlook for China's oil demand, supply and trade to 2010, he said, future oil demand growth remains strong in China, but given the uncertainties facing many countries in the region amid the financial crisis, China's oil demand growth in 1998 could be considerably lower than the demand growth in 1997. For the period from the beginning of 1998 to the end of 2000, China's petroleum product demand is forecast to increase at an average annual rate of 5.4 per cent, reaching 4.2 million b/d by 2000. By 2005 and 2010, China's petroleum product consumption is forecast to reach 5.4 and 6.6 million b/d, respectively, according to Fesharaki. As China is now joining the ranks of other Asian oil importers searching for large amounts of oil imports, Fesharaki said "China's role in the Asian oil market will become even more important".

To: Kerm Yerman who wrote (10459)	4/30/1998 11:53:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING WED., APRIL 29, 1998 (6) ENERGY TRUSTS Reserve Royalty Corp. (TSE/ROI) announced today that it has entered into a Letter Agreement to swap all of the working interests in oil producing and undeveloped lands in two areas; Bow Island, Alberta and Weyburn, Saskatchewan to the operator in exchange for a basket of oil and gas gross overriding royalty interests and $550,000 in cash. The acquirer will allow Reserve to create a new royalty on the Weyburn working interest lands being transferred. The producing assets and undeveloped lands being transferred by Reserve have a Net present Value of an estimated $16,000,000 on which the company has achieved 97 percent conversion to royalty interests with an excellent industry partner. The effective date of the deal will be April 1, 1998 and closing, which is subject only to formal documentation, is tentatively set for May 6, 1998. The operator will be commencing a horizontal drilling program on the Weyburn lands subsequent to closing the transaction. PIPELINES TransCanada PipeLines Limited filed a $984 million facilities application with the National Energy Board (NEB) to provide new firm transportation service of about 275 million cubic feet (MMcf) of natural gas per day to customers in eastern Canada, and the U.S. midwest and northeast by November 1, 1999. The 1999 facilities construction program continues TransCanada's successful efforts to significantly expand its natural gas pipeline system in Canada. ''This expansion proposal is consistent with our strategic objective of being the low-cost transporter of natural gas to multiple markets across North America,'' said George Watson, president and chief executive officer. ''The application reflects our desire to provide customers and producers with timely, low-cost pipeline capacity and the flexibility they need to meet the demands of a growing, deregulated marketplace.'' The expansion proposal calls for construction of 560 kilometres of pipeline loop and four additional compressor units. It is fully supported by firm supply, committed demand and unconditional transportation precedent agreements. It is estimated to increase the Eastern Zone toll by $0.007 per gigajoule (GJ) in the expansion's first full year of operation. The resulting Eastern Zone toll for the year 2000 is estimated to be $0.958 per GJ (excluding fuel), an increase of 0.7 per cent over what the toll is estimated to be if no construction took place. Should this application be approved and the facilities constructed by November 1999, TransCanada will have expanded its delivery capability by about 1.2 billion cubic feet (Bcf) per day since November 1996. Combined with the 700 MMcf per day expansion into Chicago by Northern Border pipeline, 30 per cent owned by TransCanada, these expansions will have increased delivery capability from the Western Canadian Sedimentary Basin by 1.9 Bcf per day between 1996 and 1999. This has resulted in the differential between Alberta and NYMEX market prices narrowing by 50 per cent in the forward markets. ''The outlook for continued low-cost expansion on our pipeline system is positive, particularly in light of the recent accord with western Canadian producers that supports the regulatory changes necessary to encourage continued pipeline expansion from western Canada,'' said Bob Reid, president, Canadian Mainline. Westcoast Energy's Pipeline Division (Westcoast) announced today that it is seeking an expression of interest (open season) from shippers wishing to obtain Zone 3 and Zone 4 firm service capacity on the company's mainline transportation system. Zone 3 is the mainline from the Fort Nelson area to Station 2 near Chetwynd, British Columbia. Zone 4 is from Station 2 to the Canada/U.S. border at Huntingdon, located south of Chilliwack. The firm service would commence on Zone 3 on May 1, 1999 and/or November 1, 1999. Firm service on Zone 4 would commence on November 1, 1999. This open season is in addition to and follows Westcoast's initiative in late 1997 to increase Zone 3 capacity by 60 million cubic feet of gas per day (Mmcfd) for November 1, 1998 in response to producer and shipper demands. The open season will enable Westcoast to assess the market demand for new transportation capacity, plan for the orderly expansion of its system, and issue 10-year expansion contracts to