oil and gas

BB&T Corp., $39.23, symbol BBT on New York (Shares outstanding: 718.5 million; Market cap: $28.2 billion; www.bbt.com), owns Branch Banking and Trust Company, the ninth-largest U.S. bank by deposits. It has 1,825 offices in 12 southeastern U.S. states and Washington. D.C. Aside from banking, it operates in the brokerage, asset management, mortgage and insurance businesses. The bank is starting to see higher demand for loans from buyers of income-generating real estate (up 10.6% in the 2014 first quarter from the 2013 fourth quarter) and improvement in key markets like Florida and Texas. BB&T’s focus on lending to oil and gas companies and equipment finance is also paying off with higher loan volumes. It needs a continued rise in loan demand to offset a higher cost of funds and a number of less-profitable loans it obtained through acquisitions....

Petrowest Corp., $1.35, symbol PRW on Toronto (Shares outstanding: 149.8 million; Market cap: $200.7 million; www.petrowestcorp.com), provides a range of services for the oil and gas drilling industry, as well as industrial and civil infrastructure projects. Petrowest operates five divisions: Construction, Transportation, Civil, Rentals and Environmental. The stock moved up after the company reported record results in the quarter ended March 31, 2014. Revenue rose 33.0%, to $61.1 million from $45.9 million. Petrowest earned $0.02 a share, compared to a $0.03-a-share loss a year earlier. The gains came from strong demand for the company’s services. The Civil division is benefiting from Petrowest’s large work program on Highway 63 in Alberta, which connects Edmonton to Fort McMurray. Meanwhile, the Construction segment saw increased demand from oil and gas clients in northeastern B.C. Petrowest is meeting the higher demand through its recent fleet additions....

PENGROWTH ENERGY $7.12 (Toronto symbol PGF; Shares outstanding: 526.2 million; Market cap: $3.7 billion; TSINetwork Rating: Average; Dividend yield: 6.7%; www.pengrowth.com) produced 75,102 barrels a day (55% oil and natural gas liquids, 45% natural gas) in the first quarter of 2014, down 16.3% from 89,702 a year earlier.

The drop was mainly because Pengrowth sold several less important oil and gas properties in Western Canada. It’s investing the proceeds in more promising projects, including its Lindbergh oil sands development in Alberta’s Cold Lake region.

Pengrowth’s cash flow, which excludes these losses, fell 6.9%, to $0.27 a share from $0.29. However, that beat the consensus estimate of $0.25.

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VANGUARD FTSE EMERGING MARKETS ETF $42.42 (New York symbol VWO; buy or sell through brokers) aims to track the Financial Times Stock Exchange (FTSE) Transitions Index, which is made up of common stocks of companies in developing countries. The fund has an MER of just 0.15%.

Vanguard FTSE Emerging Markets ETF’s top holdings include Taiwan Semiconductor (Taiwan: computer chips), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Vale SA (Brazil: mining), Gazprom (Russia: gas utility), China Construction Bank, Tencent Holdings (China: Internet), Industrial & Commercial Bank of China, Naspers Ltd. (South Africa: media) and MTN Group (South Africa: wireless).

The $59.3-billion fund’s breakdown by country is as follows: China (20.6%), Taiwan (13.7%), Brazil (13.7%), India (9.9%), South Africa (9.7%), Mexico (5.7%), Russia (5.4%), Malaysia (5.2%), Indonesia (2.9%), Thailand (2.8%), Turkey (1.9%), Chile (1.7%), Poland (1.7%) and others (5.1%).

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VANGUARD GROWTH ETF $97.09 (New York symbol VUG; buy or sell through brokers) aims to track the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of stocks of large U.S. companies. The fund’s MER is just 0.09%.

The $38.0-billion Vanguard Growth ETF’s top holdings are Apple, Google, Coca-Cola, Philip Morris International, Oracle, Schlumberger, Comcast, Qualcomm, Gilead Sciences and Walt Disney Co.

