oil and gas

TRILOGY ENERGY CORP. $20.22 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290-2900; www.trilogyenergy.com; Shares outstanding: 105.1 million; Market cap: $2.8 billion; Dividend yield: 2.1%) reported production of 36,187 barrels of oil equivalent a day (including gas) in the quarter ended June 30, 2014. That’s down 2.7% from 37,209 barrels a year earlier. Cash flow per share rose 9.6%, to $0.80 from $0.73, as higher oil and gas prices offset the production drop.

The company plans to spend $375 million on exploration this year, down 5.5% from the $397 million it spent in 2013. As well, it’s now focusing on its shale oil prospects at Kaybob, Alberta and spending less on its more mature oil pools in the same area.

That shift could push Trilogy’s average daily output to over 42,000 barrels late next year, but it will continue to weigh on the company’s production growth in the meantime.

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CIMAREX ENERGY $106.95 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 87.0 million; Market cap: $9.0 billion; Dividend yield: 0.6%) produces and explores for natural gas and oil. Gas makes up 48% of the company’s output.

Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, and the Cana-Woodford shale area in western Oklahoma.

In the three months ended June 30, 2014, the company’s production averaged 838.7 million cubic feet of natural gas equivalent per day (including oil). That’s up 22.1% from 686.8 million cubic feet a year earlier.

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DEVON ENERGY CORP. $55.14 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 409.1 million; Market cap: $22.6 billion; Dividend yield: 1.7%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 48% gas and 52% oil.

In 2011, Devon sold all of its international and Gulf of Mexico properties, which it saw as risky and expensive to develop.

The company narrowed its focus even further with the July 2014 sale of some of its properties to Linn Energy for $2.3 billion. The sale included Devon’s holdings in the Rockies, the onshore Gulf Coast and the Mid-Continent region (which includes Oklahoma, Kansas and Texas).

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MCCOY GLOBAL $5.00 (Toronto symbol MCB; TSINetwork Rating: Speculative) (780- 453-8451; www.mccoyglobal.com; Shares outstanding: 27.7 million; Market cap: $142.7 million; Dividend yield: 4.0%) has now sold its Inotec Coatings and Hydraulics business for $9.3 million. Inotec makes coatings for oil and gas drilling tools and mining equipment. It also repairs and maintains hydraulic cylinders.

This deal follows McCoy’s sale of its mobile solutions unit earlier this year and completes the company’s shift toward its faster growing and more profitable energy products and services segment.

This business sells hydraulic gear, including power tongs, for drilling rigs. (Power tongs are large wrench-like tools that tighten and loosen the pipe in the drill hole.)

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KKR & Co. L.P. (formerly Kohlberg Kravis Roberts & Co. L.P.), $22.37, symbol KKR on New York (Shares outstanding: 415.5 million; Market cap: $17.9 billion; www.kkr.com), is an asset manager with 14 offices across North America, Europe, the Middle East, Asia and Australia. The company serves three main markets: private (investment funds); public (leveraged loans, high-yield bonds, special situation assets, distressed assets, and rescue, debtor-in-possession and exit financings); and capital (debt/equity financing). KKR had $98.0 billion of assets under administration on June 30, 2014, down from $102.3 billion three months earlier. However, that was because the company took advantage of strong financial markets to sell some of its investments at a profit. These moves included the sale of Oriental Brewery Co. to Anheuser-Busch InBev and helicopter-services firm Avincis to Babcock International Group....

STANTEC INC., $72.20, symbol STN on Toronto, is buying Montreal-based Dessau, a distressed firm that’s one of a number of companies caught up in a Quebec government inquiry into corruption in the construction industry. The purchase will add 1,300 employees at 20 offices throughout Quebec. Stantec didn’t say how much it’s paying, but the move will add about $130 million to its annual revenue. To put that in perspective, Stantec reported $530.3 million of revenue in the latest quarter. The corruption inquiry is investigating Dessau in connection with illegal financing of political parties. However, under the terms of the deal, Stantec won’t be responsible for any of the millions of dollars in fines or penalties that Dessau may have to pay....

TIM HORTONS INC., $88.38, Toronto symbol THI, still plans to merge with Miami-based Burger King Worldwide (New York symbol BKW), even though the U.S. government is now clamping down on “tax inversion” deals like this one. The combined firm will be based in Oakville, Ontario, which will let it take advantage of Canada’s 15% corporate tax rate, compared to 35% in the U.S. Under the new rules, it’s now more difficult for the foreign parent firm to shift funds between subsidiaries....

FINNING INTERNATIONAL INC. $33 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.2 million; Market cap: $5.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT). It also sells heavy equipment made by other firms.

Finning’s clients are mainly in the mining, forest products and construction industries.

In the three months ended June 30, 2014, the company’s overall revenue rose 9.1%, to $1.8 billion from $1.6 billion a year earlier.

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Altus Group, $20.20, symbol AIF on Toronto (Shares outstanding: 29.1 million; Market cap: $587.8 million; www.altusgroup.com), provides consulting services and software for the commercial real estate industry. The company has five divisions: ARGUS Software; Research, Valuation and Advisory; Property Tax Consulting; Cost Consulting and Project Management; and Geomatics. ARGUS, a leading provider of real estate valuation software, is a recent acquisition. Altus has about 2,200 employees around the world, including in Canada, the U.S., the U.K., Australia and the Asia-Pacific region. Clients include financial institutions, private and public investment funds, insurance companies, accounting firms, real estate investment trusts, health care organizations, private investors, oil and gas companies and real estate developers....

ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $44.50 (New York Exchange symbol ECH; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that mainly trade on the Santiago Stock Exchange.

The fund’s top holdings are S.A.C.I. Falabella (retail), 9.6%; Enersis SA (electricity), 9.2%; Empresas Copec SA (conglomerate), 7.9%; Empresa Nacional de Electricidad (electricity), 6.7%; LATAM Airlines, 5.5%; Cencosud SA (retailer), 4.9%; Empresas CMPC (pulp and paper), 4.8%; Banco de Chile, 4.6%; Banco Santander Chile (banking), 4.5%; and Quimica y Minera de Chile (mining), 4.1%.

The fund’s industry breakdown is: Utilities, 25.1%; Financials, 17.8%; Consumer Discretionary, 13.2%; Materials, 12.9%; Consumer Staples, 10.0%; Industrials, 8.1%; Energy, 7.8%; Telecommunications, 2.4%; and Information Technology, 1.9%.

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