those shippers requesting the firm service. "We are responding quickly to the producers, marketers and end use customers who have indicated an interest in additional transportation capacity," said Bill Harlan, Vice President, Customer Service & Marketing. "Northeast BC is making a growing contribution to the supply of natural gas to markets in Canada and the United States." Expansion of Westcoast's mainline capacity will provide the link between the abundant gas supplies accessed by Westcoast's pipeline system and the markets the Company serves. It provides for an orderly, gradual and cost effective way to provide additional supply to customers. MISC INFO RELATED TO KERM'S LISTINGS Spire Energy Ltd. has retained Griffiths McBurney & Partners as financial advisors to review alternatives for maximizing shareholder value that may include a sale of the Company, a merger, acquisition, restructuring or other type of business combination. Spire is a well financed energy company that is focused 100% on natural gas production. The Company produces 11.5 MMCFD of natural gas from the Abee and Oyen areas of Alberta. Spire operates 99% of its production and operates three gas processing facilities. Spire holds an average 77% working interest in its developed land base and an 83% working interest in its undeveloped land. Griffiths McBurney & Partners provides investment banking, institutional sales, trading and research services to the business and investment community and has offices in Calgary, Toronto and Montreal EARNINGS Crestar Energy / Top 20 Listed Message 4261798 Shell Canada Ltd Message 4261705 Gulf Canada Resources Message 4261862 American Leduc Petroleums Limited Message 4261915 Landhawk Petroleum Corporation Message 4262123 Eurogas Corporation Message 4262145 Nova Corp. Message 4261637

To: Kerm Yerman who wrote (10459)	4/30/1998 12:07:00 PM
From: Kerm Yerman	Read Replies (12) \| Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING WED., APRIL 29, 1998 (7) EXCHANGE DATA In the U.S., oil-drilling stocks rose, as the Philadelphia Oil Service Index (OSX) closed up 5.99 to 117.90. Oil drillers gained after R&B Falcon Corp. (FLC) said it expected operating income to rise as contracts for its drilling rigs rolled over at higher prices. Falcon rose 1-15/16 to 32-1/8. Camco International (CAM) rose 4 1/2 to 66 7/8, Cooper Cameron (RON) rose 3 1/16 to 65 15/16, and Smith International (SII) jumped 4 1/16 to 59 7/8l. Schlumberger Ltd. (SLB) closed up five at 83-7/16. Halliburton Co. (HAL) gained 2-5/8 to 55. Dow member Chevron (CHV) rose 15/16 to 83 1/4 to lead oil producers, and the AMEX Oil Index (XOI) gained 4.07 to 485.71. The TSE 300 Composite Index gained 0.6% or 41,86 to 7609.53. In comparison, the TSE Oil & Gas Composite Index gained 0.1% or 4.14 to 6532.34. Among sub-components, the Integrated Oil's gained 0.1% or 6.22 to 8434.73. The Oil & Gas Producers lost 0.0% or 0.10 to 5826.85 and the Oil & Gas Services gained 0.5% or 14.87 to 3113.53. Pacalta Resources, Petro-Canada, Vermilion Resources, Gulf Canada Resources and Blue Range Resources were listed among te top 50 most active traded issues on the TSE. There were no producers among the top 50 net gainers. Percentage gainers included International Rochester 16.7% to $1.75, Spire Energy 12.1% to $1.85, Black Rock Ventures 11.1% to $1.00, Crowne Joule Exploration 10.3% to $1.60, ML Cass Petroleum 10.1 to $1.20, OGY Petroleum 9.1% to $1.20, Post Energy 8.0% to $4.75 and Founders Energy 6.3% to $1.19. On the downside, Paramount Resources fell $0.75 to $15.25 and Renaissance Energy $0.45 to $27.30. Percentage losers included TransGlobe Energy 7.3% to $1.02, Benson Petroleum 7.1% to $1.30, Paramount Resources 4.7% to $15.25, Best Pacific Resources 4.2% to $1.15, Zargon Oil & Gas 4.1% to $3.07, Vermilion Resources 4.0% to $8.50 and Pacalta Resources 3.8% to $10.15. There weren't any service companies listed among the top 50 most active traders on the TSE. Shaw Industries gained $3.00 to $54.00, Dreco Energy Services $1.35 to $54.35 and Ensign Resource Services $.60 to $31.25. There weren't any service companies listed among the top 50 percentage gainers. IPSCO fell $1.00 to $43.00, Computalog $0.75 to $21.25 and Canadian Fracmaster $0.70 to $18.60. Bromley Marr lost 8.0% to $0.92. Over on the ASE, First Star Energy, Dalton Resources, Enterprise Development, Wolverine Energy, AltaPacific Capital, Stellarton Energy, HEGCO Canada, Anvil Resoures, Oxbow Exploration, Raptor Capital and Jerez Energy were among the top 25 most traded issues. Kintail Energy gained $0.15 to $0.90, Telford Resoures $0.15 to $0.95, Total Energy Services $0.15 to $2.20, Meota Energy $0.13 to $2.20, Scarlet Exploration $0.11 to $1.12, AltaQuest Energy $0.10 to $3.50, Corlac Oilfield $0.10 to $0.70, Derrick Energy $0.10 to $1.60, Del Roca Energy $0.10 to $0.20, Storm Energy $0.10 to $0.55 and Wolverine Energy $0.10 to $1.20. On the downside, EGCO Canada fell $0.20 to $3.20 and Belfast Petroleum $0.15 to $2.70. EXCHANGE NOTICES Cherryhill Resources Inc. announced the completion of its Major Transaction on April 23, 1998 after having received approval from its shareholders at the Special and Annual General Meeting. The company, whose shares will now be transferred to the