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

To: Kerm Yerman who wrote (11112)	6/5/1998 11:22:00 AM
From: Kerm Yerman	Read Replies (1) \| Respond to of 15196

MARKET ACTIVITY / TRADING NOTES FOR DAY ENDING THURS., JUNE 4 1998 (3) TOP STORIES Canada energy stocks rally on crude price rise CALGARY, June 4 - Canadian energy stocks rallied on Thursday as crude prices rose amid expectations of further world oil output cuts by the ''Riyadh Pact'' group of major producing nations. The Toronto Stock Exchange oil and gas subindex climbed 96.21 points, or 1.58 percent, to 6,129.76 as investors reacted to a $0.52 a barrel jump in NYMEX July West Texas Intermediate oil prices. NYMEX crude fetched $15.33 a barrel in late morning trade. Big gainers in Toronto included Suncor Energy Inc. (SU.TO), up 0.80 to 52.10, Talisman Energy Inc. (TLM.TO), up 0.70 to 39.55, Alberta Energy Co. Ltd. (AEC.TO), up 0.75 to 32, and Anderson Exploration Ltd. (AXL.TO), up 0.70 to 16.15. Oil prices rose as oil ministers from Venezuela, Saudi Arabia and Mexico met behind closed doors in Amsterdam to discuss dropping production by as much as 500,000 barrels a day. The cutback would follow a similar pact reached in March aimed at lifting depressed prices. There was also speculation on Thursday that Iran may bow to pressure from the other OPEC nations to abide by production levels agreed to in the Riyadh Pact, analysts said. ''The other producers are putting pressure on Iran to cut production, so there could be 700,000 barrels cut,'' said Scott Inglis, analyst with FirstEnergy Capital Corp. in Calgary. Despite agreeing to a cut of 140,000 barrels a day in March, Iran has increased production by 185,000 barrels since the pact was struck, according figures compiled by FirstEnergy. Inglis said he believed that Canadian oil stocks could rise four to six percent over the next two months, and the WTI benchmark could reach the $18 mark by the fourth quarter, if the production cuts hold. ''Oil shares have hit bottom and oil prices have hit bottom and a lot of people have been waiting for that to change. Today we saw the technical bounce,'' he said. Canadian oil producers go global in big way The Financial Post Canadian producers cranked up oil production outside the country by almost 47% last year, while natural gas volumes went up a more modest 4%, says a consultant's report to be released today. Ian Doig, an independent Calgary consultant, doesn't expect to see the same sort of growth this year as low oil and gas prices are causing firms to slice capital budgets. "I would expect the increase on the oil side will be more modest this year," he said. "A good part of the pluses in the last year have been acquisitions rather than discoveries." The report said 40 Canadian firms produced 479,569 barrels a day of oil and natural gas liquids outside the country at the end of 1997, up nearly 50% from the 326,805 barrels that flowed daily in 1996. About 16 Canadian companies went after international gas plays and produced 597 million cubic feet of gas a day last year, compared with 576 million cubic feet in 1996. The purchase of Norcen Energy Resources Ltd. by Union Pacific Resources Group Inc. of Texas and Gulf Canada Resources Ltd.'s sale of North Sea assets to Kerr-McGee Corp., another U.S. firm, may bring down the 1998 figures when the report is issued next year, Doig said. Observers say factors causing firms to go global include: a maturing basin in Canada is yielding smaller finds, formerly closed countries are opening their petroleum industries to foreign operators and investors are enthused by the chance of large overseas discoveries. "I think people have come around to the view that if you're not in heavy oil in Western Canada and you want profile, then you have to go somewhere else," said Don West, president and chief executive of Rigel Energy Corp. The tough task of finding light oil in Western Canada convinced Rigel to shift its attention to the North Sea, where it has drilled several wells and bought land. Bob Ohlson, president of Niko Resources Ltd., which is producing gas in India, said the potential prizes -- bigger reserves and sometimes better prices -- are worth the difficulties of longer lead times, higher costs and equipment sourcing headaches. "It's not easy to walk into a new country and do a deal. It takes a certain amount of time and expertise." In total, 200 Canadian companies held land, made sales or had operations in 121 countries in 1997. Doig gathered data from annual reports, press releases and personal contacts. Rumors swirl of Anderson takeover Houston's Coastal Corp. identified as possible bidder The Financial Post Shares of Anderson Exploration Ltd. jumped almost 12% yesterday amid speculation a U.S. company will make a takeover offer soon. Its shares (AXL/TSE) rose $1.80 to close at $17.25 on volume of 1.4 million shares, more than three times its average of the past three months. They reached an intra-day high of $18.75. The company issued a statement saying it did not know what caused the surge in the share price. Company officials were not available for comment. Several analysts fingered Coastal Corp. of Houston as a possible bidder. A company spokeswoman said there is no substance to the rumor. "This is the first we've heard of it," said Vicki Guennewig. A Calgary-based intermediate, Anderson is gas oriented and has performed well in recent months on investor and analyst expectations that Canadian gas prices will climb this fall as new pipeline capacity comes onstream. The stock hit a 52-week high of $19.40 on April 16, while the low of $12.50 was set Jan. 12. The company also owns half of Federated Pipe Lines Ltd., an oil and natural gas liquids pipeline in British Columbia and Alberta. The system currently moves 235,000 barrels a day. The hope for higher gas prices, plus a strong US$, have caused numerous U.S. companies to flow across the border and snap up properties and firms. The deals have varied considerably in size. The most recent, Marathon Oil Co.'s announcement last week of a takeover bid for Tarragon Oil & Gas Ltd., totalled US$1.04 billion, including debt. With a market capitalization of about $2.2 billion, an offer for Anderson would rank behind the sale earlier this year of Norcen Energy Resources Ltd. to Union Pacific Resources Group Inc. for US$3.5 billion. Gord Currie, analyst with Canaccord Capital Corp. in Calgary, said Coastal as a buyer makes sense because it has agreed to ship 150 million cubic feet a day on the Alliance pipeline. The proposed $3.7-billion line, scheduled to begin operation in 2000, will run from northeast British Columbia to Chicago for access to lucrative U.S. markets. Coastal owns 14.4% of the pipeline, whose fate is now being decided by the National Energy Board. "Coastal has a chunk of Alliance and Alliance runs right through Anderson's backyard, and Coastal has said it wants reserves to back up that commitment," Currie said. But Peter Linder, with CIBC Wood Gundy Securities Inc., dismissed the merger talk. "There is no deal in the works," said the Calgary analyst, who believes Anderson is worth $22 a share. Currie said the combination of gas-weighted assets and the pipeline could prompt a bidding war for Anderson. Alberta Energy Co. Ltd., another gas-focused independent, concentrates on northwestern Alberta, which is home to much of Anderson's properties. While energy firms' stocks have slumped with the downturn this year in oil and gas prices, a combination of stock and cash might work for AEC. "It would be an expensive war, which would limit the number of buyers," he said. AEC does not comment on possible acquisitions, an official said. Other rumored suitors include Apache Corp. of Houston, Devon Energy Corp. of Oklahoma City, Okla., and Chevron Corp. of San Francisco. Bob Gillon, with John S. Herold Inc. in Connecticut, said founder J.C. Anderson and his management team have done a good job building the company through exploration and acquisitions. "We think highly of the management and have a lot of confidence in them." He said Coastal has not been very active in the past few years in increasing its exploration and development business. Anderson reported profit of $11.3 million (9› a share) on revenue of $195.2 million in its first quarter ended Dec. 31. It flowed 561 mmcf/d of gas a day in the quarter, putting it in the top 10 of Canadian gas producers. It stepped into the upper ranks with its audacious takeover of Home Oil Co. in the fall of 1995, when it beat out a rival bid from much larger Amoco Corp. PetroCan, Ultramar venture draws fire Competition The Financial Post An $8.5-billion joint venture proposed by Petro-Canada and U.S.