oil and gas

TransForce Inc., $12.87, symbol TFI on Toronto (Shares outstanding: 96.5 million; Market cap: $1.2 billion; www.transforcecompany.com), is a leading Canadian trucking company. Its fleet is the largest in the country, with 10,500 trucks and 11,300 trailers. The company also has exclusive partnerships that extend its reach into the U.S. Montreal-based TransForce was an income trust from September 2002 to May 2008. It has four main divisions:...

STANTEC INC. $24.89 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 45.7 million; Market cap: $1.1 billion; No dividends paid) sells a range of consulting, project delivery, design/build and technology services. The company’s clients operate in a wide variety of markets, including industry, environment, transportation and construction. Stantec has over 11,000 employees in 170 locations throughout North America. It also has four international offices. In the three months ended September 30, 2011, the company’s revenue rose 11.3%, to $430.4 million from $386.7 million a year earlier. That partly reflects contributions from companies Stantec recently bought. In addition, the company is working on a number of new projects for customers in a range of industries, including mining and oil and gas. Before one-time items, earnings rose 13.8%, to $28.9 million, or $0.63 a share, from $25.4 million, or $0.55 a share. Stantec continues to grow by acquisition. For example, in October 2011 it bought Entran Inc., a Lexington, Kentucky-based consulting and engineering firm with about 115 employees. Entran specializes in transportation planning, including designing roads and bridges....

DELPHI ENERGY $2.20 (Toronto symbol DEE; TSI Network Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares outstanding: 119.2 million; Market cap: $262.2 million; No dividends paid) explores for oil and natural gas in Alberta and B.C. The company is now focusing on its Bigstone, Hythe and Wapiti/Gold Creek properties in northwestern Alberta. Gas makes up 72% of Delphi’s daily output; the remaining 28% is oil. In the three months ended September 30, 2011, Delphi’s average daily output rose 10.5%, to a record 8,967 barrels of oil equivalent (including natural gas) from 8,114 barrels a year earlier....

SHERRITT INTERNATIONAL $5.45 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 296.4 million; Market cap: $1.6 billion; Dividend yield: 2.8%) reports that its earnings per share jumped 114.3% in the three months ended September 30, 2011, to $0.15 from $0.07. Revenue rose 13.0%, to $466.4 million from $412.7 million a year earlier. The improved results were mainly due to higher coal and oil prices. Sherritt is a natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power-generation capacity in Cuba....

Because of today’s high government debt, high joblessness and high deficit spending, many people expect we’ll have to suffer through rising taxes and weak economic growth for the next decade. This belief makes sense, but only if you disregard recent developments in energy. Before the start of the financial crisis, pessimists used to look on spikes in oil prices as the greatest threat to the world economy. Oil is a key factor in a lot of industrial activity, as a raw material or as fuel for transportation. Oil is also concentrated in a few locations around the world, particularly the Middle East, so it’s vulnerable to transport bottlenecks that result in supply shortages. When oil prices shoot up, the economy suffers. This, though, could change in the next few years due to the development of oil and gas production from shale and other so-called “tight rock”. Shale oil and gas discoveries are turning up all around the world. New technology can bring these finds to profitability in as little as eight months, compared to two years or so for many conventional finds....

Canadian Natural Resources Ltd., $37.23, symbol CNQ on Toronto (Shares outstanding: 1.1 billion; Market cap: $41.0 billion; www.cnrl.com), operates in western Canada (including its 100%-owned Horizon Oil Sands Project), the North Sea and off the coast of West Africa. The company’s product mix is about 85% oil and 15% natural gas. Canadian Natural gets about 84% of its production from its conventional North American oil-and-gas properties, which are located in B.C., Alberta and Saskatchewan. The company also has heavy oil operations in Alberta’s Athabasca region, at Pelican Lake, Primrose North, Primrose South and Primrose East. The company started up its Horizon Oil Sands Project in 2009. In January 2011, a fire in a processing unit forced Canadian Natural to halt production at Horizon. Production resumed on August 16, 2011....

DUNDEE REIT, $32.92, symbol D.UN on Toronto, owns and manages 18.9 million square feet of office, industrial and retail space. The real estate investment trust’s occupancy rate is 95.8%. In the three months ended September 30, 2011, Dundee’s revenue rose 75.4%, to $110.9 million from $63.2 million a year earlier. Most of the increase came from properties the trust recently purchased. The best way to assess a real estate investment trust’s operating performance is to look at its cash flow, and Dundee’s cash flow rose 69.4% in the latest quarter, to $36.6 million from $21.6 million. Cash flow per unit rose just 11.5%, to $0.58 from $0.52, due to more units outstanding (the trust issued new units to pay for the acquired properties)....

CGX Energy, $1.04, symbol OYL on Toronto (Shares outstanding: 193.7 million; Market cap: $201.5 million; www.cgxenergy.ca), is a Canadian oil and gas exploration company that is mainly focused on exploring for oil in the Guyana/Suriname Basin. The company recently raised $92 million in a share issue. As part of the issue, Pacific Rubiales, symbol PRE on Toronto, bought shares to take a 19% interest in CGX. CGX is not yet producing oil and gas, but it does hold a number of promising drilling prospects. It now has the funds to undertake an extensive exploration program. The company could become a takeover target if it is successful in finding oil and gas, and Pacific Rubiales could be a potential buyer....

Connacher Oil & Gas, $0.47, symbol CLL on Toronto (Shares outstanding: 448.0 million; Market cap: $210.6 million; www.connacheroil.com), produces bitumen at its Great Divide Pod One and Algar projects in Alberta. It also owns conventional crude oil and natural gas assets in central Alberta, and it operates a heavy oil refinery in Great Falls, Montana. Extracting oil from oil sands is hugely expensive. That makes oil sands profit more vulnerable to a drop in oil prices. In addition, Connacher has built up significant long-term debt by investing in its oil sands projects. It has refinanced its $930.8 million debt at lower rates, but the debt is still a very high 4.4 times its $210.6 million market cap. Connacher has been rumoured to be a takeover candidate for a while, but its low production, high costs and large debt could make it less attractive to potential buyers. Meanwhile, it needs to find a partner to help finance any expansion of its operations. Alternatively, it may need to sell some of its assets to raise cash....

Total S.A. (ADR), $51.32, symbol TOT on New York (Shares outstanding: 2.3 billion; Market cap: $118.1 billion; www.total.com), is one of the world’s largest publicly traded integrated oil companies. Total is based in France. The company is engaged in various aspects of the oil and gas industry around the world. It also has interests in refineries, chemical production and service stations. In the three months ended September 30, 2011, Total’s earnings rose 23.8%, to $4.0 billion, or $1.75 per ADR. A year earlier, it earned $3.2 billion, or $1.42 per ADR. Revenue rose 25.7%, to $65.2 billion from $51.9 billion....