regular board of The Alberta Stock Exchange, is no longer a Junior Capital Pool corporation. The Major Transaction involved the acquisition of interests in petroleum properties in the Rocanville area of southeastern Saskatchewan at a cost of $300,000. An independent engineering evaluation prepared recently on the properties by McDaniel and Associates Consultants Ltd. reported a net present value, using escalated pricing assumptions, of $569,200 for proven reserves ($661,800 for proven plus 50% probable), discounted at 15%. The net present value, based on constant pricing and discounted at 15%, is approximately $598,200 ($689,600 for proven plus 50% probable). Total production from the properties is estimated at 40-45 BOEPD. Cherryhill's immediate plans are to identify and acquire additional producing reserves in western Canada. Discussions are also being held with the company's joint venture partners to further develop the Rocanville properties. QR Canada Capital Inc. (QRI/ASE), a junior capital pool corporation listed on the Alberta Stock Exchange (ASE), announces that it's proposed Major Transaction to acquire oil and gas properties in the provinces of Alberta and Saskatchewan from PRL Resources Inc. was approved by the shareholders of the Corporation on March 3, 1998 and that the Corporation has since closed its purchase of the subject properties for $487,000. In connection with the approval of the Major Transaction the shareholders of the Corporation also approved of the private placement of up to 2,500,000 units of the Corporation at $0.40 per unit. Each unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one additional common share of the Corporation upon payment of the exercise price of $0.50. The Corporation received and accepted subscriptions for 1,000,000 units, for gross proceeds of $400,000, subsequent to approval of the Major Transaction. Notwithstanding that the ASE made acceptance of the Major Transaction conditional upon receipt of subscriptions for 1,500,000 units for gross proceeds of $600,000, the ASE has accepted the Major Transaction and the private placement of 1,000,000 units. The Corporation was unable to close the final $200,000 due to market conditions. However, the Corporation has $100,000 in unallocated funds available and keeps the previously announced private placement open until May 8. No additional oil and gas acquisitions will be undertaken until further funds are raised. NYMEX Bets on Oman, Dubai for Asia Oil Futures The New York Mercantile Exchange (NYMEX) plans to launch a new crude oil futures contract for Asia based on Oman and Dubai crudes, industry sources said on Tuesday. The timing of the launch has not been finalised, but the news comes as the Singapore International Monetary Exchange (SIMEX) is under pressure to drop its Brent crude contract. Oil futures have struggled for support in Asia, despite its growing oil demand, but oil industry sources said they were optimistic the NYMEX contract would work. "If it's a good contract, trade will grow. There is enough critical mass to make a market," one source said. Oman and Dubai are two of the most actively traded crudes on the Asian spot market. Together they are used as the basis for official price setting by the governments of Saudi Arabia, Iran and Kuwait -- three of the key power houses in theOrganisation of the Petroleum Exporting Countries (OPEC) -- who produce a combined 14 million barrels per day (bpd) of oil, or 19 percent of world supplies. However, their output is almost entirely sold on a term contract basis, which means little, if any, gets onto the spot market. Oman is also used by Qatar as the basis for setting the official selling price for its 670,000 barrels per day (bpd) of oil production. And Dubai is already established as the benchmark for Middle East and Asian pricing, with a strong derivatives market, although traders worry about its long term viability because of declining production. Current Dubai production is 250,000 bpd, while Oman produces 900,000 bpd. The oil industry sources said the NYMEX contract would be launched on the exchange's electronic trading system called ACCESS and be weighted to Oman/Dubai on a 50/50 basis. The system already lists its crude, unleaded gasoline and heating oil futures contracts, which NYMEX also lists in an open-outcry market during New York hours. NYMEX officials, exchange president Patrick Thompson, who were in Singapore earlier on Tuesday, told oil industry executives that the contract had the support of Middle East producers. But the sources said they were sceptical this would mean the producers would trade the instrument. Middle East producers rarely, if at all, hedge their production. "It would appear they have support from the Middle East. Whether that support would extend to real participation is another question," one industry source said. However, oil sources said that the contract could survive without Middle East participation. "It would be nice to have Middle East producers trading the contract, but the contract is not based on having Middle East producer supporting it to work," a source said. Another source said the contract would survive in the absence of Middle East producers using it to hedge their own production