The fund’s breakdown by industry is as follows: Technology (24.1%), Consumer Services (19.7%), Financials (12.4%), Industrials (12.1%), Health Care (11.0%), Consumer Goods (10.5%), Oil and Gas (7.9%), Materials (1.7%), Utilities (0.4%) and Telecommunication Services (0.2%).

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ENCANA CORP. $26 (www.encana.com) has completed its plan to sell shares of subsidiary PrairieSky Royalty Ltd. (Toronto symbol PSK) to the public. PrairieSky owns the oil and natural gas rights to 5.2 million acres in Alberta....

COMPUTER MODELLING GROUP $14.88 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 78.6 million; Market cap: $1.2 billion; Dividend yield: 2.7%) (all figures split 2-for-1) sells software and consulting services that help oil and gas producers use advanced recovery techniques to get more out of their wells. It has customers in over 50 countries and offices in Calgary, Houston, London, Caracas, Bogota, Kuala Lumpur and Dubai. In the quarter ended March 31, 2014, Computer Modelling’s revenue rose 3.6%, to $20.0 million from $19.3 million a year earlier. Software licence sales (89% of total revenue) rose slightly, but consulting and professional services (11%) jumped 39.1%, thanks to new projects and a large consulting agreement. Earnings gained 6.7%, to $7.7 million from $7.25 million. Per-share earnings jumped 18.8%, to $0.095 from $0.08, on fewer shares outstanding....

BIRCHCLIFF ENERGY $14.75 (Toronto symbol BIR; TSINetwork Rating:Speculative) (403-261-6401;www.birchcliffenergy.com; Units outstanding: 145.0million; Market cap: $2.2 billion; No dividends paid) reports that its daily production rose 21.6% in the three months ended March 31, 2014, to 31,749 barrels of oil equivalent from 26,108 a year earlier. Cash flow per share jumped 122.2%, to $0.60 from $0.27, on the increased production and higher oil and gas prices. The company plans to spend $291 million on exploration and development this year, which should boost its 2014 output to a record 34,000 barrels a day. Birchcliff expects to generate full-year cash flow of $331 million, or $2.30 a share, so it can comfortably afford these outlays. Birchcliff Energy is still a buy.

TRANSCANADA CORP. (Toronto symbol TRP; www.transcanada.com) operates a 68,500-kilometre pipeline network that pumps natural gas from Alberta to Eastern Canada and the U.S. The company’s pipelines supply 20% of North America’s natural gas. In 2013, they provided 51% of TransCanada’s revenue and 53% of its earnings. The company also owns or invests in power plants in Alberta, Ontario, Quebec and the northeastern U.S. In all, these facilities have over 11,800 megawatts of generating capacity. TransCanada’s electricity operations now supply 36% of its revenue and 30% of its earnings. In 2011, the company started up its oil pipeline division. This business mainly consists of the Keystone pipeline, which pumps oil from Alberta to refineries in Illinois, and a distribution hub in Cushing, Oklahoma. Oil pipelines supply the remaining 13% of TransCanada’s revenue and 7% of its earnings....

GENERAL ELECTRIC CO. $26 (New York symbol GE; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 10.0 billion; Market cap: $260.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.ge.com) is one of the world’s largest manufacturers. It makes machinery for power generation and distribution, such as turbines, as well as other products, like jet engines, medical equipment, appliances, lighting and locomotives.

The company also operates GE Capital, which mainly provides loans to GE’s clients. The company scaled back GE Capital after the division suffered big losses in the 2008/09 financial crisis. It now accounts for 30% of GE’s revenue and 37% of its earnings.

As part of these reductions, GE Capital will soon unload its North American consumer lending business as a separate firm called Synchrony Financial (New York symbol SYF). GE will sell 20% of Synchrony’s shares through an initial public offering. After that, the company will give its shareholders the chance to swap their GE stock for Synchrony shares.

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