oil and gas

SHERRITT INTERNATIONAL $3.02 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.0 billion; Dividend yield: 1.3%) has announced that its new Ambatovy mine on the island nation of Madagascar, off Africa’s east coast, has achieved commercial production.

Commercial production is defined as 70% of capacity on average over a 30-day period....

Gear Energy, $3.67, symbol GXE on Toronto (Shares outstanding: 54.0 million; Market cap: $196.4 million; www.gearenergy.com), produces and explores for oil. It has heavy oil production in east-central Alberta and west-central Saskatchewan. In December 2013, the company’s output averaged close to 5,000 barrels of oil equivalent a day. Gear began trading on Toronto in November 2013. In the three months ended September 30, 2013, the company’s cash flow rose 46.7%, to $0.22 a share from $0.15, on higher production and oil and gas prices. Its long-term debt of $52.7 million is a reasonable 27% of its $196.4-million market cap....

BUCKEYE PARTNERS L.P. $75 (New York symbol BPL; Income Portfolio, Utilities sector; Units outstanding: 123.2 million; Market cap: $9.2 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.8%; TSINetwork Rating: Average; www.buckeye.com) operates over 9,600 kilometres of pipelines in the northeastern and midwestern U.S. Its network pumps gasoline, jet fuel and other petroleum products. The partnership also owns oil and gas storage terminals.

Buckeye continues to expand by acquisition. In December 2013, it bought 19 oil-storage terminals on the U.S. east coast and one on the Caribbean island of St. Lucia from Hess Corp. (New York symbol HES). It now has over 120 terminals.

These assets cost Buckeye $850 million. To put that in context, it earned $351.6 million in 2013. That’s up 49.1% from $235.9 million in 2012, which included a $60.0- million charge for a pipeline closure. Earnings per unit rose 36.3%, to $3.23 from $2.37, on more units outstanding.
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GOODYEAR TIRE & RUBBER, $26.76, symbol GT on New York, is up over 10% after reporting strong earnings yesterday. The company also announced that it has used its rising profits to add $1.15 billion in cash to its U.S. hourly workers’ defined-benefit pension plan. This plan is now fully funded, and Goodyear has started to freeze it. A defined benefit plan is where an employer promises to pay a specified monthly retirement benefit regardless of employee contributions or investment performance. Under its recent four-year contract with its U.S. unions, Goodyear has the right to freeze this plan once it’s fully funded....

SNC-LAVALIN GROUP INC. $47 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.8 million; Market cap: $7.1 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.0%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company that specializes in large-scale public works projects, such as roads, bridges, transit systems and watertreatment plants....

BELLATRIX EXPLORATION (Toronto symbol BXE; www.bellatrixexploration.com) produces natural gas (70% of output) and oil (30%) in Alberta, B.C. and Saskatchewan....

Alexander Energy, $0.71, symbol ALX on Toronto (Shares outstanding: 253.7 million; Market cap: $180.1 million; www.alexanderenergy.ca), is a junior oil and gas producer. The company brought in new management in late 2013. The new managers then bought shares from the company that made them the majority shareholders. It now plans to change its name to Spartan Energy. Until recently, the company’s main oil and gas property was at Alexander, Alberta. However, it recently paid $32.5 million for a property in southeastern Saskatchewan that produces 370 barrels of oil a day. Alexander raised $51.5 million in a share issue to pay for the acquisition....

BCE INC., $46.58, Toronto symbol BCE, reported higher-than-expected earnings and raised its dividend this week. In the three months ended December 31, 2013, the company’s earnings rose 16.4%, to $540 million, or $0.70 a share. These figures exclude unusual items, such as costs to integrate recently acquired broadcaster Astral Media. On that basis, BCE’s earnings beat the consensus estimate of $0.69 a share. A year earlier, it earned $464 million, or $0.60 a share. Revenue rose 4.3%, to $5.4 billion from $5.2 billion. In addition to Astral’s contribution, the company is attracting more wireless, high-speed Internet and digital TV customers. That’s helping offset lower revenue from traditional phones....

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. The group administers over $2 trillion U.S. in 170 mutual funds.

Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions....

STANTEC INC. $66.17 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.4 million; Market cap: $3.1 billion; Dividend yield: 1.0%) sells a range of consulting, project delivery, design and technology services. Its clients operate in a variety of industries, including transportation, construction and oil and gas.

The company continues to grow through acquisitions. It just agreed to pay an undisclosed sum for California-based Processes Unlimited International, which has 450 employees in seven offices across California, Texas, Georgia and Tennessee.

Processes Unlimited offers engineering, project management and design services to customers in a wide range of markets, including oil and gas, alternative energy, utilities, food and beverage, packaging, mining and building products.
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