programmes, but it would "take off" if they did trade it. NYMEX has been cautious in developing the contract, holding regular meetings in Asia with oil traders on what type of contract would work best, after the launch of several futures contracts by SIMEX failed to garner sufficient oil industry support. Asia consumes around 18 million bpd of crude oil, half of which is provided by Middle East producers. Previous crude contracts in the region have found that the timing of their launch worked against them. SIMEX launched a Dubai futures contract in 1989, only to see a year later Iraq invading Kuwait, precipitating the Gulf War and drying up trade in the contract. A fuel oil futures contract lost support after the physical market focus moved to different specifications than those reflected in the futures contract. A SIMEX gas oil futures contract also failed and the current Brent contract is struggling to generate any sizeable trading volume. The International Petroleum Exchange in London has requested SIMEX delist the contract. NYMEX is not the only exchange on the verge of listing a new crude futures contract in Asia. The Tokyo Commodity Exchange (TOCOM) launched an Asian crude price index on April 1. If it gains the support of the oil trade, the exchange plans to launch a tradeable contract against it. RESEARCH NOTES Commentary RBC 98 YTD Avg. (USD per barrel): $15.82 Thru April 24, 1998 Crude Oil Commentary: Firstly, the RBC DS Weekly Energy Outlook will now be sent on Fridays - and waiting for you on Monday morning. As we correctly stated last week, prices started to consolidate and have now given up 50% of the gains as a result of the OPEC meetings a couple of weeks ago. Fundamentals remain neutral to bearish. The technical crude oil picture indicates that prices will remain stable with a slightly bearish trend still in tact. We look for a crude to find good support at $15.00, but would not be surprised to see prices test the old lows within the next few weeks. We would look to get long first at around $15.00 and if $15.00 breaks, we'd wait until we've seen $14.50 before potentially getting long. In conclusion, the market looks set to consolidate between $14.50 and $16.50 for the time being. Natural Gas Commentary: NYMEX gas prices rallied up towards their recent highs reaching a high of $2.63 as the result of ruptured pipeline rumors and expectations of bullish AGAs. Prices corrected quickly and have been sliding since (the technicals provided some valuable insight on April 14/15). We see good support at $2.30 (May) and $2.35 (June). If we break below these levels we se support at $2.25. The technical charts indicate that prices still have some room to fall ($2.25 by the time June becomes spot), and that the we may have seen the highs ($2.70). Now, how many actually thought $2.20 AECO in the summer would hold? Hate to say we told you so, but in all fairness, we have been recommending for some time now that producers begin hedging if they haven't done so already. AECO prices have dropped in tandem with the NYMEX, falling by more than $0.30 within a week (May-Oct). We seem to have found some support, but may see a further $0.10-0.15 sell-off. If we see $2.00 for the summer again, take it! Next gas year still remains a good sell. Hold off on the winter for now! Consumers should now be looking at targets (especially short term). Gordon Capital Canadian Natural Resources (CNQ-T: $30.05) BUY Q1 Results Due Week of May 11th CNQ expects to release its Q1/98 results the week of May 11th. We are expecting the company to report $1.00 vs. $1.44 a year ago. The company continues to work on the gas/oil ratio problem at its Pelican Lake heavy oil project. The use of "charge pumps" downhole below the progressive capacity screw pumps is meeting with success in some of the wells. This spring, CNQ is tying-in 100 mmcf/d of new gas production from its northern "winter" drilling areas. In the Mokman/Sukunka area of Murray River, the company will be drilling its next deep gas test this summer. Its most recent discovery well in this area tested at 30mmcf/d. Our CFPS forecast for this year is $4.65 and $5.60 in 1999. Our 12-month stock price target is $35.00. Berkley Petroleum (BKP-T: $13.60) BUY Southern Alberta Foothills Update Berkley has drilled and cased seven deep gas tests in the southern Alberta foothills. The farm-in on Bearcat Exploration at Turner Valley (40% interest) could potentially be in the 150-250 bcf range. The discovery features a 100 foot pay zone and a sulphur content of only 2.5%. The well tested at 3 mmcf/d, but could flow at 10 mmcf/d. A discovery well with Shell Canada at Turner Valley is currently testing. A third well at Turner Valley (60% interest) has missed its target (front edge), but will be whipstocked over the next 2-3 months. To the north of Turner Valley, at Voyager, Berkley has at least a 50 bcf Cardium (2 zones) discovery. At Cardinal - Mountain Park, the company has a 40% interest in a 50-70 bcf discovery. Finally, at Red cap, the exploration well has drilled into the Mississippian of what is a 200 bcf prospect. Our fully diluted CFPS is $1.30 in 1998 and $2.20 in 1999. Our stock price target is $17.00. Templeton Management Ltd. Templeton Management Limited have, in