oil and gas

Royal Dutch Shell plc (ADR), $67.49, symbol RDS.A on New York (ADRs outstanding: 3.2 billion; Market cap: $215.1 billion; www.shell.com), owns or invests in the many companies that make up the Royal Dutch Shell Group. The Netherlands-based oil giant operates in 70 countries and is involved in all areas of the oil and gas industry. It also has interests in chemicals and other energy-related businesses. Shell appointed Ben Van Beurden as CEO at the start of this year, taking over from Peter Voser. Under Van Beurden, the company continues to exit unprofitable, risky or non-essential projects, with plans to sell $15 billion worth of assets by the end of 2015....

Cardiff Energy, $0.16, symbol CRS on Toronto (Shares outstanding: 31.0 million; Market cap: $5.0 million; www.cardiffenergy.com), is a junior oil and gas exploration firm. It first sold shares to the public and began trading in April 2012. Cardiff holds interests in 15 producing oil wells, one producing gas well and three shut-in oil wells in the Lincoln County area of central Oklahoma. It also has holdings in other parts of the state, including seven producing oil and gas wells in the Garvin County area and interests in the Buzzard Sand oil property in Osage County. So far the company has very little production: in the three months ended June 30, 2014, it generated just $45,547 in revenue from its interests in the Oklahoma wells....

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SHERRITT INTERNATIONAL (Toronto symbol S; www.sherritt.com) sold off all of its coal interests for $793 million in cash in April 2014.

The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.

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STUART OLSON INC. $7.65 (Toronto symbol SOX; TSINetwork Rating: Speculative) (780-454-3667; www.stuartolson.com; Shares outstanding: 25.0 million; Market cap: $191.3 million; Dividend yield: 6.3%) has agreed to buy Red Deer, Alberta-based Studon Electric & Controls for $76.2 million. The price could increase by up to $25.8 million over the next three years if Studon meets certain profitability targets.

Studon, which employs 500 to 1,000 electricians and instrumentation tradespeople at any given time, offers construction and maintenance services to the Western Canadian oil and gas, pipeline and petrochemical industries.

This business’s management team will keep leading its day-to-day operations, while Studon will report its results as part of Stuart Olson’s Industrial Group.

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DELPHI ENERGY $1.40 (Toronto symbol DEE; TSINetwork Rating: Speculative)(403-265-6171; www.delphienergy.ca; Shares outstanding: 155.4 million; Market cap: $217.6 million; No dividends paid) develops, produces and explores for oil and natural gas. About 67% of its output is gas. The remaining 33% is oil.

In the three months ended September 30, 2014, Delphi’s production rose 7.5%, to 9,461 barrels of oil equivalent a day from 8,797 a year earlier. Production was down 9.0% from 10,397 barrels a day in the quarter ended June 30, 2014, but that was due to processing delays caused by outside companies.

Those issues, which were resolved at the end of August, cut Delphi’s production by about 1,700 barrels a day in the latest quarter. Its output averaged 11,500 barrels a day in September and October.

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BIRCHCLIFF ENERGY $9.05 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Shares outstanding: 152.2 million; Market cap: $1.4 billion; No dividends paid) develops, produces and explores for oil and gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 84% of its output is gas. The remaining 16% is oil.

In the three months ended September 30, 2014, Birchcliff’s production rose 38.8%, to 34,235 barrels of oil equivalent a day from 24,662 a year earlier. Cash flow per share jumped 66.7%, to $0.50 from $0.30, on the increased output and higher gas prices.

Birchcliff recently completed Phase 4 of its gasplant expansion in Pouce Coupe, Alberta. That raised the facility’s capacity by 20% and will let Birchcliff bring the additional gas it is now producing to market.

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RUSSEL METALS $27.18 (Toronto symbol RUS; TSINetwork Rating: Speculative)(905-819-7777; www.russelmetals.com; Shares outstanding: 61.6 million; Market cap: $1.7 billion; Dividend yield: 5.6%) is one of North America’s largest metal distributors. It serves 39,000 clients at 53 locations in Canada and 12 in the U.S.

In the quarter ended September 30, 2014, Russel’s revenue rose 30.4%, to $1.04 billion from $796.8 million a year earlier. The company’s metal-services business raised its prices in response to higher demand, increasing its revenue by 14%. The energy products division, which supplies pipes for oil and gas drillers, saw its revenue jump 41%.

Earnings gained 74.6%, to $33.0 million, or $0.54 a share. A year earlier, the company earned $18.9 million, or $0.31. 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.

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REITMANS (CANADA) LTD., $5.94, symbol RET.A on Toronto, is shutting down its underperforming Smart Set chain. Over the next 18 months, it will close 31 locations and convert the other 76 to other banners, including Reitmans or Penningtons (plus-sizes). The closures will result in a $2.2-million charge in the current quarter. To put that in perspective, Reitmans earned $9.6 million, or $0.15 a share, in the three months ended August 2, 2014. That was down 5.9% from $10.2 million, or $0.16, a year earlier. Reitmans had tried rebranding Smart Set, which was selling lower-priced, fashionable clothing to young women, but its efforts were unsuccessful. Its plan involved shifting the stores toward women in their late 20s and early 30s, as well as raising prices....

ROYAL BANK OF CANADA, $83.16, Toronto symbol RY, plans to close its wealth management operations in the Caribbean, as the region’s slowing growth and high unemployment have hurt this business’s prospects. Royal recently sold its retail banking operations in Jamaica for the same reasons. The bank did not say how much it expects to pay in severance and other costs. However, this move will free up cash it can use to expand its faster-growing wealth management operations in Canada, the U.S., the U.K. and Asia. In the quarter ended July 31, 2014, earnings at Royal’s wealth management division rose 22.3% from a year earlier and accounted for 11.9% of its total earnings. Royal Bank is a buy....

DIEBOLD INC. $36 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.6 million; Market cap: $2.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.2%; TSINetwork Rating: Average; www. diebold.com) aims to save a total of $150 million by the end of 2015, mainly through layoffs and plant closures. In the third quarter of 2014, the company earned $33.0 million, or $0.51 a share, up from a year-earlier loss of $21.7 million, or $0.34. Without unusual items, earnings per share fell 3.6%, to $0.54 from $0.56. Sales gained 8.9%, to $768.0 million from $705.4 million. Stronger demand for automated teller machines in Europe and Asia offset slower sales in North America and Latin America. Diebold also sold more security systems....