-based Ultramar Diamond Shamrock Corp. suffered a major setback yesterday when the federal Competition Bureau expressed "serious concerns" about it under Canada's competition laws. While the bureau has not decided to block the deal at this point, it has reached a stage in its five-month review where it felt it had to be open about its assessment, said assistant deputy director Jim Bocking. "We have serious concerns and that was conveyed to them," Bocking said. "They will want to make further submissions to us and bring some other material to our attention and we'll consider it." He would not reveal what the concerns are because the issue is still under review by the bureau, which is headed by Konrad von Finckenstein. Petro-Canada, which had first hoped to close the transaction by the second quarter and then by the third quarter, said the Competition Bureau's assessment came as a surprise. However, the Calgary-based integrated oil company said it's not backing off from the deal. Completion of the joint venture is subject to getting the approval of competition authorities. "They have questions and concerns about most aspects of the impact of the deal on competition," said spokesman Rob Andras. "Their level of concern and the degree of scrutiny that they are interested in expressing means we have to spend some time talking to them and really understand what those concerns are and how they can be addressed." The joint venture, announced Jan. 6, would combine Petro-Canada's and Ultramar's refining and marketing assets in Canada, Michigan and several New England states. The combination would make the operation the largest overall downstream business in Canada. Jim Stanford, Petro-Canada's president and chief executive officer, billed it as a "refinery and marketing powerhouse" at the company's recent annual meeting. It would operate five refineries with a daily capacity of 500,000 barrels of crude oil, 3,500 retail outlets and would provide heating oil to more than 300,000 customers. The partnership's initial revenue base is estimated at $8.5 billion. At least one industry competitor, Shell Canada Resources Ltd., said the joint venture would prompt others in the industry to seek similar partnerships to maintain competitiveness and control costs. Independent gasoline marketers have for years complained about excessive concentration, which they say is pushing more and more independent retailers out of business. In a joint release yesterday, the two companies said they are continuing to pursue the joint venture. "Certainly we are looking at more intensive conversations with the board than we had thought prior to a meeting [held yesterday between the bureau and senior officers of the two companies]. "We will have to really determine what the next few steps are after those conversations." The bureau usually approves such deals if it is satisfied that they do not lessen competition. Petro-Canada and Ultramar, based in San Antonio, Tex., have several options, including abandoning the transactions, addressing all concerns, or going before the quasi-judicial Competition Tribunal. Bocking estimated only 5% of the transactions brought before the board cause serious competition concerns and require remedies. He dismissed suggestions that the bureau, which will also have to review the two pending large Canadian bank mergers, is sending a signal that it's not going to just rubber stamp transactions. "Every transaction is different," Bocking said. "We have a team dedicated to this transaction, composed of lawyers and economists and experts. Other things don't matter." U.S. says its sanctions stalled Bow Valley's Iran bid The Financial Post The U.S. claimed yesterday its economic sanctions against Iran are the main reason Bow Valley Energy Ltd.'s bid to develop an Iranian oilfield has stalled. Undersecretary of State Stuart Eizenstat said Bakrie Minarak Petroleum Ltd., the former Indonesian partner of Bow Valley, bailed out of the US$180-million offshore project because of U.S. sanctions. "This has delayed the investment of Bakrie's Canadian partner, which must now seek new partners to replace Bakrie and to provide the financial resources necessary to carry out the project," Eizenstat told a congressional committee. He admitted Bakrie's decision was also linked to the Asian economic crisis, but insisted the Iran-Libya Sanctions Act played an important role. Dinesh Dattani, vice-president of Calgary-based Bow Valley, said its former partner did not specify why it was dropping out of the project. Bow Valley is talking to other investors, but has not yet finalized a new financing deal. The Canadian company is already under investigation by the U.S. Treasury Department for apparently violating the Iran-Libya Sanctions Act in its bid to develop the 117-million-barrel Balal field 66 kilometres off the coast of Iran. But there is little it can do to apply sanctions since Bow Valley has no assets in the U.S. The U.S. government can only seize property or assets inside the country. The administration is trying to sell Congress on a U.S.-European Union pact that would limit sanctions on European countries under either ILSA or the Helms-Burton law against Cuba. The deal would allow President Bill Clinton to waive a section of the Helms-Burton law that bars executives from entering the U.S. if their companies are operating on expropriated land in Cuba. Toronto-based Sherritt International Corp.'s directors and executives have been barred from the U.S. under the law. In exchange, EU members agreed not to give government support to companies from their countries wanting to set up operations on property expropriated in 1959 from U.S. citizens by President Fidel Castro. The U.S. has dropped its investigation of an Iranian project by France's Total SA and its Malaysian and Russian partners. Eizenstat said there was little it could do, since the companies don't have assets in the U.S. "We concluded that the imposition of sanctions would not prevent the project from proceeding, though such a step would have had major negative effects on other U.S. interests," he told the House International Relations Committee. He also said there was little the U.S. could do to force other countries to go along with its sanctions. "We will not succeed by attempting to force our allies to our position. We need to lead them." Ottawa is unlikely to sign on to the U.S.