transactions on the Toronto Stock Exchange completed on April 27, 1998, purchased 150,300 shares of Renaissance Energy Ltd. The shares, together with previously acquired shares, represent 10.08% of the issued shares of such class. Capital Group Co.'s Capital Group Cos. Inc. slashed its holding in Abacan Resource Corp. in <b<March, the Ontario Securities Commission insider trading report shows. Capital sold almost 5.5 million shares for $2.04 to $2.40 each to hold 4.1 million, and sold 175,000 for US$1.50 or US$1.53 to hold almost 2.6 million. J.P. Morgan J.P. Morgan said it initiated coverage of Exxon Corp. with a market performer rating. Exxon is one of the best-run oil companies in the world and the analyst is bullish on its longer-term prospects, but believes the shares currently are fairly valued. -- The 1998 earnings estimate was $2.83 per share, and $3.15 for 1999. -- The medium-term operating environment is likely to hurt Exxon's 1998 and 1999 earnings. Crude oil prices and ethlyene margins are forecast lower than in 1997. -- Crude prices should begin to rebound in 1999, but ethylene's recovery was not expected until 2000. -- The stock has had a good run so far this year, up 20 percent. END - END - END

To: Kerm Yerman who wrote (10459)	5/1/1998 11:11:00 AM
From: Kerm Yerman	Read Replies (4) \| Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING THURS., APRIL 30, 1998 (1) MARKET WATCH Street Retakes Lost Ground The TSE rose, on expectations of improved corporate earnings and signs that the U.S. Federal Reserve will not raise interest rates boosted the Dow to its best gain in four weeks. Canadian stocks also rose on the U.S. reports, which boosted expectations of strong corporate earnings. "Financial markets breathed a major sigh of relief on the news, since the data alleviates pressure on the Fed to tighten policy imminently," Toronto broker Nesbitt Burns said in a report today. The markets jumped at the start of trading after U.S. gross domestic product data showed the economy grew at a 4.2 percent rate in the first quarter versus a 3.7 percent pace in the preceding quarter and against expectations of a 3.3 percent rate. But the GDP price index rose by a modest 0.9 percent, the slowest rate of growth since the autumn of 1963. "Everything pointed pretty clearly to less fear of inflation in the U.S. -- that's what fueled the market," said Conor Bill, ScotiaMcLeod's director of retail trading. Investors "looked at the numbers, looked around and decided the party might be going," Bill added. By comparison, Canadian GDP rebounded 0.9 percent in February to a level equal to that before the January ice storm. The Toronto Stock Exchange 300 composite index rose 55.46 points, or 0.7%, to 7664.99, after earlier rising as high as 7720.8. About 121.7 million shares changed hands, compared with 106.4 million shares traded Wednesday. Share volume was worth C$178.3 million. Advancers outpaced decliners 328 to 125 with 191 issues unchanged. All of Toronto's 14 subindexes rose except for golds, which fell 2.88 percent. The banking sector, which rose 1.15 percent, helped drive Toronto higher. Financial service stocks make up more than 23 percent of the TSE 300. BCE Inc. and Royal Bank of Canada led the rise.. BCE (bce/tse) gained $1 to $60.90, Royal Bank (ry/tse) jumped $1.20 to $85.40, Toronto Dominion Bank (td/tse) rose 75› to $65.30 and National Bank of Canada (na/tse) rose $1.30 to $29.50. Utilities, real estate and pipelines also marched upward. Seagram (vo/tse) paced the advance, gaining 80› to $61, after earlier rising as high as $62 on rumors that it's in talks to buy British music company EMI Group PLC. Better-than-expected earnings from telecommunications companies Telus Corp. and Fonorola Inc. helped lift the TSE utilities subindex 1.9%, its biggest one-day jump since April 14. Telus (t/tse) rose $1.45 to $38.55. In April, merger talks with AT&T Canada Long Distance Inc. collapsed. Yesterday, Telus said its first quarter earnings rose 55% to 44› a share. Telus surpassed analysts' estimates of 43› a share because of increased revenue from its local phone unit. Fonorola (FON/TSE) rose $1.60 to $64.20. The Class B shares of takeover target WIC Western International Communications Ltd. gained 1.75 to 42.75 after CanWest Global Communications Ltd. said it has increased its takeover offer to C$43.50 per share for all class A voting and class B non-voting shares and extended the offer to May 12. CanWest fell 0.20 to 26.80. ($1 $1.43 Canadian) Other Canadian markets finished higher yesterday. The Montreal Exchange portfolio rose 13.55 points, or 0.4%, to close at 3853.96. The Vancouver Stock Exchange rose 4.95 points, or 0.8%, to close at 629.54. The Alberta Stock Exchange gained 13.16 or 0.6% to 2276.41. Today's Expectations " Canadian dollar - Stronger, 1.4290 - 1.4340 " Canadian money mark et - Stronger, flattening bias remains " Canadian bond mark et - Stronger, steepening bias " US bond mark et - Slightly stronger " Canada - US spreads - Canada outperforms Today's Market's " Bond Market The optimistic sentiment has returned to the US Treasury mark et following yesterday's outstanding inflation news. The mark et should retain its positive bias today, as this morning's economic numbers