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: $900.8 million; Dividend yield: 5.7%) is a diversified natural resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 356 megawatts of power generation capacity in Cuba, with an additional 150 megawatts starting up soon.
The company is a major nickel producer, with operations in Cuba and Canada. As well, it has started up its 40%-owned Ambatovy mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and is Canada’s largest thermal coal producer.
In the three months ended September 30, 2013, Sherritt’s revenue fell 16.2%, to $286.2 million from $341.5 million a year earlier. Lower nickel and coal prices were the main reasons for the drop. Cash flow per share declined 33.3%, to $0.20 from $0.30.
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The company is a major nickel producer, with operations in Cuba and Canada. As well, it has started up its 40%-owned Ambatovy mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and is Canada’s largest thermal coal producer.
In the three months ended September 30, 2013, Sherritt’s revenue fell 16.2%, to $286.2 million from $341.5 million a year earlier. Lower nickel and coal prices were the main reasons for the drop. Cash flow per share declined 33.3%, to $0.20 from $0.30.
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PASON SYSTEMS $22.28 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403- 301-3400; www.pason.com; Shares outstanding: 82.1 million; Market cap: $1.8 billion; Dividend yield: 2.5%) rents equipment for monitoring and managing land-based oil and gas rigs throughout Canada, the U.S., Mexico and Argentina. It also provides communication systems to remotely collect data from drilling operations.
In the quarter ended September 30, 2013, Pason’s revenue rose 8.1%, to $104.0 million from $96.3 million a year earlier. Strong international sales and slightly higher revenue in Canada offset slower activity in the U.S. Cash flow per share jumped 51.1%, to $0.68 from $0.45.
Pason holds cash of $198.1 million, or $2.41 a share, and has no debt.
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In the quarter ended September 30, 2013, Pason’s revenue rose 8.1%, to $104.0 million from $96.3 million a year earlier. Strong international sales and slightly higher revenue in Canada offset slower activity in the U.S. Cash flow per share jumped 51.1%, to $0.68 from $0.45.
Pason holds cash of $198.1 million, or $2.41 a share, and has no debt.
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CIMAREX ENERGY $99.54 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 86.9 million; Market cap: $8.7 billion; Dividend yield: 0.6%) produces and explores for natural gas and oil. Gas makes up 48% of its output.
Cimarex’s properties are in the Mid-Continent region of the U.S., which includes Oklahoma, Kansas and Texas (47% of production); the Permian Basin of western Texas and southeastern New Mexico (49%); and the Texas Gulf Coast (4%).
In the three months ended September 30, 2013, Cimarex’s production averaged 716.8 million cubic feet of natural gas equivalent per day (including oil). That’s up 12.8% from 635.1 million cubic feet a year earlier.
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Cimarex’s properties are in the Mid-Continent region of the U.S., which includes Oklahoma, Kansas and Texas (47% of production); the Permian Basin of western Texas and southeastern New Mexico (49%); and the Texas Gulf Coast (4%).
In the three months ended September 30, 2013, Cimarex’s production averaged 716.8 million cubic feet of natural gas equivalent per day (including oil). That’s up 12.8% from 635.1 million cubic feet a year earlier.
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DEVON ENERGY CORP. $59.34 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 406.0 million; Market cap: $24.2 billion; Dividend yield: 1.5%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 57% gas and 43% 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 is now focused on its North American projects, which include conventional production, shale oil in Texas and oil sands in Alberta.
To further increase its North American output, Devon recently agreed to pay GeoSouthern Energy $6 billion for oil-producing assets and other properties in Texas’s Eagle Ford shale formation.
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In 2011, Devon sold all of its international and Gulf of Mexico properties, which it saw as risky and expensive to develop. The company is now focused on its North American projects, which include conventional production, shale oil in Texas and oil sands in Alberta.
To further increase its North American output, Devon recently agreed to pay GeoSouthern Energy $6 billion for oil-producing assets and other properties in Texas’s Eagle Ford shale formation.
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ALIMENTATION COUCHE-TARD, $77.60, symbol ATD.B on Toronto, rose over 6% this week after reporting its latest quarterly earnings. In the three months ended October 13, 2013, the company’s sales fell 3.0%, to $9.0 billion from $9.3 billion a year earlier (all figures except share price in U.S. dollars). The year-ago quarter included 92 days of results from Norway’s Statoil Fuel & Retail ASA, which Couche-Tard bought for $2.7 billion in June 2012, while the latest quarter included just 84 days. The shorter period was due to an adjustment to align Statoil’s accounting period with Couche-Tard’s. That was the main reason for the lower revenue. Excluding that, the company benefited from higher fuel volumes and merchandise sales. Couche-Tard gets about 30% of its revenue by selling merchandise....
