oil and gas

CENOVUS ENERGY INC.$28 (New York symbol CVE;Conservative Growth Portfolio,Resources sector; Sharesoutstanding: 755.6 million;Market cap: $21.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.3%; TSINetworkRating: Average; www.cenovus.com) gets half itsoutput from the western Canadian oil sands.Conventional oil and gas wells supply the other half.

U.S.-based Phillips 66 (New York symbol PSX)owns 50% of Cenovus’s main Foster Creek and ChristinaLake oil sands projects in Alberta. These assetsproduce heavy bitumen, which Cenovus ships to its50%-owned refineries in Illinois and Texas. Phillips 66owns the other 50% of these operations.

In the first three months of 2013, Cenovus produced271,100 barrels of oil equivalent a day (66% oil and34% gas), up 3.1% from 262,900 barrels a year earlier.However, lower oil prices cut Cenovus’s revenueby 5.4%, to $4.3 billion from $4.6 billion a year earlier(all amounts except share price and market cap inCanadian dollars).
...

APACHE CORP. $83 (New York symbol APA;Aggressive Growth Portfolio, Resources sector;Shares outstanding: 391.9 million; Market cap: $32.5billion; Price-to-sales ratio: 2.0; Dividend yield: 1.0%;TSINetwork Rating: Average; www.apachecorp.com)produces oil and gas in the U.S., Canada, the U.K.,Australia, Egypt and Argentina.

The company plans to sell some of its less importantproperties this year, including its offshore oil and gasholdings in the Gulf of Mexico. Offshore drilling ismuch riskier than Apache’s onshore operations. In addition,the 2010 sinking of the Deepwater Horizon rigand the resulting oil spill led to new safety rules thathave raised Apache’s costs.

As well, political uncertainty in Egypt will likelyprompt Apache to try to sell its gas operations there.Egypt supplies 20% of Apache’s gas output.
...

Parkland Fuel Corp., $16.86, symbol PKI on Toronto (Shares outstanding: 69.7 million; Market cap: $1.2 billion, www.parkland.ca), operates gas stations, convenience stores and a fuel distribution business, mostly in western Canada and Ontario. The company was called Parkland Income Fund prior to its conversion to a dividend-paying corporation on December 31, 2010. Parkland owns 136 rural gas stations and convenience stores. Its brands include Fas Gas Plus, Race Trac Gas and Short Stop (convenience stores). Many stations sell propane in addition to gasoline and diesel fuel. The company also operates Esso gas stations in western Canada and Ontario under a licensing deal with Imperial Oil (symbol IMO on Toronto)....

A: DNI Metals, $0.05, symbol DNI on Toronto (Shares outstanding: 74.9 million; Market cap: $3.4 million; www.dnimetals.com), aims to produce a number of metals from its Alberta Black Shale project, about 900 kilometres north of Calgary. These metals include molybdenum, nickel, uranium, vanadium, zinc, copper and cobalt, plus specialty metals, such as scandium, lithium and thorium. Traditional mining methods won’t work on black shale rock, so the company hopes to use a process called bioleaching. Using this process, DNI will dig up the ore, pile it onto a leaching pad and irrigate it with a solution containing certain bacteria. The tiny organisms then “chew up” the rock and expel the metals as waste. The metals are then piped into a refinery and separated....

Imperial Oil aims to double its production, to 600,000 barrels of oil a day, by the end of this decade. A big part of that gain will come from its Kearl oil sands project in Alberta. Kearl, which just started up, adds 78,100 barrels to the company’s daily output....

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 are six international ETFs we like:

ISHARES MSCI JAPAN INDEX FUND $10.60 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The ETF’s top holdings include Toyota, 6.6%; Mitsubishi UFJ Financial, 3.0%; Honda Motor, 2.5%; Sumitomo Mitsui Financial, 2.1%; Softbank Corp., 1.9%; Mizuho Financial Group, 1.8%; Canon, 1.6%; Japan Tobacco, 1.5%; Takeda Pharmaceutical, 1.4%; and Hitachi, 1.3%.

The fund’s industry breakdown is as follows: Consumer Discretionary, 21.8%; Financials, 20.1%; Industrials, 18.9%; Information Technology, 10.7%; Consumer Staples, 6.5%; Health Care, 6.2%; Materials, 6.2%; Telecommunication Services, 4.7%; Utilities, 3.1%; and Energy, 1.3%.

iShares MSCI Japan Index Fund was launched on March 12, 1996....

WAJAX CORP. $32.54 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212- 3300; www.wajax.ca; Shares outstanding:16.7 million; Market cap: $528.7 million; Dividend yield: 7.4%) sells and services cranes, forklifts and other heavy equipment. It also sells related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions).

In the quarter ended March 31, 2013, Wajax’s revenue fell 6.1%, to $336.3 million from $358.1 million a year earlier. Earnings per share fell 39.8%, to $0.62 from $1.03.

The declines mostly came from reduced activity in the western Canadian oil and gas industry, which hurt results at Wajax’s power systems business. Lower mining equipment sales more than offset strength in the forestry and construction markets.
...

DEVON ENERGY CORP. $54.13 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 406.0 million; Market cap: $22.5 billion; Dividend yield: 1.6%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 59% gas and 41% 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.

Devon has formed joint ventures to cut the risk of its big development projects. Last year, it sold a onethird stake in five shale oil and gas fields to giant Chinese state-owned petroleum and chemical company Sinopec for $2.2 billion. As well, Japan’s Sumitomo Corp. bought 30% of the Cline and Wolfcamp shales in Texas for $1.4 billion.
...

ENI SpA (ADR), $46.10, symbol E on New York (ADRs outstanding: 1.8 billion; Market cap: $83.3 billion; www.eni.com), is an Italy-based integrated energy company. ENI is involved in a wide range of businesses: it produces and explores for oil and gas; ships and markets gas; generates power; operates refineries; and services oil and gas wells. In addition, it transports, distributes and stores gas in Italy through 20.22%-held Snam SpA. The company now produces 1.7 million barrels of oil a day. It aims to increase its output by 4% a year until 2016....

TEMPUR-PEDIC INTERNATIONAL INC., $42.28, symbol TPX on New York, is changing its name to Tempur Sealy International. Its stock will continue to trade under the TPX symbol. Tempur-Pedic completed its $1.3-billion purchase of rival Sealy Corp. in March 2013. This was a major acquisition for Tempur-Pedic, but it lets the company diversify into the market for traditional spring-coil beds. That should help it offset rising competition in its current business. The company makes and distributes Swedish mattresses and neck pillows made from its proprietary Tempur material, which conforms to the body to provide support and help alleviate pressure points. Simmons Bedding Co. and Serta Inc. have both successfully launched memory-foam mattresses that directly compete with Tempur-Pedic’s products....