are unlik ely to upset the good inflation story. With no significant economic reports scheduled in Canada, the stronger Canadian dollar is expect to help the Canadian mark et outperform the US modestly today. " Money Market While only limited interest was seen last night, the Canadian money is expected to retain yesterday's positive tone. Buyers will continue to pick away at the curve today, as fears of Bank of Canada action fade further. With the currency on firmer footing, more aggressive players will once again return to the longer maturities and some mild flattening is anticipated. " Foreign Exchange The extremely tight ranges that contained the Canadian dollar overnight are expected to widen modestly today. While the mark et was unable to hold the currency on the strong side of the 1.4300 level yesterday, short-term technicals suggest that another push through the figure should be anticipated today. However a dramatic move stronger is not expected during the session. U.S. stocks rallied after reports showing fast U.S. economic growth with little inflation made it more likely that interest rates will remain tame and earnings robust. The Dow Jones industrial average rallied 111.85 points, or 1.3%, to 9063.37. Merck & Co. (mrk/nyse) led the way, rising US$4 1/2 to US$120 1/2. About 702.2 million shares were traded on the Big Board, up from about 642.1 million shares traded Wednesday. The Standard & Poor's 500 index gained 17.15 points, or 1.6%, to 1111.77, and finished April with a 1% gain. The Nasdaq composite index jumped 16.77 points, or 0.9%, to 1868.41. General Electric Co. and Coca-Cola Co. also contributed to the advance. Coca-Cola (KO/NYSE) rose US$2 1/4 to US$75 7/8, while GE (GE/NYSE) rose US$2 13/16 to US$85 1/8. Shares of financial companies gained on expectations that low interest rates will spur demand for loans and make it more profitable for brokerages to trade stocks and bonds. BankAmerica Corp. (bac/nyse) jumped US$3 to US$85, Citicorp (cci/nyse) rose US$1 9/16 to US$150 1/2, Travelers Group Inc. (trv/nyse) rose 5/8 to US$61 3/8 and Morgan Stanley Dean Witter & Co. (mwd/nyse) rose US$2 3/16 to US$78 7/8. Yesterday's rally made the second-richest man in the U.S. richer. Warren Buffett, chairman of Berkshire Hathaway Inc., saw his stake in the Omaha-based investment company rise in value by US$287 million to US$32.8 billion. Berkshire's stock (BRKa/NYSE) climbed US$600 to US$68,600 a share. Food stocks also rose, boosted by unexpectedly strong sales at Nestl‚ SA, the world's largest food maker. Hershey Foods Corp. (hsy/nyse) rose US$2 3/8 to US$73 1/4, Sara Lee Corp. (sle/nyse) rose US$1 9/16 to US$59 9/16 and Conagra Inc. (cag/nyse) rose US$1 3/16 to US$29 3/16. Looking ahead to Friday's trading day, market players said the stock market will likely take its cues from the bond market once again, with the NAPM data most prominent. Additionally, while many European equity markets are closed Friday, the performance of currency markets ahead of the expected coronation of European monetary union this weekend could be a factor -- at least as far as the dollar's fluctuations affect the bond market. However, in the stock market, the expectation is for some reversal from Thursday's ascent, barring a sharp rally in the bond market. Gains in the past two days are "not enough to totally reverse the breadth damage" that occurred late last week and on Monday, said Greg Nie, chief technical analyst at Everen Securities. "The market is still a little out of synch, [and] may be vulnerable to choppiness in the very near term." Stepping back a bit, Nie observes that stocks are hostage not so much to the direction of interest rates but the "speed, and pace of change." Long-bond yields gradually rose to 6.05% in the first quarter without much disruption to equities, he notes. That's in stark contrast to the activity this week, when sharp moves in bond prices sent stocks moving in a corresponding fashion. Therefore, the stock market can march higher if some stability emerges in the bond market, a prospect greatly enhanced by Thursday's economic news. "That willingness to step in and buy on weakness reinforces my sense that this rally has the capability to go past overbought to overdone," the technician said. "The intermediate trend remains bullish," and the Dow could be headed to as high as 9,600 in the foreseeable future. Looks like happy days are here again (again). Major international markets finished the day broadly firmer. London: British shares closed sharply higher, ignited by a strong rally on Wall Street. The FT-SE 100 index closed at 5928.3, up 95.2 points, or 1.6%. Frankfurt: German shares were off slightly, but closed with hefty gains after new data soothed fears of a U.S. interest-rate hike. The Dax index closed at 5107.44, down 1.04 points. Tokyo: Share prices in Japan climbed Thursday after sharp losses earlier in the week, while those in Jakarta fell for the fifth consecutive day on worries over intensifying student protests. Other Asian markets closed generally mixed. Tokyo's benchmark Nikkei Stock Average of 225 selected issues gained 245.83 points, or 1.60 percent, closing at 15,641.26. It had dropped 254.52 points on Tuesday, closing at its lowest level since Jan. 