Offshore Shutdown a Minor Setback

Article Excerpt

PETRO-CANADA $53 (Toronto symbol PCA; Conservative Growth Portfolio, Resources sector; SI Rating: Average) has suspended production at its Terra Nova offshore oil platform near Newfoundland due to mechanical problems with a generator. Petro-Canada owns 34% of Terra Nova, and operates it. The company had already planned to shut down Terra Nova for about five weeks this summer for maintenance. But this latest setback will delay the rig’s restart until the fall. Terra Nova accounted for 8% of Petro-Canada’s daily production in 2005. However, rising oil prices should cushion the impact of the lost production. The stock is still attractive at 11.1 times its forecasted 2006 earnings of $4.77 a share, and at 6.7 times its cash flow of $7.87. Petro-Canada is a buy. buy…

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