ENCANA CORP. $18 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 740.1 million; Market cap: $13.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.6%; TSINetwork Rating: Average; www.encana.com) is cutting its reliance on natural gas, as rising shale gas production has cut prices from $11.50 U.S. per thousand cubic feet in 2008 to just $3.60 U.S. today.
Encana now plans to narrow its focus from around 30 properties to five: Montney (B.C.), Duvernay (Alberta), DJ Basin (Colorado), San Juan Basin (New Mexico) and Tuscaloosa Marine Shale (Louisiana).
These five fields also produce significant amounts of oil and natural gas liquids (NGLs), such as butane and propane, and should last decades. Encana expects oil and NGLs to supply 75% of its cash flow by 2017, up from about 35% today.
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Encana now plans to narrow its focus from around 30 properties to five: Montney (B.C.), Duvernay (Alberta), DJ Basin (Colorado), San Juan Basin (New Mexico) and Tuscaloosa Marine Shale (Louisiana).
These five fields also produce significant amounts of oil and natural gas liquids (NGLs), such as butane and propane, and should last decades. Encana expects oil and NGLs to supply 75% of its cash flow by 2017, up from about 35% today.
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PENGROWTH ENERGY $6.57 (Toronto symbol PGF; Shares outstanding: 517.7 million; Market cap: $3.4 billion; TSINetwork Rating: Average; Dividend yield: 7.3%; www.pengrowth.com) has gained over 31% since early July 2013. That’s mainly because the company has successfully completed its plan to sell some of its less important oil and gas properties in Western Canada.
The cash from these sales will help Pengrowth speed up the development of its Lindbergh oil sands project in Alberta. As well, the company’s monthly dividend of $0.04 a share still seems safe and has a 7.3% annualized yield.
Pengrowth is a buy.
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The cash from these sales will help Pengrowth speed up the development of its Lindbergh oil sands project in Alberta. As well, the company’s monthly dividend of $0.04 a share still seems safe and has a 7.3% annualized yield.
Pengrowth is a buy.
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ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $37.54 (New York symbol FXI; buy or sell through brokers) is an exchange traded fund that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange.
The fund’s top holdings are China Mobile, 9.6%; China Construction Bank, 9.0%; Industrial & Commercial Bank, 8.0%; Tencent Holdings, 7.1%, Bank of China, 6.1%; China Overseas Land & Investment, 4.1%; PetroChina, 4.1%, Agricultural Bank of China, 4.0%; and CNOOC, 3.9%.
The fund’s holdings give it the following industry breakdown: Financials, 56.0%; Telecommunications, 16.0%; Oil and Gas, 12.1%; Technology, 7.1%, Basic Materials, 3.7%; and Consumer Goods, 3.2%. Its expense ratio is 0.74%.
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The fund’s top holdings are China Mobile, 9.6%; China Construction Bank, 9.0%; Industrial & Commercial Bank, 8.0%; Tencent Holdings, 7.1%, Bank of China, 6.1%; China Overseas Land & Investment, 4.1%; PetroChina, 4.1%, Agricultural Bank of China, 4.0%; and CNOOC, 3.9%.
The fund’s holdings give it the following industry breakdown: Financials, 56.0%; Telecommunications, 16.0%; Oil and Gas, 12.1%; Technology, 7.1%, Basic Materials, 3.7%; and Consumer Goods, 3.2%. Its expense ratio is 0.74%.
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ENCANA CORP. (Toronto symbol ECA; www.encana.com) is one of North America’s largest natural gas producers. The company is now cutting its reliance on natural gas, as rising shale gas production has cut prices from $11.50 U.S. per thousand cubic feet in 2008 to just $3.60 U.S. today. Encana plans to narrow its focus from around 30 properties to five: Montney (B.C.), Duvernay (Alberta), DJ Basin (Colorado), San Juan Basin (New Mexico) and Tuscaloosa Marine Shale (Louisiana)....
WAJAX CORP. (Toronto symbol WJX; www.wajax.ca) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions). Wajax operates through 128 dealerships across Canada. Its customers are in the natural resource, construction, manufacturing, industrial processing and transportation industries....