14. Japanese financial markets were closed Wednesday for a national holiday. Traders said blue chips and banking issues led the Nikkei index higher. They had been under selling pressure early this week because the government's economic stimulus package, released last Friday, did not include the permanent tax cuts investors had hoped for, they said. But trading remained thin because of the "Golden Week" string of holidays in Japan. Tokyo markets will also be closed next Monday and Tuesday. Some traders said investors were holding back before the announcement of first-quarter U.S. employment and gross domestic product figures, due later Thursday in Washington. Kuala Lumpur: Malaysian shares finished nominally higher following a number of announcements, including details of a merger and the Singapore government's denial of a deal to buy land in the island state controlled by Malaysia's railway company. The key index closed up 3.14 points at 625.97. In Jakarta, share prices were dragged down by poor corporate earnings, fears over the increasing student protests and worries over a possible delay in the disbursement of part of the International Monetary Fund's dlrs 43 billion bailout loan. The JSX composite index closed 1.1 percent lower at 460.135 points, after losing 4.2 percent Wednesday. "Foreign investors see it as too risky to put their money here. The trend is definitely down," said Peter Arkell, head of sales at Kleinwert Benson. In Seoul, share prices gained for the second consecutive day on the government's decision to abolish foreign stock holding limits by June and raise the foreign stock ownership limit in state-run companies, analysts said. The key index gained 4.17 points to 421.22, after rallying 3 percent Wednesday. In Hong Kong, share prices closed moderately lower in thin trading as market sentiment remained grim. The blue-chip Hang Seng Index lost 0.8 percent, closing at 10,383.68. It had lost 1.94 percent Wednesday. Traders said they were expecting further losses in the week ahead. Bangkok: Thai stock prices ended marginally lower in thin trading ahead of a long weekend, with little reaction to the monthly release of central bank economic statistics late in the day, dealers said. The key index lost 0.12 points, closing at 412.13. Manila : Philippine stocks finished higher after the release of better than expected first-quarter corporate earnings, traders said. The key index jumped 2.2 percent to 2,181.32. Singapore: The benchmark index closed slightly lower, with persistent fears of more corporate defaults in neighboring Malaysia and rising interest rates in the United States, dealers said. It slipped 8.71 points, closing at 1,493.40. Sydney: The key Australian share index ended moderately higher, the first positive close in five sessions, with media shares and gold miners leading the way. It finished at 2,762.1, up 0.5 percent. Wellington: The key New Zealand stock index finished higher, although brokers said the market was weighed down by high short term interest rates. It closed up 6.41 points at 2,256.54. Friday Morning Most European financial markets were closed for the May Day holiday on Friday, but U.S. economic data and strong corporate results boosted those that opened. Europe's biggest stock market, London, began firm on the back of good corporate results and the impact of Wall Street's 1.25 percent rise on Thursday. The Amsterdam market also jumped more than 4.0 percent in early trade, catching up on the rest of the world following a market holiday on Thursday. European Union ministers meet over the weekend to take key decisions on the launch of monetary union, but foreign exchange dealers said they did not expect that to have significant repercussions on Friday. "The meeting won't really affect anything, but with most of Europe on holiday, liquidity is short," a dealer at a U.S. investment bank said. Analysts said there were signs that Japanese efforts to talk up the yen were waning. "Verbal intervention which has sometimes worked, does not seem to having any effect," Knuthsen said. In Europe bumper results from Anglo-Dutch consumer group Unilever and Britain's B.A.T sent London's blue chip FTSE 100 more than 0.5 percent higher in early trade. But with most continental markets closed and the London market taking Monday off, traders said they expected business to be very quiet. UK data showing record consumer credit being offset by further signs of malaise in the manufacturing sector had little impact on the FTSE. Unilever surged 41p to 681.5p and B.A.T 1.77 percent, or 10p to 573p, after first quarter figures topped expectations. "Unilever's results are excellent, B.A.T excellent, also there's talk of corporate activity around still and that's keeping us steady despite Europe being on holiday," said one dealer. "There's just no bad news around." Unilevers's results were also a major factor behind the rise in Dutch shares, with the AEX index hitting a high of 1,178.11 points -- up 50.49 points -- within the first hour of trade. The index remains off its record high set on April 22, when it just failed to breach 1,200 points. Markets at 0914 GMT CURRENCIES (figure in brackets previous London close) Dollar/mark 1.7920 marks (1.7945) Dollar/yen 133.32 yen (132.1300) STOCK MARKETS London - FTSE 100: 5983.0 points, up 54.7 or 0.92 percent Frankfurt - Closed PARIS - Closed Precious Metals (figures in brackets previous London PM fix) Gold - $306.25 per ounce ($308.25) Silver - $6.17 ($6.10) Brent crude oil futures $14.57, up $0.11 Shares slumped 2.5 percent in Indonesia Friday after President Suharto ruled out political reform before the end of his tenure in 2003. Many other Asian markets were closed for the May Day holiday. Prices of basic commodities have soared and the government has said it will raise fuel and electricity costs by June, deepening the economic burden on Indonesia's 200 million people. The Jakarta Stock Exchange's Composite Index fell 11.610 points, or 2.5 percent, to 448.525. Shares prices rose sharply both in Hong Kong and Australia in reaction to overnight gains on Wall Street. The Hang Seng Index, the Hong Kong market's key indicator of blue chips, rose 180.00 points, or 1.7 percent, closing at 10,563.68. Brokers said the Hong Kong market was boosted by overnight gains on Wall Street, where the the Dow Jones industrial average rose 111.85 points to close at 9,063.37. Australian share prices closed stronger, driven by industrial stocks, in response to a buoyant U.S. market. The Sydney's All Ordinaries Index rose 42.1 points, or 1.5 percent, to 2,804.2. Japanese stock prices slipped in subdued trading ahead of a four-day holiday weekend in Japan. Tokyo's benchmark Nikkei Stock Average of 225 selected issues shed 40.16 points, or 0.26 percent, closing the week at 15,601.10 points. Among losers were some banking issues, apparently hurt by a major Japanese economic newspaper report Friday that Japan's 19 ax losses for the fiscal year, which ended March 31. New Zealand share prices closed slightly lower, drifting downwards after a strong start to the session on the back of good finishes in the U.S. and Britain's share markets. The NZSE-40 Capital Index fell 3.25 points, or 0.1 percent, to 2,253.29. The markets were closed for May Day celebrations in the Philippines, Taiwan, South Korea, Singapore, Malaysia and Thailand. Bulls Roar Back On News Of Low Inflation The Financial Post Stock and bond markets surged again yesterday, as news of continued low inflation in the U.S. rekindled bullish sentiment. The news was enough to ease fears among traders that higher interest rates were imminent, a though two reports showed the U.S. and Canadian economies are growing rapidly. The Dow Jones industrial average closed at 9063.37, up 111.85 or 1.3% on the day. It hit 9128.64 at one stage, putting it just 52 points off its record close of last week. The Toronto Stock Exchange 300 composite index was held back by a 2.9% plunge in gold stocks, but still gained 55.46, or 0.7%, to close at 7664.99. The rally was fuelled by hopes a weaker than expected 0.7% first quarter rise in U.S. employment costs would convince the Federal Reserve to refrain from raising interest rates. "The Fed needs a strong rationale to cool the red-hot economy if it wants to guard against the boom/bust scenario," said Timothy Rogers, managing economist at Boston based Technical Data. "Inflation simply doesn't cut it." The market was rocked earlier this week by a still-unconfirmed report the Fed had shifted to a "tightening bias," which could be the first step to a rate hike. Analysts expect an increase in the U.S. would have to be matched in Canada. Higher rates are designed to slow the economy and head off inflation, but they also tend to crimp corporate profits. While wage inflation remains stalled, the U.S. economy roared ahead at a 4.2% annual growth rate in the first quarter, according to a Commerce Department estimate. In Canada, February's economic growth was better than expected, after January's slowdown because of the ice storm in eastern Canada. Gross domestic product grew 0.9% over the previous month, enough to put it on a robust 3.4% annual growth pace, Statistics Canada reported. "With the storm behind them, manufacturers staged a full recovery, while retailers and wholesalers made up only half their January declines," StatsCan said. News of strong growth helped bolster the C$, as traders eyed a possible rate hike down the road by the Bank of Canada. The C$ gained US0.28› to close at US69.88›. "With a number of components still showing only a partial retracement from this storm, we expect another solid gain of 0.5% in March," said Paul Ferley, assistant chief economist at Bank of Montreal. The ice storm's toll was felt in the insurance sector, whose contribution to GDP tumbled 11.5% as damage claims were paid. "The bulk of claims should be in the numbers by now, but there will be some further losses in March," said Randall Powley, senior economist at Scotia Capital Markets. Despite the rebound in February, slower growth is expected in the first quarter than a year earlier - half a point to a full percentage point less, at an annualized rate. Sherry Cooper, chief economist at Nesbitt Burns Inc., has calculated the economy might have expanded by 3.5% in the first quarter, but will come in at 2.75% because of the storm. The lingering effects of the storm "will prove temporary, with a full rebound expected in March and, particularly, in the second quarter," she said.