-EU pact because it disagrees sanctions are an effective way to bring about reform in Cuba. "There's not a lot of enthusiasm for it," said Dextor Bishop, a spokesman for Canada's Foreign Affairs Department. Chaos play Forbes Magazine One unintended victim of Indonesian chaos is Calgary-based oil producer Gulf Canada Resources (NYSE: GOU). At a recent $4.75 a share, its stock is down from its $9.44 high in September. Much of Gulf Canada's troubles have to do with bad timing. First, its former chief executive, J.P. Bryan, assumed $770 million in debt to increase the company's oil assets, just as Canadian oil prices-tied closely to West Texas crude-began falling fast. Then Indonesia began its political meltdown, shortly after it hired Goldman, Sachs to sell 28% of its stake in Gulf Indonesia Resources (NYSE: GRL) in an IPO last September. The company still has a 72% stake in its Indonesian subsidiary, which had 1997 revenues of $157 million and contributed 16% of parent GOU's $414 million 1997 cash flow. NationsBanc Montgomery Securities' analyst Tyler Dann says The Street has overreacted. Most of Gulf Indonesia's assets are on the island of Sumatra-hundreds of miles from the rioting. He also thinks nationalization of the oil industry is highly unlikely, since Indonesia's new military-backed government is eager to reestablish that country's international standing. Aside from the political turmoil, Gulf Indonesia's business looks strong. Its Corridor natural gas project will soon be capable of producing 160 million net cubic feet of natural gas per day, and by 1999 should account for 22% of parent Gulf Canada's total cash flow. Recent discoveries at an adjacent drilling site, South Jambi "B," also look promising. Things are looking up in Calgary as well. Gulf Canada's new chief executive, Richard Auchinleck, is setting the balance sheet straight. His goal is to pay down $570 million of debt, and he has already raised $489 million from selling noncore assets in the U.K., the Netherlands and Australia. Dann thinks Gulf could get a boost this summer after OPEC's June 24 meeting. Production cuts would hike crude prices by as much as 13%, he says, to $17 per barrel. But even if oil prices stay flat, there's plenty of upside: The value of GRL, trading at a recent $14.25, isn't currently accounted for in GOU's price. One share of Gulf Canada entitles the stockholder to 0.182 shares of Gulf Indonesia, a value of $2.59. Add that to Gulf Canada's current price and you get over $7, a 55% premium to current levels.

To: Kerm Yerman who wrote (11112)	6/5/1998 11:43:00 AM
From: Kerm Yerman	Read Replies (3) \| Respond to of 15196

MARKET ACTIVITY / TRADING NOTES FOR DAY ENDING THURS., JUNE 4 1998 (4) TOP STORIES, Con't Bullish Growth Bullen Family Taking Dynafrac To New Heights Calgary Sun Neatly displayed in Brent Bullen's spacious and artistically decorated office are the first three cheques his company, Dynafrac Well Services Inc. received after it was formed in 1997. They are from Windstar Energy, Inuvialuit Energy and Neutrino Resources, all well-respected junior oil and gas companies. Bullen, now that names rings a bell. It should, too, for Brent is the son of Ron Bullen, founder of Canadian Fracmaster Ltd., which in 1976 became the first western energy company to sign a joint venture with the Soviet Union, and later became one of the largest foreign oil producers in the then Soviet Union. The company even rehabilitated 720 oil wells in China. Everyone in the oil and investment industry knew about Canadian Fracmaster, and as Brent Bullen puts it, "I grew up with the company." Yet times and events move on, and Canadian Fracmaster is no longer in Ron Bullen's hands. But Brent, 33, certainly learned a lot about business acumen from his father -- and from his membership in the prestigious world-renowned The Executive Committee (TEC). He now runs his own companies. Not only is he president of Dynafrac -- which some have nicknamed "the son of Fracmaster" but also of the Valens Group, which he founded in 1992, and which built two large hotels and a school in Siberia, and got involved in other endeavors in the former Soviet Union, too. Yet, he's slowly winding down his business interests in Russia because "some of the business practices there no longer make it an attractive environment." It's easy to read between those lines. Coincidentally, shares of the original Fracmaster have fallen a drastic 50% in the past seven weeks, including 22% this past Tuesday alone. Some analysts blame its heavy involvement in the former Soviet Union. Whatever, Brent Bullen decided to return to his roots and formed Dynafrac, which does exactly what Fracmaster did and does, developing equipment, processes and chemical techniques to increase productivity from oil and gas wells with high pressure treatments, including fracturing, acidizing, chemical squeezes, nitrogen and coil tubing. "We've already developed products and technology that have exceeded the excellence of our competitors' products," says Brent. "We intend to be one of the major well service players in Western Canada and we are being very innovative and aggressive about it." As an aside, Dynafrac's board of directors includes not only his father, Ron, but William Gordica, former president of Beta Well Services Ltd., and Ron Simard, former president of Nowsco Well Services. No wonder Dynafrac's growth has been so rapid. Bullen says Canada is the world leader in oil and gas well servicing technology, and part of the reason is the challenges working in both cold and warm climates has presented the industry. "There's no doubt the industry's ability to extract oil from small formations -- or pools -- have made us world leaders. Our stimulation and recovery methods have made pools that would be uneconomical in other parts of the world, very viable here." Leading the way, he says, is what both Dynafrac and the Canadian oil and gas industry is all about. And the Bullen's family has surely proven that. Fracmaster can't explain share slide The Financial Post The shares -- and instalment receipts -- of Fracmaster Ltd. hit the skids yesterday, although the company said it did not know of any reasons for the selloff. The Calgary-based well service firm issued two news releases after the Toronto Stock Exchange and the Montreal Exchange asked for an explanation of its slumping stock price. The shares (FMA/TSE) slid in intraday trading to a 52-week low of $10. They were off $3 on the day, closing at $10.50. The volume of 190,650 shares was more than three times the daily average of the past three months. Fracmaster's share price has been chopped in half since the start of 1998. In its statements, the company said the second quarter is traditionally weak because warm spring temperatures reduce activity. Low oil prices were also blamed. Fracmaster said it now expects earnings per share for the year to range between 75› and 80›, down 30% from analysts' estimates. Company executives could not be reached for comment. Analysts said the real problem lies in Russia, which contributed 70% of last year's earnings and was expected to provide about half this year's. With the ruble taking a pounding, operations in Russia, where the company produces oil and provides contract services and equipment, are being squeezed. "It's not good -- the economics over there are just really poor at the moment," said Janet Spensley, a Calgary analyst with FirstEnergy Capital Corp. The news could get worse for investors who are holding instalment receipts, created in last fall's secondary offering when former owner Alfred Balm sold his 67.5% stake in the firm. The receipts, obliging investors to pay $9.75, fell $3 to $1 yesterday. Their 52-week high was $17.50. They could be taken off the TSE if it follows recent form. In an unprecedented step, the TSE suspended trading May 27 in Boliden Ltd.'s instalment receipts because they collapsed in value after toxic tailings escaped from a mine in Spain. Libyan oil find too hot for investors The Calgary Herald Putting out the word about a huge oil discovery should boost a company's share price, right? Well, not in the case of Red Sea Oil, a company with a registered office in Vancouver, a technical centre in Dubai, a listing on the Alberta Stock Exchange and a super well in Libya. Alex Schneiter, Red Sea's Dubai-based vice-president of exploration, met about 40 Calgary analysts and investment dealers on Tuesday, explaining what the company plans to do with its 83 million barrel find in the Libyan desert. Red Sea's shares, which had closed at $2.35 on Monday, fell to close at $1.74 on Tuesday before recovering to $2.05 on Wednesday. Calgary brokers say the drop wasn't related to Schneiter's presentation but to an institutional investor dumping a million shares that were picked up by other institutions. Salman Partners crossed a block of 500,000 shares and other brokers moved another 500,000 at an average price of $1.60. The sudden price shifts reflect the