Buy Mart, hold on to Trilogy

Article Excerpt

TRILOGY ENERGY CORP. $26.56 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290- 2900; www.trilogyenergy.com; Shares outstanding: 99.4 million; Market cap: $3.3 billion; Dividend yield: 1.6%) owns oil and gas properties in central Alberta’s Kaybob and Grande Prairie areas. About 58% of Trilogy’s production is natural gas. The remaining 42% is oil. In the three months ended September 30, 2013, Trilogy produced 31,211 barrels of oil equivalent a day (including gas), down 6.6% from 33,412 barrels a year earlier. Cash flow per share rose 15.0%, to $0.46 from $0.40, on higher oil prices. The company plans to spend $375 million on exploration and development this year, down 6.3% from the $400 million it likely spent in 2013. As well, it’s now focusing on its shale oil prospects at Kaybob and spending less on its more mature oil pools in the same area. That shift could slow Trilogy’s production growth this year, but it could push its average daily output to over 42,000…