oil and gas

SUNCOR ENERGY INC., $35.86, Toronto symbol SU, has completed its all-stock takeover of Canadian Oil Sands (Toronto symbol COS). Under the deal, Canadian Oil Sands investors received 0.28 of a Suncor share for each share they held. As a result, the Toronto Stock Exchange delisted Canadian Oil Sands’ shares on March 23, 2016. Based on Suncor’s share price just before the deal closed, it paid $4.8 billion for Canadian Oil Sands. If you include Canadian Oil Sands’ debt of $2.4 billion, the total price was $7.2 billion. To put that in context, Suncor’s market cap (the value of all outstanding shares) is $55.6 billion....

APACHE CORP. $50 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 378.3 million; Market cap: $18.9 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.apachecorp.com) continues to sell overseas properties to focus on its less-risky onshore oil and gas operations here in North America. As a result, its production in 2015 fell 9.9%, to 486,775 barrels a day from 540,212 in 2014. Due to lower oil and gas prices, it lost $130 million, or $0.34 a share, in 2015 compared to a profit of $2.0 billion, or $5.21. The company plans to spend $1.4 billion to $1.8 billion on capital projects in 2016, down from $4.7 billion in 2015. That should let it continue to pay quarterly dividends of $0.25 a share, for an annualized yield of 2.0%. In 2015, dividend payments totaled $377 million....

APACHE CORP. $50 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 378.3 million; Market cap: $18.9 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.apachecorp.com) continues to sell overseas properties to focus on its less-risky onshore oil and gas operations here in North America. As a result, its production in 2015 fell 9.9%, to 486,775 barrels a day from 540,212 in 2014. Due to lower oil and gas prices, it lost $130 million, or $0.34 a share, in 2015 compared to a profit of $2.0 billion, or $5.21. The company plans to spend $1.4 billion to $1.8 billion on capital projects in 2016, down from $4.7 billion in 2015. That should let it continue to pay quarterly dividends of $0.25 a share, for an annualized yield of 2.0%. In 2015, dividend payments totaled $377 million....

Atwood Oceanics, $9.41, symbol ATW on New York (Shares outstanding: 64.8 million; Market cap: $631.5 million; www.atwd.com), currently has 11 deepwater oil-drilling rigs, and is constructing two ultra-deepwater rigs. Atwood operates mostly in foreign waters, with rigs working off the coast of West Africa, Australia and elsewhere. Atwood’s revenue has grown steadily over the last five years, along with oil and gas prices. It has climbed from $645.1 million in fiscal 2011 (years ended September 30) to $1.4 billion in 2015. Profits rose as well, from $271.7 million, or $4.20 a share, to $432.6 million, or $6.70 a share. In its fiscal 2016 first quarter ended December 31, 2015, Atwood’s revenue and earnings fell. Revenue declined 12.5%, to $307.8 million from $351.7 million a year earlier. The company earned $39.1 million, or $0.60 a share, in the latest quarter. That’s down 15.4% from $46.2 million, or $0.72 a share....

TRANSCANADA CORP., $49.08, Toronto symbol TRP, has agreed to buy Texas-based Columbia Pipeline Group (New York symbol GPCX) for $13 billion U.S. That figure includes $2.8 billion U.S. of Columbia’s debt. This is a big purchase for TransCanada, which has a market cap of $35.4 billion (Canadian). Columbia operates natural gas pipelines in the U.S. Northeast, Midwest, Mid-Atlantic and Gulf Coast regions, as well as underground gas storage terminals. It’s now working on $5.6 billion U.S. worth of new pipelines. Columbia has already secured contracts from gas shippers, which cuts the risk of these projects....

STUART OLSON INC. $6.15 (Toronto symbol SOX; TSINetwork Rating: Speculative) (780-454-3667; www.stuartolson.com; Shares outstanding: 26.4 million; Market cap: $159.6 million; Dividend yield: 7.8%) mainly operates in Western Canada, with both government and private sector clients. Its services include building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation. In the three months ended December 31, 2015, the company’s revenue fell 22.6%, to $283.1 million from $364.5 million a year earlier. The decline came from lower activity in the Alberta oil sands and across the province. The company is also phasing out less profitable industrial projects. Before one-time items, Stuart Olson earned $2.1 million, or $0.08 a share. That’s up sharply from $1.2 million, or $0.05, a year earlier. The growth reflects the company’s focus on higher-profit activities. It ended the quarter with a backlog of $1.96 billion, down 1.3% from $1.99 billion....

EXTENDICARE INC. $9.57 (Toronto symbol EXE; TSINetwork Rating: Extra Risk) (905-470-5534; www.extendicare.com; Shares outstanding: 88.0 million; Market cap: $825.7 million; Dividend yield: 5.0%) owns 62 long- and short-term senior-care facilities that can house 8,464 residents. It manages another 54 residences that are home to 6,426 seniors. Extendicare also operates 47 ParaMed Home Health Care branches in six provinces. ParaMed’s 10,900 staff members provide nursing care and other forms of assistance to clients who live in their homes. In late 2014, the company sold its 156 U.S. facilities for $231.1 million U.S. Extendicare has now deployed the cash from the sale....

DEVON ENERGY $26.22 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235-3611; www.dvn.com; Shares outstanding: 510.3 million; Market cap: $12.5 billion; Dividend yield: 0.9%) is undertaking a number of measures to conserve cash and shore up its balance sheet while it waits for oil and gas prices to recover. The company plans to cut its workforce by 20%. This will save it up to $500 million a year when combined with other cost cutting. Devon will also reduce its quarterly dividend by 75%, to $0.06 from $0.24. The shares now yield 0.9%. The dividend cut will save it $320 million a year. Devon plans to lower its exploration and development spending this year, to between $900 million and $1.1 billion. That’s down 75% from 2015. As well, the company will sell as many as 79.4 million shares at $18.75 each to raise $1.5 billion....

CHEMTRADE LOGISTICS INCOME FUND $17.46 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics .com; Units outstanding: 69.1 million; Market cap: $1.2 billion; Dividend yield: 6.9%) reports that in the three months ended December 31, 2015, its revenue rose 7.1%, to $335.7 million from $313.3 million a year earlier. The gain mainly came from the higher U.S. dollar, which increased the contribution from the trust’s operations in that country. Overall cash flow fell 23.5%, to $38.1 million from $49.8 million. Cash flow per share fell 28.6%, to $0.55 from $0.77, on more shares outstanding. The declines came from one-time maintenance expenditures and a $10.2 million benefits plan settlement gain a year ago. Chemtrade’s high distribution looks safe; it pays monthly distributions of $0.10 a unit, for a 6.9% yield....

WAJAX CORP. $16.85 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:20.0 million; Market cap: $335.9 million; Dividend yield: 5.9%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as ball bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions). The company’s customers are in the natural resource, construction, manufacturing and transportation industries. In the three months ended December 31, 2015, Wajax’s clients in mining and oil and gas made fewer purchases. As a result, revenue fell 16.0%, to $324.4 million from $386.1 million a year earlier. Earnings, excluding one-time items, declined sharply, to $4.0 million, or $0.20 a share, from $11.0 million, or $0.66....