uncertainties of doing business with a rogue regime. Schneiter insists an American ban on U.S. companies doing business with Libya creates wonderful opportunities, but others aren't so sure. "I'm surprised there's not more Canadian companies there. There's so much upside, " Schneiter says "You have less competition and don't have to deal with the Americans. Libya is underdeveloped because there aren't as many companies there as there should be. "You go places that are a bit more difficult, but you get very good acreage and very good upside. "We've never had any problem whatever. No company in Libya has ever had a problem producing or selling oil. It's comparable to doing business in the U.K. or Canada." Red Sea holds a 60 per cent interest in the 9,820 square km. NC177 exploration block in the southwest part of the prolific Sirte Basin. In November, the company drilled the BI-NC177 that tested at a rate of 6,800 barrels a day from four zones, and the company claims proven and probable reserves of 83 million barrels from the two upper zones. Red Sea now plans to drill two more appraisal wells and to re-enter an old well on a separate structure three km. away from the discovery. "It looks like they have found additional upside to the west of the original discovery and some of the leads they have look relatively attractive," says Nick Rontogiannis, a Calgary analyst with Salman Partners Inc. "The only thing I didn't like (about Schneiter's presentation) was he didn't get into the Libyan risk. I don't think investors in Canada appreciate the magnitude of risk. "I actually think operating in Libya is less risky than other parts of Africa, but the possibility of the rules changing underneath you is still there." Martin Layzell, an oil and gas advisor to Yorkton Securities, listened to the presentation and feels that "indications so far are very positive. The test rates indicate good reservoir quality and strong production potential. "Appraisal wells and seismic are going to be extremely important to determine the size of the pool. "Petroleum consultants classify Libya in the moderate category for political risk, but despite the current regime, the country remains fairly stable and there are only moderate barriers to doing business there." Schneiter says that Red Sea plans a $60 million U.S. development program that calls for production from the discovery well, one appraisal well and five development wells to be producing 27,000 barrels a day by the year 2000. The output will be moved about 100 km. to the Samah oil field through a $17 million U.S. pipeline. "We think we can double the reserves mainly from deeper targets we haven't penetrated yet," Schneiter says. "We stopped the discovery well at 8,500 feet because the rig wouldn't go beyond 9,500, and we will drill one development well to 11,000 feet to test the deeper zones. "The whole block is huge and we've been concentrating on just 20 per cent of it. We know all the southeastern portion is even more prolific than the discovery well because it's closer to the kitchen area where the oil is being generated in the basin." Sour Over Gas Line Ribey Farmer Slams AUEB Approval Of New Use A Rimbey-area landowner lashed out at the Alberta Energy and Utilities Board yesterday for approving sour gas transmission via the Crystal Pipeline, owned by Encal Energy Ltd. Phillip Hannemann said yesterday the regulatory system is geared against individual citizens. "If the oil industry is the organ grinder, the EUB is the monkey," complained Hannemann yesterday. "We put up some very good arguments pointing out the deficiencies." But an Encal vice-president said yesterday the Calgary company has always been confident the project is safe. Residents near Rimbey have fought more than a year against a board decision approving re-licensing of the 37-km pipeline, which runs to Gulf Canada Resources Ltd.'s Homeglen plant, about 70 km southwest of Edmonton. The line was originally designed for sweet gas, but Encal got board approval last year to switch to sour gas, which contains poisonous hydrogen sulphide. The board said yesterday that Encal has satisfied conditions, including corrosion mitigation, and relocation and installation of emergency shut-down valves. Encal vice-president of production Terry Barrows said transmission of sour gas could begin this weekend. All the bills aren't counted, but Barrows said the company has put in more than $1 million to the project. The board said the sour gas proportion in the line is low. About 15 families, including Hannemann, intervened at board hearings into the project, and a lesser number went to court last year to fight approval but lost, he said. "If there's ever any injuries or damages, we have some damaging evidence," he said, adding the board did not act to protect public safety or the public purse. He called the ruling contemptible. "The message to industry is this board will approve anything the oil companies want," said Hannemann. Hartland Buids Pipeline Assets June 4, 1998 The Financial Post Calgary's Hartland Pipeline Services Ltd. said yesterday it is buying the operating assets of three companies to increase its presence in large-diameter pipeline construction. The firm is paying an undisclosed amount for Waschuk Pipeline Construction Ltd., Waschuk Equipment Rentals Ltd. and Enertech Pipeline Systems Ltd. Mark Breakall, chief financial officer, said the price is not being released because Hartland is discussing another deal. In a statement, Hartland estimated Waschuk's operating assets to be worth $52 million. A private, 44-year-old firm based in Red Deer, Waschuk is one of the larger Canadian players able to build pipelines with diameters exceeding 30 ins. Breakall said Waschuk is running at full capacity, with contracts valued at $250 million over the next 26 months, so no layoffs are planned for its 700 employees. By sharing equipment and workers, Hartland hopes to reduce operating costs while improving utilization. Oil patch merger, by any other name, is TransCanada TCPL to dominate signs, executive office in deal with Nova Thursday, June 4, 1998 TransCanada PipeLines Ltd. will keep its name after merging with Nova Corp. in the latest display of TransCanada's dominance of corporate culture in the $15.6-billion deal. In an internal memo to Nova and TransCanada employees, TransCanada president and chief executive officer George Watson said the decision to keep Nova out of the soon-to-be-merged company's name wasn't taken lightly. "After much discussion over the information provided by the consultant hired to research a name for the new energy services company, it has been decided to retain the name TransCanada PipeLines Ltd. to provide us more time to address this issue," he wrote in the memo received by employees this week. Mr. Watson left the door open for a name change in the next year or so. However, industry observers say he is merely setting the stage for changing it to TransCanada Energy or TransCanada Services to reflect the company's diversification into power generation and other energy-related holdings. The TransCanada-Nova deal announced in January may be viewed as a "merger of equals" in lawyers' eyes or a "pooling of interests" by accountants, but what's really taking shape is TransCanada's takeover of Nova, industry watchers say. Even the future Calgary headquarters will be called TransCanada Tower, a 36-storey skyscraper to be built by mid-2001 by TransCanada and H&R Real Estate Investment Trust. TransCanada had dug up the dreary name of EnergyCo. to use in legal documents to temporarily describe the new company. Pundits have joked that monickers such as SuperNova, ChevyNova and TransAm wouldn't have blended in very well in serious documents. But when the merger closes in four weeks, Mr. Watson will be at the helm of a new pipeline giant with nine key TransCanada executives at his side. Only one of Nova's 11 leading executives will be joining TransCanada's top tier of managers. Nine of the Nova executives will be calling the