Producers need them more than ever

Article Excerpt

COMPUTER MODELLING GROUP $12.73 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgl.ca; Shares outstanding: 78.6 million; Market cap: $1.0 billion; Dividend yield: 3.1%) sells software and consulting services that help conventional oil and gas producers create complex 3D models of reservoirs. That lets them squeeze more out of those reservoirs using advanced recovery techniques such as injecting steam or chemicals. Typically, only 25% to 30% of oil and gas is recovered during primary production. Unconventional producers, using hydraulic fracturing, or fracking, of oil and gas-bearing shale, can also use Computer Modelling’s software to determine optimal drilling locations and depths. In the three months ended December 31, 2014, Computer Modelling’s revenue rose 31.1%, to $25.2 million from $19.2 million a year earlier. Software licensing revenue (92% of the total) rose 34.8%, and consulting and professional services revenue (8%) was virtually unchanged. Earnings jumped 52.4%, to $11.0 million, or $0.14 a share, from $7.2 million or $0.09. Earnings benefited from the…