by Stockwatch Business Reporter

West Texas Intermediate crude for February delivery added 24 cents to $93.67 on the New York Merc, while Brent for February added 62 cents to $107.35 (all figures in this para U.S.). Western Canadian Select traded at a discount of $18.90 to WTI ($74.77), up from a discount of $20. Natural gas for February lost 0.7 cent to $4.29. The TSX energy index added 3.04 points to close at 272.00.

Talisman Energy Inc. (TLM) added 29 cents to $12.45 on 6.95 million shares. It had no news, but did get a boosterish mention from some optimistic analysts. The Canaccord Genuity analysts covering North American energy released their "2014 top picks/ideas" yesterday. Among seniors, their favourites are Canadian Natural Resources Ltd. (CNQ: $35.16) and MEG Energy Corp. (MEG: $31.55), but Talisman made the list as the "contrarian buy," largely on the strength of Carl Icahn, an activist investor who started buying the stock in October and now owns over 7 per cent. He has prodded Talisman into adding two hand-picked directors to its board and is almost certainly influencing the company as it looks to unload assets. (Presumably, Talisman will also seek Mr. Icahn's opinion on a new president and CEO, after Hal Kvisle steps down this year.) "We expect additional asset sales," wrote the analysts, "but ultimately, we still believe the company gets acquired."

WesternZagros Resources Ltd. (WZR), which works with Talisman at the Kurdamir block in Iraqi Kurdistan, added four cents to $1.08 on 2.65 million shares, after adding five cents on 6.07 million shares yesterday. There is good news in Kurdistan. The semi-autonomous government has started shipping oil independently of Baghdad through a new pipeline to the Turkish export hub of Ceyhan, with initial volume estimated at 300,000 barrels a day. According to Reuters, the oil is being stored for now and will not be exported without approval from Baghdad, expected later this month. Still, the completion of the pipeline is good news for Kurdish operators. The oil is coming from fields operated by London-listed Genel Energy and Norway's DNO. WesternZagros is not benefiting directly, but the idea is that as export deals progress, bigger companies will come in and acquire smaller players such as WesternZagros or ShaMaran Petroleum Corp. (SNM: $0.455). Neither company has released news since November, but both are expected to do so soon. WesternZagros has been developing the Garmian block, owned with Gazprom. It spudded the Hasira-1 well in June and the Baram-1 well in August, and expected results by the end of 2013. ShaMaran has been drilling the Atrush-4 well at its TAQA-operated Atrush block. It spudded this on Oct. 20 and said drilling would take 70 days, meaning until Dec. 29.

Bellatrix Exploration Ltd. (BXE) added 39 cents to $8.08 on 3.35 million shares. It has released a year-end update showing production of 38,000 barrels of oil equivalent a day, about double its year-end 2012 production of 19,500 barrels a day. (About 10,500 barrels a day came from the December acquisition of Angle Energy.) Bellartix expects to end 2014 producing 47,000 barrels a day, although given that it has increased its rig count -- 10 to 12 operating rigs, up from a firm 10 previously -- it is doubtless hoping to surpass that guidance. The company will focus on the Cardium oil and Notikewin/Fahler gas plays in 2014. Although the Cardium is the largest accumulation of light oil in this part of Canada, Bellatrix's Cardium wells are gassier than those of its competitors: 75 per cent, compared with the industry average of 45 per cent (as estimated by Canaccord). The Notikewin/Fahler wells are also showing especially high gas production. For example, Bellatrix's latest two-mile horizontal flowed at 15.9 million cubic feet a day, plus 571 barrels a day of natural gas liquids, over its first 25 days on production. Bellatrix is essentially betting on a drastic change of fortune for the natural gas industry. The winter heating season always looks like a good time to make that bet, of course, and this winter has been colder than most. According to Bloomberg, AECO natural gas (the price Bellatrix uses) jumped to $4.08 per million British thermal units this weekend, its highest level since June, 2011, while the discount to New York Merc gas fell to 22.6 cents, the lowest in a month. Canadian gas inventories tumbled as net gas exports to the U.S. reached their highest level in three years. For Bellatrix, this means it can lock in higher prices for some of its production. Most of its hedges this year range from $3.80 to $4.37 per thousand cubic feet, compared with last year's average of $3.52. Besides winter, Bellatrix is also counting on British Columbia's planned build-out of its liquefied natural gas industry to boost prices.

Bankers Petroleum Ltd. (BNK) added 16 cents to $4.59 on 5.91 million shares. It has released its fourth quarter update, showing production of 19,303 barrels of oil a day from its Patos-Marinza field in Albania. Average production for the year was 18,169 barrels a day, up from 15,020 barrels a day in 2012. President and CEO David French talked up the "record-breaking year" during a conference call this morning. In terms of production, wells drilled, free cash flow and enhanced oil recovery (EOR) programs, Bankers has never had a better year. Unfortunately, Albania has picked 2014 as the year to introduce several tax changes for oil and gas producers. They are no longer exempt from a 20-per-cent value-added tax, for example, and they may have to pay an excise tax on imported petroleum products starting in April. Mr. French said he is not at all worried. New legislation says the 20-per-cent VAT will be fully reimbursed within about 90 days, and Bankers is in discussions with the government about the potential excise tax. Whatever happens, Bankers has an enforceable stabilization clause in its production contracts that deals with changes in fiscal terms -- so if it has to pay a new tax, it will be able to recover that money through offsets or some other means.

The fiscal changes will not affect Bankers' $313-million budget for 2014. Of that, $15-million will go toward expanding the EOR program. Bankers currently has four zones under evaluation in the southern area of the Patos-Marinza field and plans to expand to the central area this year. An analyst asked if there has been any production response yet. Management replied, "On the EOR response, we haven't seen -- or at this stage we can't really talk about too much of the production response," but preliminary results should be available by midyear. Mr. French had previously estimated that results would arrive in December or early this year. This was based on starting the first polymer injection in January, 2013, and needing about nine to 12 months to gauge results. Most of the EOR programs began in or after the second quarter, though, so Bankers may be waiting until it can group some results together.

Pipeline hysteria: The district of Kitimat plans to hold a non-binding direct vote of electors to gauge support for Enbridge Inc.'s (ENB: $46.17) Northern Gateway. So far, Kitimat has remained neutral on the pipeline, saying it would wait to examine the federal panel report released in December (which supported the project). Last night, the district council voted to conduct a plebiscite. (According to CFTK-TV Terrace, the councillors also considered telephone, mail and on-line surveys, but decided a referendum-style option would be better.) There is no set date for the plebiscite; city officials said it would likely take them several months to prepare. The vote will fulfill the council's January, 2012, resolution to survey Kitimat residents about Northern Gateway once the federal panel's decision came out. The results are non-binding on the council and it is unclear how they will be used.