shots at Nova's chemicals division, which will become a publicly traded company in July and retain its name, and another Nova boss will be leaving to pursue his own career path. Two of the nine TransCanada executives plan to retire later this year. Observers say that, with Nova executives bolting, it will allow TransCanada to put its stamp on the new pipeline giant. Hand-wringing over the corporate name game underscores the clash of cultures in the TransCanada-Nova deal in which industry pundits refer to TransCanada as "G.I. Joe" for its no-nonsense business approach and Nova is known as the "Care Bears" because of a less regimented and, some say, freewheeling style. Over the years, TransCanada has favoured a more hierarchical, button-down approach while, observers say, Nova emphasized greater employee input. In his strait-laced memo, Mr. Watson stressed that he values the hard work of all employees and respects the "strong foundations of the Nova and TransCanada heritages. . . . Whatever our company name, it must embody the dynamic, world-class energy services organization we will create." He also pledged to help "develop our own culture, values and vision as a new company. As part of this effort, we will address the issue of identifying an appropriate company name, and have the time to properly brand our company name so that it accurately reflects who we are and allows sufficient time for all of our stakeholders, including the financial markets, to understand who we are." Industry analysts say TransCanada is a well-respected name globally because its Canadian natural gas main line is one of the longest pipelines in the world and it has been a partner in numerous joint ventures abroad for many years. "It's not going to hurt you internationally having TransCanada in the name," said Robert Hastings, an analyst with investment dealer Goepel McDermid Securities Inc. in Vancouver. By contrast, Nova may be a star with marquee value at home in Alberta, but its pronunciation -- o-va -- in Spanish translates into "doesn't go," posing a problem for an image-conscious TransCanada with global holdings. "If TransCanada was going to change the name, it would have done so by now," said Mr. Hastings, whose own firm's name arose from the recent merger of Goepel Shields & Partners Inc. and McDermid St. Lawrence Securities Ltd. Shareholders of Nova and TransCanada will vote at separate meetings on June 29 to ratify the merger, which is to be followed by court approval June 30, paving the way for the deal to close July 2. On paper at least, Nova is slightly bigger than TransCanada. Nova gained 15 cents to $17.65 yesterday on the Toronto Stock Exchange, placing a stock market value of $7.97-billion on its common shares. TransCanada shares rose 35 cents to $34.10, giving it a market value of $7.65-billion. Nova shareholders will receive 52 TransCanada shares for every 100 Nova shares under terms announced in January. Nova Chemicals plans to issue 91.83 million common shares in July under an arrangement in which Nova Corp. shareholders will receive 10 shares of Nova Chemicals for every 100 shares in Nova Corp. TransCanada shareholders will get 20 shares of Nova Chemicals for every 100 shares in TransCanada. The new, publicly traded chemicals entity would trade around $34 a share initially, based on the recent share values of TransCanada and Nova. However, industry observers say the July issue price of Nova Chemicals will fluctuate with volatile commodity prices. Where they are going Nova executives: J.E. (Ted) Newall, Nova's vice-chairman and chief executive officer, and Nova president Jeffrey Lipton head the list of nine Nova executives jumping to Nova Chemicals. The seven others who will join them in the new executive suite are: Terence Poole, Daniel Boivin, Wes Lucas, Lawrence MacDonald, Jack Mustoe, Sheila O'Brien and Dale Speiss. Nova vice-president Kent Jespersen declined to jump to either TransCanada or Nova Chemicals, and will pursue his own career options. Bruce Simpson, president of Nova subsidiary Nova Gas Transmission Ltd., is the only one of Nova's top 11 executives joining TransCanada. Three other key Nova executives have accepted jobs with TransCanada: Randall Findlay, Brian Olson and Ronald Turner. TransCanada executives: TransCanada president and CEO George Watson will be president and CEO of the new TransCanada. Nine other current TransCanada executives will help Mr. Watson (two of those nine plan to retire later this year). TransCanada's new board: Nine of the 17-member board will come from Nova's roster of directors. Nova chairman Richard Haskayne, a friend and former business colleague of current TransCanada chairman Gerald Maier, will become chairman of the newly merged TransCanada. Mr. Maier will become chairman emeritus. Nova Chemicals' board: The 12-member board will draw six members each from TransCanada and Nova. Mr. Newall will be chairman and Mr. Maier vice-chairman of Nova Chemicals. Mr. Lipton will be president and CEO. Crude purchases cause oil markets turmoil Electronic Telegraph THE crude oil market was thrown into chaos last week when a tiny oil company bought 12.5M barrels of Brent crude over two weeks. The purchase by Arcadia Petroleum, an oil trading company owned by Japanese trading giant Mitsui, caused havoc because the price of Brent is the benchmark for all other North Sea crude oils. Arcadia is understood to have bought around 25 cargoes of wet crude in the last fortnight in May. This compares with a daily Brent output of 600,000 barrels and was enough, traders claim, to add $1.20 a barrel to the price of Brent crude. One petroleum expert said: "There were lots of complaints, but nobody could do anything about it." The price immediately dropped after Arcadia stopped its buying spree last Friday. From a high of 55 cents above July delivery last Wednesday, the price dropped to 65 cents below July delivery yesterday, or around $13.50 per barrel. London-based Arcadia, which employs just 25 people, was estimated by rivals to have made profits topping $20m dollars from the trade. However, a source close to the trading firm dismissed such reports as "rubbish". He indicated that the trader's profits were less than $10m from the transaction. Arcadia is understood to have acquired 10 cargoes to cover short sales, and to be keeping 15 cargoes in storage in South Africa. A source close to Arcadia confirmed that the company had entered swap transactions, saying: "We had to protect our exposure." He admitted that the effect of the purchase would be to raise the price paid by refiners, saying: "It doesn't take a brain surgeon to realise that if you buy quite so much Brent, the price will go up." There is no suggestion of any wrong-doing by Arcadia. It is normal trading practice for firms to exploit temporary market situations. END - END - END

To: Kerm Yerman who wrote (11112)	6/9/1998 11:59:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

FIELD ACTIVITIES / Goldwater Resources Announces Successful Well In California GOLDWATER RESOURCES LTD. - 61-9 WELL COMPLETED AS AN OIL AND GAS WELL Date: 6/8/98 3:42:17PM Stock Symbol: GWR The Board of Directors of Goldwater Resources Ltd. (the "Company") is pleased to announce that the 61-9 well located in Kern County, California, has been successfully completed as an oil and gas well. The well was drilled to 10,161 feet and has been cased and cemented with 5 1/2" casing. Electric logs confirmed earlier mud log reports which show 3 produceable zones of 10 feet, 12 feet and 100 feet. In addition, the well was set up for future re-entry to test lower Stevens Horizons 500 feet deeper. This will be done after depletion of reserves in the upper 122 feet of sands. Productions Specialties, the operator, estimates total costs are on the original budget. On Behalf of the Board of Directors (signed) -------------------------------------- George E. Scott President Tel: (604) 687-4750 Fax: (604) 687-7415 No Stock Exchange has approved or disapproved the information contained herein.

