oil and gas
We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus. The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of high-quality stocks. Here a look at six global ETFs:...
ENCANA CORP. $25.39 (Toronto symbol ECA; Shares outstanding: 740.9 million; Market cap: $19.0 billion; TSINetwork Rating: Average; Dividend yield: 1.2%; www.encana.com) has released more details regarding its plan to spin off its Clearwater oil and gas properties in southern Alberta.
The new company, called PrairieSky Royalty, will hold the oil and gas rights to 5.2 million acres....
The new company, called PrairieSky Royalty, will hold the oil and gas rights to 5.2 million acres....
PASON SYSTEMS $30.37 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 82.4 million; Market cap: $2.5 billion; Dividend yield: 2.0%) is trading near all-time highs as it continues to gain from the boom in U.S. shale oil and gas drilling.
Pason rents equipment for monitoring and managing oil and gas rigs. It also sells communication technology, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors throughout Canada, the U.S., Mexico, Argentina and Australia.
In the three months ended March 31, 2014, the company’s revenue rose 12.7%, to $123.2 million from $109.3 million a year earlier. Higher sales in the U.S., Australia and Canada offset slower drilling activity in Mexico and a significant devaluation of the Argentine currency.
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Pason rents equipment for monitoring and managing oil and gas rigs. It also sells communication technology, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors throughout Canada, the U.S., Mexico, Argentina and Australia.
In the three months ended March 31, 2014, the company’s revenue rose 12.7%, to $123.2 million from $109.3 million a year earlier. Higher sales in the U.S., Australia and Canada offset slower drilling activity in Mexico and a significant devaluation of the Argentine currency.
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TRILOGY ENERGY CORP. $28.59 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290-2900; www.trilogyenergy.com; Shares outstanding: 99.5 million; Market cap: $3.6 billion; Dividend yield: 1.5%) owns oil and gas properties in central Alberta’s Kaybob and Grande Prairie areas. About 61% of Trilogy’s production is natural gas. The remaining 39% is oil.
In the three months ended March 31, 2014, Trilogy produced 33,135 barrels of oil equivalent a day (including gas), down 8.2% from 36,119 barrels a year earlier.
Cash flow per share fell 4.5%, to $0.64 from $0.67, as higher oil and gas prices partly offset the production drop.
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In the three months ended March 31, 2014, Trilogy produced 33,135 barrels of oil equivalent a day (including gas), down 8.2% from 36,119 barrels a year earlier.
Cash flow per share fell 4.5%, to $0.64 from $0.67, as higher oil and gas prices partly offset the production drop.
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CHESAPEAKE ENERGY $29.23 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chkenergy.com; Shares outstanding: 666.2 million; Market cap: $20.0 billion; Dividend yield: 1.2%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 84% gas and 16% oil.
Chesapeake’s shares have nearly doubled since mid-2012, when activist investor Carl Icahn acquired a stake in the firm. Icahn, who has a history of pushing companies to make changes that raise shareholder value, subsequently replaced four of Chesapeake’s eight board members with his nominees. The company also pushed out controversial co-founder, CEO and chairman Aubrey K. McClendon.
As part of its restructuring, Chesapeake sold $4 billion worth of properties in 2013, which let it pay down debt and focus on areas with strong growth potential. It has also cut its costs and is now aiming for a better balance between oil and gas production.
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Chesapeake’s shares have nearly doubled since mid-2012, when activist investor Carl Icahn acquired a stake in the firm. Icahn, who has a history of pushing companies to make changes that raise shareholder value, subsequently replaced four of Chesapeake’s eight board members with his nominees. The company also pushed out controversial co-founder, CEO and chairman Aubrey K. McClendon.
As part of its restructuring, Chesapeake sold $4 billion worth of properties in 2013, which let it pay down debt and focus on areas with strong growth potential. It has also cut its costs and is now aiming for a better balance between oil and gas production.
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Flaherty & Crumrine Investment Grade Fixed Income Fund, $12.36, symbol FFI.UN on Toronto (Units outstanding: 9.1 million; Market cap: $112.5 million; www.bromptongroup.com), mainly holds preferred shares of U.S. companies. Firms in the banking, insurance, utilities and financial services industries make up a combined 87.7% of the fund’s portfolio. Corporate bonds comprise 6.9%, and the remaining 5.4% is cash. The fund’s MER is 1.0%. The fund is hedged against movements of the U.S. dollar against the Canadian dollar. Its value rises and falls solely with the stocks in its portfolio, so it would not give you U.S. dollar exposure. However, hedging costs money, and we feel these outlays are wasted. They can cut the fund’s volatility from one year to the next, but they won’t add to its performance. In addition, we see U.S. dollar exposure as a plus—a valuable form of diversification....
Palliser Oil & Gas, $0.25, symbol PXL on Toronto (Shares outstanding: 63.9 million; Market cap: $15.7 million; www.palliserogc.com), is a Calgary-based junior oil and gas firm that produces heavy oil in the greater Lloydminster area of Alberta and Saskatchewan. In the first quarter of 2014, the company’s average production was about 1,850 barrels of oil equivalent a day (including natural gas). Its current daily output is about 1,800 to 1,900 barrels. Palliser invested just $2 million in its operations during the first quarter, mainly on maintenance and on minimum spending to retain leases. Earlier this year, the company announced that Allan Carswell, who was president, COO, and a director, had left his positions....
YAMANA GOLD INC., $8.38, symbol YRI on Toronto, has succeeded in its joint $3.9-billion bid with Agnico Eagle Mines (symbol AEM on Toronto) for Osisko Mining (symbol OSK). Goldcorp (symbol G) has withdrawn its offer. Agnico Eagle and Yamana will now each own half of Osisko’s assets, including the Canadian Malartic gold mine in Quebec. The acquisition lets Yamana diversify beyond South America and Mexico, where it has seven mines. It should also boost the company’s per-share cash flow. Yamana Gold is still a buy....
Chevron recently warned that harsh winter weather in Canada, the U.S. and Kazakhstan hurt its production and earnings in the first quarter of 2014. This is a minor setback, because its output should rise again as the weather improves.
The company’s long-term outlook is also bright, particularly because it’s getting ready to start up several major projects that should spur decades of growth....
The company’s long-term outlook is also bright, particularly because it’s getting ready to start up several major projects that should spur decades of growth....
PENN WEST $9.35 (Toronto symbol PWT; Shares outstanding: 490.7 million; Market cap: $4.5 billion; TSINetwork Rating: Average; Dividend yield: 6.0%; www.pennwest.com) is one of Canada’s largest oil and gas producers.
Penn West continues to shore up its finances and take steps to boost its value since appointing Rick George as chairman and Allan Markin as vicechairman. These moves include cutting staff, selling assets and lowering its dividend.
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