oil and gas

PEMBINA PIPELINE CORPORATION $25.49 (Toronto symbol PPL; Shares outstanding: 165.7 million; Market cap: $4.3 billion; TSI Network Rating: Extra Risk; Dividend yield: 6.1%; www.pembina.com) owns nine pipeline systems with a total length of over 8,000 kilometres. These pipelines pump oil and gas from fields in B.C. and Alberta to refineries, or feed into major pipelines, such as the Enbridge Pipeline System. Pembina also owns the Syncrude, Horizon and Cheecham pipelines, which pump crude oil from the Alberta oil sands. In addition, the company holds a 50% stake in the Fort Saskatchewan Ethylene Storage Limited Partnership. It also owns the Cutbank Complex, a network of natural gas gathering and processing facilities. In the three months ended June 30, 2011, Pembina’s cash flow rose 42.8%, to $83.1 million, or $0.50 a share, from $58.2 million, or $0.36 a share, a year earlier. That’s because producers shipped more oil and gas through Pembina’s pipelines....

Pason Systems, symbol PSI on Toronto, rents equipment that its customers use to monitor and manage land-based oil rigs. Pason is one of the technology stocks we analyze in Stock Pickers Digest, our newsletter that recommends stocks for the part of your portfolio you devote to aggressive investing. It also provides communication systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas companies and drilling contractors throughout Canada, the U.S., Mexico and Argentina....

Canyon Services Group, $12.28, symbol FRC on Toronto (Shares outstanding: 60.9 million; Market cap: $710.9 million; www.canyontech.ca), provides specialized oil and gas fracturing and well services. Hydraulic fracturing, or “fracking,” involves pumping water and chemicals into rock formations that contain oil or natural gas. This fractures the rock and releases the oil and gas. In the three months ended June 30, 2011, Canyon lost $6.6 million, or $0.11 a share. A year earlier, it earned $91,000, or nil per share. However, the loss in the latest quarter was largely caused by wet weather across western Canada that slowed drilling oil and gas development. Canyon trades at 8.7 times this year’s forecast earnings of $1.40 a share, and yields 0.8%....

BHP Billiton Ltd. ADRs, New York symbol BHP, is the world’s largest mining company, with major operations in Australia, South Africa, Chile and the U.K. It produces iron ore, coal, oil, aluminum, manganese, diamonds and titanium. BHP is one of the blue chip mining stocks we analyze in our Wall Street Stock Forecaster newsletter. In the fiscal year ended June 30, 2011, BHP earned $21.7 billion, or $7.87 per ADR (each American Depositary Receipt represents two BHP common shares). That’s up 73.9% from $12.5 billion, or $4.48 per ADR, in fiscal 2010. Even so, the latest earnings missed the consensus forecast of $7.16 per ADR. Revenue rose 35.9%, to $71.7 billion from $52.8 billion....

APPLE INC., $383.58, Nasdaq symbol AAPL, announced this week that Steve Jobs has resigned as its chief executive officer. However, he will continue as chairman of Apple’s board of directors. Jobs’ health has been an ongoing risk factor for Apple investors. That’s because has played a large role in developing some of Apple’s most successful products, such as the iPhone and iPad. The stock fell 6% on the news, but quickly recovered. That’s because Jobs has hired executives who will probably continue to create innovative products....

COMPUTER MODELLING GROUP LTD., $12.43, symbol CMG on Toronto, makes software and supplies services that help its clients get as much oil as possible from their existing wells. The company makes mostly recurring revenue from software licences and consulting contracts. That gives it long-term stability. In the three months ended June 30, 2011, Computer Modelling’s revenue rose 32.2%, to $15.9 million from $12.1 million a year earlier. Licence revenue rose 42%; that more than offset a 19% drop in consulting and professional services revenue, due to the strong Canadian dollar. Earnings rose 57.6%, to $6.7 million, or $0.18 a share, from $4.2 million, or $0.12 a share....

Precision Drilling Corp., Toronto symbol PD, provides contract-drilling services to oil and gas producers. The company owns 360 drilling rigs in Canada, the U.S. and Mexico. We analyze Precision in The Successful Investor, our newsletter that recommends stock picks for conservative investors. Precision recently converted from an income trust to a regular corporation. Investors received one common share for each trust unit they held. The change was in response to Ottawa’s new tax on income-trust distributions, which came into effect on January 1, 2011....

Trilogy Energy Corp., symbol TET on Toronto, owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 76% of Trilogy’s production is natural gas. The remaining 24% is oil. Trilogy is one of the natural gas stocks we analyze in Stock Pickers Digest, our newsletter that recommends investments that may be appropriate for the part of your portfolio you devote to aggressive investing. In the three months ended June 30, 2011, Trilogy produced an average of 29,320 barrels of oil equivalent per day (including natural gas). That was up 21.7% from 24,087 barrels a day a year earlier. Trilogy’s daily production should jump to an average of 30,000 barrels for all of 2011....

SHERRITT INTERNATIONAL $5.64 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 296.2 million; Market cap: $1.6 billion; Dividend yield: 2.7%) is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power-generation capacity in Cuba. Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer. In the three months ended June 30, 2011, Sherritt’s revenue rose 23.2%, to $500.6 million from $406.3 million. Excluding one-time items, earnings per share rose 5.3%, to $0.20 from $0.19. Higher nickel sales, as well as higher prices for coal and oil, were the main reasons for the improved results. Cash flow per share rose 13.6%, to $0.50 from $0.44....

DELPHI ENERGY $2.18 (Toronto symbol DEE; TSI Network Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares outstanding: 119.7 million; Market cap: $250.3 million; No dividends paid) explores for oil and natural gas in Alberta, Saskatchewan and B.C. Gas makes up 70% of Delphi’s daily output; the remaining 30% is oil. In the three months ended June 30, 2011, Delphi’s average daily output rose 10.8%, to a record 8,906 barrels of oil equivalent (including natural gas) from 8,035 barrels a year earlier. The higher production pushed up Delphi’s cash flow by 40.1%, to $17.5 million from $12.5 million. Cash flow per share rose 25%, to $0.15 from $0.12, on more shares outstanding....