To: Kerm Yerman who wrote (11112)	6/9/1998 12:10:00 PM
From: Kerm Yerman	Read Replies (1) \| Respond to of 15196

CORP. / Colt Energy Normal Course Issuer Bid COLT ENERGY INC. - ANNOUNCES IT HAS OBTAINED REGULATORY APPROVAL Date: 6/5/98 6:29:01 PM Stock Symbol: COE COLT ENERGY INC. ("Colt") announces that it has obtained regulatory approval to proceed with a normal course issuer bid whereby Colt may purchase up to a total of 2,004,642 common shares representing approximately 10% of the common shares currently issued and outstanding in the public float of 20,046,424. It is expected that the normal course issuer bid will commence on June 10, 1998 and terminate on June 10, 1999. All acquisitions of common shares by Colt pursuant to the bid will be made through the facilities of The Alberta Stock Exchange at the market price. Colt is making a bid to stabilize the trading price and provide liquidity in the market for its common shares.

To: Kerm Yerman who wrote (11112)	6/10/1998 10:44:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

MARKET ACTIVITY / TRADING NOTES FOR DAY ENDING TUESDAY JUNE 9 1998 (1) MARKET OVERVIEW Resource stocks pull Toronto market down Weakening resource-based stocks put an abrupt end to the Toronto Stock Exchange's two-day rally on Tuesday. The Canadian stock market gave back some of the previous two sessions' gains as a golds-led selloff in resources ended in a modest loss. On Bay Street, the Toronto Stock Exchange 300 composite index fell 21.76 points, or 0.3%, to 7535.43. Today's halt brought the Toronto market's two-day rally to a screeching halt. Yesterday the market gained 48.96 points or 0.7 percent to 7557.19 adding to Friday's 22.84-point gain. Volume was 107 million shares, up from Monday's total of 74.4 million shares, and trading value jumped to $2.27 billion from $1.20 billion. Advancers lagged decliners 407 to 628 with another 297 shares unchanged Toronto's key index performed in line with the Dow Jones industrial average in New York. Overall in Toronto, nine of the TSE 300's 14 subindexes closed in negative territory led by a drop in the influential gold and precious minerals index. The August price for Comex gold dropped $2.90 to $295.50 after the European Central Bank said it would likely hold less gold in its reserves than the market expected. Trading has been cautious over the past few sessions, with many investors sitting on the sidelines ahead of congressional testimony by U.S. Federal Reserve Chairman Alan Greenspan today. "The culprit was natural resources," said Pat Blandford, senior vice-president at Midland Walwyn in Toronto. "The rocks, the trees, the oil, the gas, the gold." "That's not enough to write home about," Blandford said. The problem Tuesday at the TSE was not a new one. World commodity prices have been depressed for almost a year and that has created a big drag on the natural resource stocks. "We're bouncing around near the bottom," Blandford said. On the TSE, the gold and precious metals subindex posted the biggest decline, dropping 2.1%, after trading higher in the morning session. Investors bid prices lower after the European Union policy-making body indicated the new European central bank could hold only between 10% and 15% of its reserves in gold when traders were hoping for a higher percentage. ECB president Wim Duisenberg said on Tuesday after the inaugural meeting of the central bank council that it had reached consensus that between 10 to 15 percent of the central bank reserves will be in gold. The market was expecting the ECB to hold between five and 30 percent. This news drove another stake into the slumping gold sector which has dropped almost 16 percent in the past month and 32.4 percent in the past year. "The meeting in Europe had some people on edge," said Craig Strachan, manager of research services at TD Evergreen in Toronto. Gold heavyweight Barrick Gold Corp. led the gold producers lower on the Toronto Stock Exchange slipping C$0.95 to $27.35. Placer Dome Inc. dropped $0.55 to C$17.90 and Euro-Nevada gave up 35 cents at $21.75. Investors will also be watching closely tomorrow's testimony by U.S. Federal Reserve chairman Alan Greenspan on interest rates, traders said. "Nobody wants to make a big bet on the market" until hearing Greenspan's latest view on the pace of economic growth in the U.S., said Martin Roberge, technical analyst at L‚vesque Beaubien Geoffrion Inc. Strachan said the volatility in the markets can be expected for some time as investors look for direction. "We just keep going back and forth, back and forth. We're definitely in a trading range until something concrete comes forward," Strachan said. Meantime, the TSE oil and gas composite index dropped 1.2% or 74.93 to 6144.56 - as crude oil prices retreated. Among the sub-components, the integrated oils fell 1.3% or 111.83 to 8611.04. The oil and gas producers index also fell 1.3% or 5380.28 and the oil and gas services was down 0.3% or 8.25 to 2598.2 Pinnacle Resources, Tarragon Oil & Gas, Renaissance Energy, Ulster Petroleum, Abacan Resources, Ranger Oil and Poco Petroleums were among the top 50 most active on the TSE. Among service firms, Canadian Fracmaster was also listed among the top fifty most active. Canadian Occidental Petroleum fell $0.55 to $29.70, Suncor Energy $0.55 to $52.00, Anderson Exploration $0.50 to $16.50, Seven Seas Petroleum (U) $0.50 to $22.50, Talisman Energy Inc. $0.50 at $40.00 and Petro-Canada $0.45 to $23.90. Among service companies, American Eco fell $0.60 to $10.40 and Computalog $0.55 to $19.00. There were no oil producers listed among the top 50 net gainers on the TSE. However, companies which reversed the downward treand in the service sector included Shaw Industries up $0.80 to $17.40, Dreco Energy $0.45 to $51.10 and Akita