oil prices

VERIZON COMMUNICATIONS INC., $47.38, New York symbol VZ, is negotiating with U.K.-based Vodafone Group plc (Nasdaq symbol VOD) to buy the 45% of Verizon Wireless that it doesn’t already own. Verizon Wireless is a joint venture that sells wireless services to 100.1 million subscribers in the U.S. In the second quarter of 2013, it supplied 67% of Verizon’s revenue and 80% of its earnings. Buying full control could cost Verizon as much as $130 billion. That’s almost equal to the company’s $135.6 billion market cap (or the total value of all its outstanding shares)....

MAPLE LEAF FOODS INC., $14.44, Toronto symbol MFI, rose 8% on Friday after it agreed to sell its Rothsay rendering operations to Texas-based Darling International Inc. (New York symbol DAR). Rothsay recycles by-products from Maple Leaf’s main meat-processing operations into a variety of ingredients for other products, including animal feed, soaps, lotions, cosmetics, fertilizers and plastics. Rothsay also makes biodiesel fuels. Maple Leaf will receive $645 million when the deal closes, probably by the end of 2013. That’s equal to 32% of its $2.0-billion market cap (or the value of all of its outstanding shares)....

Bankers Petroleum, $3.33, symbol BNK on Toronto (Shares outstanding: 254.5 million; Market cap: $870.4 million; www.bankerspetroleum.com), is a Canadian firm with heavy-oil assets in Albania. The company produces over 18,300 barrels a day from its Patos Marinza heavy-oil field. It also holds 100% of the nearby Kucova field. Bankers has a deal with state-owned Albpetrol to take over and reactivate 120 to 130 wells each year. The company believes it can continue to increase its production and cash flow....

SYMANTEC CORP., $26.52, Nasdaq symbol SYMC, sells computer-security technology, including anti-virus and email-filtering software, to businesses and consumers. The stock jumped 8% this week after the company reported record quarterly revenue and earnings. In its fiscal 2014 first quarter, which ended June 28, 2013, Symantec’s revenue rose 2.5%, to $1.71 billion from $1.67 billion a year earlier. That beat the consensus estimate of $1.64 billion. The company is doing a good job of selling its products as ongoing subscriptions instead of one-time purchases. Subscriptions now account for 45% of Symantec’s revenue, up from 44% a year ago....

Painted Pony Petroleum, $7.60, symbol PPY on Toronto (Shares outstanding: 88.4 million; Market cap: $672.3 million; www.paintedpony.ca), operates in two areas: southeastern Saskatchewan (in the Bakken shale oil area) and northeastern B.C. (natural gas). About 79% of its production is gas. The remaining 21% is oil. In the three months ended March 31, 2013, the company’s production rose 22.9%, to 8,596 barrels of oil equivalent per day (including gas) from 6,993 barrels a year earlier. Cash flow per share rose 6.7%, to $0.16 from $0.15. The higher production and higher gas prices offset lower oil prices. The company holds cash of $41.8 million, or $0.48 a share, and is debt-free....

ENERPLUS CORP. $15.55 (Toronto symbol ERF; Shares outstanding: 199.7 million; Market cap: $3.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 7.0%) produces an average of 87,183 barrels of oil equivalent per day (52% gas and 48% oil).

The company’s properties are mainly in Alberta, Saskatchewan, B.C., North Dakota and Montana, as well as the Marcellus Shale, which passes through Pennsylvania, New York, Ohio and West Virginia.

In the three months ended March 31, 2013 Enerplus’s cash flow per share rose 1.2%, to $0.87 from $0.86 a year earlier. Oil prices fell 8.6%, but that was offset by a 10.1% overall production increase and 36.5% higher gas prices.
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ARC RESOURCES $27.53 (Toronto symbol ARX; Shares outstanding: 311.1 million; Market cap: $8.8 billion; TSINetwork Rating: Speculative; Dividend yield: 4.4%; www.arcresources.com) produces oil and natural gas in western Canada. The company’s average daily output of 95,472 barrels of oil equivalent (including natural gas) is weighted 61% to gas and 39% to oil.

In the three months ended March 31, 2013, cash flow per share rose 4.8%, to $0.65 from $0.62. Production increased 2.1%, and a 22.2% rise in gas prices more than offset an 8.4% decline in oil prices.

ARC’s long-term debt is $762.0 million, or a low 8.7% of its market cap. It trades at 10.2 times its forecast 2012 cash flow of $2.70 a share.
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COMPUTER MODELLING GROUP (Toronto symbol CMG; www.cmgroup.com) sells consulting services and software that help oil and gas producers use advanced recovery techniques to get more out of their existing wells. The company has customers in over 50 countries and offices in Calgary, Houston, London, Caracas and Dubai. In the three months ended March 31, 2013, Computer Modelling reported revenue of $19.3 million. That’s up 12.0% from $17.2 million a year earlier....

Natural gas prices have almost doubled in the past year, but junior producers’ shares have not kept pace. That’s partly because many of them produce oil as well as gas, and oil prices have fallen in the last 12 months. As well, investors worry that ongoing shale discoveries will keep increasing gas supplies, which will push prices back down.

Even so, the long-term outlook for gas demand and prices is positive....

BLACKBERRY INC., $11.08, Toronto symbol BB, fell 26% on Friday after the company reported lower-than-expected earnings. In its 2014 first quarter, which ended June 1, 2013, BlackBerry shipped 6.8 million smartphones, down 12.8% from 7.8 million a year ago. The latest quarter’s shipments included 2.7 million of its new, higher-priced BlackBerry 10 models, which fell short of the consensus estimate of 3.3 million. BlackBerry also lost $84 million, or $0.16 a share (all amounts except share price in U.S. dollars). Still, that’s a big improvement over the $510 million, or $0.97 a share, it lost a year earlier....