oil and gas

CIMAREX ENERGY $110.58 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 87.6 million; Market cap: $9.7 billion; Yield: 0.6%) plans to spend $900 million to $1.1 billion on exploration and development in 2015, down sharply from $1.9 billion in 2014. The company has cut back its spending plans in response to lower oil and gas prices. It aims to fund its 2015 spending from cash flow and the $406 million of cash it holds. That way it can avoid taking on debt, even though its long-term debt of $1.5 billion is a low 15.5% of its market cap. Even with the lower spending, Cimarex expects its production to rise between 3% and 8% over 2014 levels this year. If oil and gas prices rise later in 2015, it has the flexibility to increase its spending, which would also boost its production and cash flow....

SASOL LTD. (ADR) $33.44 (New York symbol SSL; TSINetwork Rating: Extra Risk) (082- 883-9697; www.sasol.com; ADRs outstanding: 650.9 million; Market cap: $21.6 billion; Dividend yield: 3.4%) is a South Africa-based company that converts coal and natural gas into motor fuels, produces oil and gas and mines coal. In its fiscal 2015 first half, which ended December 31, 2014, Sasol’s sales rose 1.6%, to 99.8 billion South African rand from 98.2 billion rand a year earlier (1 rand = $0.1099 U.S.). Earnings per ADR gained 6.0%, to 32.00 rand from 30.19. The U.S. dollar rose against the rand, increasing the value of Sasol’s foreign sales. That offset a 19% decline in realized oil prices. Despite the improved results, Sasol now plans to bring in an aggressive plan to conserve cash, including layoffs, lower spending on oil and gas exploration and development, and a 12.5% dividend cut. The ADRs yield 3.4%, based on the lower rate....

RUSSEL METALS $24.16 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905- 819-7777; www.russelmetals.com; Shares outstanding: 61.7 million; Market cap: $1.5 billion; Dividend yield: 6.3%) reported stronger results in the latest quarter. In the three months ended December 31, 2014, Russel’s revenue rose 24.9%, to $1.01 billion from $811.1 million a year earlier. Earnings gained 36.4%, to $31.1 million, or $0.50 a share. A year earlier, the company earned $22.8 million, or $0.37. Russel has invested in new plants and processing equipment in the past three years, which has cut its costs and improved its efficiency. That’s paying off with higher profit margins....

WAJAX CORP. $24.10 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.8 million; Market cap: $404.4 million; Dividend yield: 4.2%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as 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, 2014, Wajax’s revenue fell 1.4%, to $386.1 million from $391.7 million a year earlier. The decline was mostly due to lower sales to mining companies and oil and gas customers....

SNC-LAVALIN GROUP INC. $38 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.5 million; Market cap: $5.8 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.6%; TSINetwork Rating: Average; www.snclavalin.com) earned $106.7 million in the fourth quarter of 2014, up 0.6% from $106.1 million a year earlier. Earnings per share were unchanged at $0.70. These figures exclude a gain on the sale of AltaLink, which operates power lines in Alberta.

Revenue jumped 32.7%, to $2.8 billion from $2.1 billion, due to the recent acquisition of U.K.-based Kentz, which provides engineering and construction services to the oil and gas industry.

The stock has suffered lately, mainly due to formal charges against the company for using bribes to win construction contracts in Libya between 2001 and 2011. These are the same allegations that prompted SNC to replace its senior executives in 2012 and bring in a new program to enforce ethical practices.

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TORONTO-DOMINION BANK $54 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $97.2 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.td.com) gets 65% of its revenue and earnings from its Canadian retail banking division, which serves 15 million customers through 1,164 branches.

In the U.S., the bank operates 1,301 branches along the east coast from Maine to Florida. This business supplies 25% of its revenue and earnings. The remaining 10% comes from TD’s wholesale banking division, which offers securities trading and investmentbanking services, such as stock underwriting.

TD’s revenue jumped 53.1%, from $19.6 billion in 2010 to $30.0 billion in 2014 (fiscal years end October 31).

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SCITI Trust, $9.13, symbol SIN.UN on Toronto (Units outstanding: 30.3 million; Market cap: $276.6 million; www.scotiamanagedcompanies.com), first issued units at $10 and began trading on Toronto in April 2003. The trust was scheduled to wind up on April 29, 2008, but unitholders voted to keep it going for another five years in March 2008 and again in March 2013. It’s now scheduled to wind up on April 30, 2018, though it could be extended again. The trust’s portfolio is based on the Scotia Capital High-Yielding Equity Index, which tracks the highest-yielding stocks (including many real estate investment trusts and former income trusts) on the Toronto exchange. SCITI Trust now holds the top 50 highest-yielding issues in the index, on a roughly equal-weight basis....

ENERPLUS CORP. $13.06 (Toronto symbol ERF; Shares outstanding: 205.4 million; Market cap: $2.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.6%) produces an average of 105,591 barrels of oil equivalent a day (56% gas and 44% oil). The company’s properties are mainly in Alberta, Saskatchewan, B.C., North Dakota and Montana, as well as the Marcellus shale, which passes through Pennsylvania, New York, Ohio and West Virginia. In the quarter ended December 31, 2014, Enerplus’s production rose 12.1% from a year earlier. That increase, plus higher realized gas prices, pushed cash flow per share up 15.7%, to $1.03 from $0.89. Like ARC, Enerplus will cut spending this year. Its outlays will now total $480 million, down 24.4% from its original estimate of $635 million and 40.8% from $811.0 million in 2014....

ARC RESOURCES $24.16 (Toronto symbol ARX; Shares outstanding: 335.0 million; Market cap: $8.2 billion; TSINetwork Rating: Speculative; Dividend yield: 5.1%; www.arcresources.com) produces oil and natural gas in Western Canada. Its average daily output of 117,986 barrels of oil equivalent is 61% gas and 39% oil. In the quarter ended December 31, 2014, ARC’s cash flow per share rose 3.9%, to $0.79 from $0.76 a year earlier. Realized oil prices fell 12.5%, to $72.49 a barrel from $82.85, but ARC’s production gained 17.0%, and its realized gas prices rose 15.0%. Like many oil and gas producers, ARC plans to cut back on exploration and development spending. This year, the company will devote $750.0 million to this purpose, down from $945.5 million in 2014....

SASOL LTD. (ADR), $32.04, symbol SSL on New York, has developed a technology to convert coal and natural gas into motor fuels. The company is the world’s largest producer of fuel from coal at its Secunda, South Africa, facility. It also makes synthetic fuels from natural gas at plants in Qatar and Nigeria. As well, Sasol produces chemicals, oil and gas in Africa. It’s also South Africa’s third-largest coal producer. In its fiscal 2015 first half, which ended December 31, 2014, Sasol’s revenue rose 1.6%, to 99.8 billion South African rand (1 rand = $0.1099 U.S.) from 98.2 billion rand a year earlier. Earnings per ADR gained 6.0%, to 32.00 rand from 30.19 rand. The U.S. dollar rose against the rand, increasing the value of Sasol’s sales outside South Africa. That offset a 19% decline in realized oil prices....