Drilling $0.40 to $10.80. The base metals sector gave up 1.1%, with Alcan Aluminium Ltd. (AL/TSE) falling 50› to $41.75, and Noranda Inc. (NOR/TSE) closing down 40› at 24.85. The paper and forest products and pipelines groups also lost ground. Bucking the negative trend were the consumer products, transportation and utility groups. Among the transport stocks, CN Rail jumped $1.90 to $84.10, Air Canada added 40 cents to $13.35 and Laidlaw Inc. closed at $18.75, up 15 cents. Among industrials, Nortel gained $2.20 to $94.70; Stratford Software Corp. lost $2.00 to $55.00. Among mines, Dia Met Class B rose 45 cents to $23.20. In other Canadian markets, the Montreal Exchange portfolio index fell 14.97 points, or 0.4%, to 3860.66. And the Vancouver Stock Exchange dropped 4.31 points or 0.8% to 573.81. The combined value index of the Alberta Stock Exchange fell 13.63 to 2220.19. 139 issues advanced, 154 declined and 144 issues were unchanged. Prices were lower in light trading on the Canadian bond market Tuesday. The two-year bonds were $0.02 lower at $99.74. Ten-year bonds were $0.15 lower at $113.45. Long-term bonds were $0.15 lower at $132.50. The Government of Canada bond carrying an eight per cent coupon and maturing in 2023 a barometer of long-term borrowing costs, was yielding 5.57 per cent. Day-to-day money was available at 4.70 per cent. U.S. markets closed mixed despite a record-breaking performance by the transportation sector. On Wall Street, a terrific session for transportation stocks overshadowed a modest performance by most blue-chip names, and put an appealing gloss on an otherwise unremarkable trading session. Airline stocks logged steep gains in the session. US Airways Group Inc. (U/NYSE) shot up US$5 3/16 to US$75 1/8. AMR Corp. (AMR/NYSE), parent of American Airlines Inc., jumped US$6 to US$162. Delta Air Lines Inc. (DAL/NYSE) soared US$4 13/16 to US$125 1/2. Investor attention was drawn to the group by a conference on airline stocks organized by Merrill Lynch & Co., at which industry analysts raved about the strong traffic data airlines posted for May. The Dow Jones transportation average logged a record point gain, rising 104.33 points to finish at 3461.71. The gain topped the previous best, the 100.26-point advance set last Dec. 30. But on a percentage basis, yesterday's 3.11% rise was only the third-best ever. Away from the transports, there was little to cheer. A handful of blue-chip stocks, among them some recent gainers, edged lower yesterday, as major market averages remained locked in the tight trading ranges they occupied in recent sessions. Tech stocks were paced by the resurgent Internet sector, where several stocks posted impressive gains. Outside of technology, drug makers and transportation stocks were strong performers, the latter benefiting from weakness in the oil sector. Banking stocks joined the oil names as the big drag on major market indexes. With many hi-tech industry bellwethers on the rise, the Morgan Stanley High Tech Index (MSH) climbed 9.44 to 560.74 and the Nasdaq 100 Index (NDX) rose 16.46 to 1,223.48. Some big gainers on the day included Dell Computer (DELL), up 1 13/16 to 85 1/2 while Compaq Computer (CPQ) rose 13/16 to 29 1/2. The world's largest PC maker also had a hand in helping other stocks rise on the day. SyQuest Technology (SYQT) rose 5/16 to 1 11/16 in much higher than normal volume after the maker of computer hard drives said it signed a three-year agreement with Compaq to incorporate its SparQ removable cartridge hard drive into Compaq's new configure-to-order program. Meanwhile, Iomega (IOM) said its Zip drives will be included as standard features in the majority of new Compaq Presario PCs. Iomega shares fell 7/16 to 6 9/16, however. Yahoo! (YHOO) gained 8 1/2 to 117 7/8 on news it has signed a distribution agreement with Compaq to make "My Yahoo!" the default start page for the Internet services offered by Compaq's new Internet PC. Yahoo! paced the AMEX Internet Index (IIX), which rose 8.45 to 336.90. Lycos (LCOS) jumped 3 5/16 to 53 9/16 as the company was issued a patent for its "spider" Internet-search technology. America Online (AOL) climbed 3 3/4 to 88 9/16 after J.P. Morgan initiated coverage of the company with a "buy" rating. Cnet Inc. (CNWK) jumped 12 1/8 to 45 1/8 as General Electric's (GE) NBC unit said it agreed to buy a 5% stake in the company and a minority stake in its Snap! online service. Netscape Communications (NSCP) rose 1 3/8 to 24 3/16 on news that president and CEO James Barksdale purchased 300,000 shares of the company's stock on June 1. Among other active issues American Express (AXP), which paced the Dow's gain Monday, led the index lower, falling 2 1/16 to 107 3/8, while J.P. Morgan (JPM) shed 15/16 to 122 3/4. The Philadelphia KBW Banking Index (BKX) fell 5.12 to 852.06 in the wake of a troubling reaction to yesterday's $34 billion merger agreement between Wells Fargo (WFC) and Norwest (NOB). Wells Fargo shares tumbled 12 3/4 to 353 and Norwest lost 7/8 to 35 15/16. Also weighing on the banking index was Chase Manhattan Bank (CMB), which slid 1 3/4 to 141 9/16. Other names weighing on the Dow included McDonald's (MCD), down 1 1/4 to 66, 3M (MMM), off 1 5/16 to 92 7/8, and DuPont (DD), down 1 5/8 to 78 3/16. Exxon (XON) fell 1 5/16 to 69 7/8 and Chevron (CHV) dipped 1 to 80 as oil producers suffered. The AMEX Oil Index (XOI) shed 6.32 to 470.96 while the Philadelphia Oil Service Index (OSX) lost 2.21 to 97.96. Among other names in the oil patch, St. Maryland Exploration (MARY) tumbled 3 1/16 to 23 1/16; Smith International (SII) fell 1 3/4 to 43 1/2; and Kerr-McGee (KMG) lost 1 5/16 to 59 13/16. Pfizer Inc. (PFE) rose 4 to 112 7/16 after the U.S. Food and Drug Administration said Viagra wasn't found to be the direct cause of