encana
Toronto symbol ECA, and New York symbol ECA, is a leading North American producer of natural gas and oil.
VERESEN $11.60 (Toronto symbol VSN; Shares outstanding: 292.0 million; Market cap: $3.2 billion; TSINetwork Rating: Average; Dividend yield: 8.6%; www.vereseninc.com) and KKR & Co. LP (symbol KKR on New York) formed a joint venture in late 2014 called Veresen Midstream.
The partners then bought natural gas gathering and compression assets in northeastern B.C. from Encana and Japan’s Mitsubishi Corp. for $1 billion.
As well, Veresen Midstream agreed to undertake a $5-billion expansion for gas producers, including Encana. This development would be backed by 30-year contracts that would significantly cut Veresen Midstream’s risk.
...
The partners then bought natural gas gathering and compression assets in northeastern B.C. from Encana and Japan’s Mitsubishi Corp. for $1 billion.
As well, Veresen Midstream agreed to undertake a $5-billion expansion for gas producers, including Encana. This development would be backed by 30-year contracts that would significantly cut Veresen Midstream’s risk.
...
Multi-well pad drilling (or “octopus” drilling) is now common practice among major oil firms and is actively used by a number of companies we recommend, including Encana, Devon Energy, Cimarex, Pengrowth and Imperial Oil.
Traditionally, a company has needed a pad or land site for each well it drilled. However, multi-pad drilling lets producers drill as many as 50 wells from a single pad.
Here’s how the technology works: producers set up a well pad and then install a multi-well rig. The drill from that rig then literally “crawls” on hydraulic tentacles to numerous drill locations within its range. When drilling at each location is completed, it takes just two hours for the rig to move to a new location. With traditional horizontal drilling methods, it takes about five days to move from pad to pad and start drilling a new well.
The practice of placing several wells on one pad has many benefits:
Traditionally, a company has needed a pad or land site for each well it drilled. However, multi-pad drilling lets producers drill as many as 50 wells from a single pad.
Here’s how the technology works: producers set up a well pad and then install a multi-well rig. The drill from that rig then literally “crawls” on hydraulic tentacles to numerous drill locations within its range. When drilling at each location is completed, it takes just two hours for the rig to move to a new location. With traditional horizontal drilling methods, it takes about five days to move from pad to pad and start drilling a new well.
The practice of placing several wells on one pad has many benefits:
- It reduces the impact of drilling multiple wells, which is especially important in populated areas.
...
Adding high-quality resource stocks to your portfolio can provide you with a valuable hedge against inflation and provide other hidden benefits
SUNCOR ENERGY INC., $36.67, Toronto symbol SU, has launched a hostile all-stock takeover offer for Canadian Oil Sands (Toronto symbol COS). Canadian Oil Sands’ main asset is its 36.74% stake in the massive Syncrude oil sands development near Fort McMurray, Alberta. It also operates the project. Suncor already owns 12.0% of Syncrude, so buying Canadian Oil Sands would give it effective control, with a 48.74% stake. Equipment failures and other problems have hurt Syncrude’s production in the past few years, and Suncor feels its expertise running similar projects will help Syncrude improve its efficiency and profits....
VERESEN $11.60 (Toronto symbol VSN; Shares outstanding: 292.0 million; Market cap: $3.2 billion; TSINetwork Rating: Average; Dividend yield: 8.6%; www.vereseninc.com) and KKR & Co. LP (symbol KKR on New York) formed a joint venture in late 2014 called Veresen Midstream. The partners then bought natural gas gathering and compression assets in northeastern B.C. from Encana and Japan’s Mitsubishi Corp. for $1 billion. As well, Veresen Midstream agreed to undertake a $5-billion expansion for gas producers, including Encana. This development would be backed by 30-year contracts that would significantly cut Veresen Midstream’s risk....
ENCANA $11.04 (Toronto symbol ECA; Shares outstanding: 842.5 million; Market cap: $8.9 billion; TSINetwork Rating: Average; Dividend yield: 3.3%; www.encana.com) continues to increase production at its four main properties: Montney (B.C.), Duvernay (Alberta) and Eagle Ford and Permian (both in Texas). These fields produce large amounts of oil and natural gas liquids, such as propane and butane, making Encana less reliant on natural gas. In August 2015, these four properties produced an average of 257,000 barrels of oil equivalent a day (including gas), up 15.2% from 223,000 barrels in the second quarter of 2015. Encana expects these fields’ output to rise to 270,000 barrels a day in the fourth quarter of 2015....
ENCANA CORP. $9.24 (www.encana.com) is selling its Haynesville natural gas properties in northern Louisiana. These assets account for 9% of the company’s production but less than 3% of its cash flow. Selling them will let Encana focus on its more profitable properties (two in Canada and two in the U.S.), which produce large amounts of oil and natural gas liquids, such as propane and butane....
BOMBARDIER INC., Toronto symbols BBD.A $1.89 and BBD.B $1.86, jumped 42% this week in response to media reports that a Chinese company has offered to buy a majority stake in its passenger-railcar business, Bombardier Transportation. The reported price of $7 billion U.S. to $8 billion U.S. is roughly 2.4 times Bombardier’s $4.2-billion (Canadian) market cap (or the value of all of its outstanding shares). The company has denied that it plans to sell the railcar business. However, it still intends to sell shares in Bombardier Transportation through an initial public offering later this year—though it will continue to own a majority stake....
CAE INC. $14 (www.cae.com) has won several contracts for flightsimulators and related equipment from airlines in China, SouthKorea, Russia and the U.S. In all, these deals are worth $130million, or 6% of the company’s $2.2 billion of annual revenue. CAEhas now sold 15 flight simulators in its 2016 fiscal year, whichbegan April 1, 2015, after selling 41 in fiscal 2015. The stock is our#1 buy for 2015. BCE INC. $54 (www.bce.ca) recently started offering tri-band LTEadvanced (LTE-A) service, which is 1.9 times faster than its mainLTE network, in Halifax, Hamilton, Oakville and Toronto. Fasterwireless service should prompt more of its subscribers to upgradeto smartphones, which generate higher profits than regularcellphones. Best Buy. ENCANA CORP. $9.24 (www.encana.com) is selling its Haynesvillenatural gas properties in northern Louisiana. These assetsaccount for 9% of the company’s production but less than 3% of itscash flow. Selling them will let Encana focus on its more profitableproperties (two in Canada and two in the U.S.), which producelarge amounts of oil and natural gas liquids, such as propane andbutane. That cuts the company’s reliance on natural gas. Buy.
MANITOBA TELECOM $28.74 (Toronto symbol MBT; Shares outstanding: 78.9 million; Market cap: $2.3 billion; TSINetwork Rating: Average; Dividend yield: 4.5%; www.mts.ca) has acquired AWS-1 radio frequencies (or spectrum) in Manitoba from rival wireless carrier WIND Mobile. The $45-million purchase will boost the speed and capacity of the company’s wireless networks. Manitoba Telecom is a hold....