death in any of the 16 deaths reported in patients using the impotency drug. Pfizer led the AMEX Pharmaceutical Index (DRG) up 7.95 points to 651.20. Dow member Johnson & Johnson (JNJ) further aided the sector, rising 1 3/16 to 72 1/16. Pre-announcement season is here and several stocks were hit by profit warnings. Polaroid Corp. (PRD) fell 5/16 to 39 1/16 after warning that its second-quarter earnings will not meet expectations. Other names hit by separate profit warnings included: Arrow International (ARRO), which fell 4 3/4 to 30 5/16; Stein Mart Inc. (SMRT), down 3 3/16 to 11 13/16; Billing Concepts (BILL) off 2 15/16 to 15 1/16; Bridgestreet Accommodations (BEDS), which sank 4 to 5 1/4; and CyberOptics (CYBE), down 2 5/8 to 13 3/8. Chromatics Color Sciences International (CCSI) fell 2 5/16 to 6 1/2 after Asenio & Co., which specializes in short-selling stocks, suggested the company has exaggerated the size of the market for its products, which test infants for jaundice. Telebras (TBR) fell 2 1/16 to 115 5/8 after Brazil delayed until tomorrow the disclosure of the minimum sale price for the phone company. Tommy Hilfiger (TOM) fell 3 5/8 to 60 5/16 after saying its order backlog at the end of the fiscal fourth quarter was less than expected. SangStat Medical (SANG) gained 2 13/16 to 28 1/4 upon obtaining a "buy" rating in new coverage at Salomon Smith Barney. ESC Medical Systems (ESCMF) jumped 1 13/16 to 33 1/4 after being added to the "recommend list" at Goldman, Sachs. HBO & Co. (HBOC) rose 2 5/16 to 62 1/16 after Bear Stearns reiterated a "buy'' rating on the company. Clorox (CLX) rose 2 7/16 to 86 3/4 thanks to a new "buy" rating from Brown Brothers Harriman. McKesson Corp. (MCK) rose 2 to 80 3/4 on word it has extended for five years its existing contract with Omnicare (OCR), which closed off fractionally. Metamor Worldwide (MMWW) rose 1 5/16 to 33 after agreeing to sell its Corestaff unit to British Corporate Services Group for $250 million. Simula (SMU) rose 2 5/8 to 16 7/8 after TRW (TRW) said it will use Simula's product for its side-impact safety systems. Tootsie Roll Industries (TR) closed up 2 3/16 to 79 15/16 after the candy maker rolled out a 2-for-1 stock split. The Dow Jones Industrial Average ($INDUA) stayed in a tight range in negative territory throughout the session, but closed well off its worst levels of the day. The blue-chip proxy fell to as low as 9,014.54 before closing off 19.68 at 9,049.92. Conversely, the Dow transports ($TRAN) soared 104.33 to 3,461.71 as weakness in the oil patch sent airline stocks skyward. The Nasdaq Composite Index (COMP) rose as high as 1,801.04 before closing up 12.99 to 1,800.76. The S&P 500 gained 2.70 to 1,118.42 while the Russell 2000 Index rose a fraction of a point to 456.74. In NYSE trading, 564 million shares changed hands while advancing issues trailed declining issues by a 4-to-3 margin. In Nasdaq activity, 725 million shares were exchanged while the breadth of the market favored declining stocks by an 11-to-10 spread. Bond prices remained in a tight range ahead of Greenspan's speech tomorrow. Bond prices rose fractionally while the yield on the benchmark 30-year Treasury bond was unchanged at 5.78%. Among the Dow blue-chip losers were American Express Inc. (AXP/NYSE),down US$2 1/16 to US$107 3/8, and J.P. Morgan & Co. (JPM/NYSE), off 15/16 at US$122 3/4, after each moved higher Monday. "When a sector moves up to a certain level, investors start to sell into the strength," said James Herrick, managing director of trading at Robert W. Baird. "That's why this market is stuck in the trading range it's in. "It's a very noncommittal market," he said. That is reflected in the technical performance. Volume levels remain modest, and even though yesterday's volume of 560.5 million shares beat out Monday's 533.6-million share total on the NYSE, the days where volume levels topped 600 million shares a day have become the exception, not the rule, as it was earlier this year. International Stocks U.S. rate fears keep European markets on edge European stocks fell yesterday amid concern U.S. Federal Reserve Chairman Alan Greenspan may hint at raising interest rates. Greenspan will address the joint economic committee of Congress today. While he may hint at raising rates, some investors expect that with Japan about to confirm it is in recession, other Asian economies teetering on the edge and U.S. inflation at its lowest in a generation, an increase will be difficult to justify. London: British shares drifted lower, undercut by a weak Wall Street. The FTSE 100 index closed at 6019.8, down 18 points, or 0.3%. Merger speculation buoyed the likes of insurers Commercial Union and Legal & General and drugs company Glaxo Wellcome PLC. CGU rose 41 pence to 1,168p, Legal & General rose 10p to 708p and Glaxo rose 49p to 1,763p. Frankfurt: The Dax index closed at 5760.03, down 19.06 points, or 0.3%. In later screen-based trade the Xetra Dax ended at 5773.77, down 13.28 points or 0.2%. BMW AG and rival Volkswagen AG reversed course in the wake of Vickers PLC's shareholders backing VW's bid for Rolls-Royce Motor Cars Ltd. VW edged ahead 9 marks to 1,525 marks, while BMW sank 70.4 marks to 1,960.6 marks. Tokyo: Japanese shares advanced as the yen's fall against the US$ (before its rise in New York) prompted investors to pick up shares in export-driven manufacturers. The 225-share Nikkei average closed up 235.46, or 1.5%, to 15,530.17. Hong Kong: Investors dumped China-related shares on fears a weak yen would trigger a devaluation of the Chinese yuan. The Hang Seng index closed at 8391.46, down 195.17 points or 2.3%. Sydney: Shares ended lower on fears rates may be hiked to defend the ailing A$. The all ordinaries index closed at 2623.9, down 18.9 points, or 0.7%. continued