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Energy Summary for July 6, 2015

2015-07-06 20:34 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for August delivery lost $2.98 to $52.53 on the New York Merc, while Brent for August lost $3.81 to $56.54 (all figures in this para U.S.), the worst day for both benchmarks in months. Markets were shaken by Greece's rejection of debt bailout terms, as well as efforts by Iran and world powers to meet a deadline on a nuclear deal, which could lead to a flood of Iranian crude into an already oversupplied market. The deadline is tomorrow, but it has already been extended once, and officials say another extension is possible. Western Canadian Select traded at a discount of $11.45 to WTI ($41.08), unchanged. Natural gas for August lost 1.3 cents to $2.757. The TSX energy index lost 4.34 points to close at 200.20.

Today was a bad day for many oil and gas companies, but a handful stood out. Abby Badwi's Bankers Petroleum Ltd. (BNK) lost 29 cents to $2.645 on 6.38 million shares. Some of this heavier-than-usual selling is likely a reaction to Brent's decline -- Bankers gets Brent-linked pricing for its Albania-based production -- but investors may also be worried about what next week may bring. The company is scheduled to release a second quarter update on July 14. It has already provided clues as to its production, telling shareholders at its May 20 annual meeting that its quarter-to-date output was averaging 19,700 barrels of oil a day, consistent with the prior quarter. The more interesting part of next week's update is that it could include changes to the company's budget and finances. RBC Capital Markets speculated in a new research note that Bankers might "nudge up" its budget, which is currently based on $50 (U.S.) Brent, lower than the year-to-date average of over $58 (U.S.). RBC also noted, however, that the update could contain negative financial news. For example, on April 1, Bankers had to activate its emergency response plan (including a local evacuation) because of an uncontrolled carbon dioxide leak at one of its wells. Investors are still waiting to hear how much this will cost in terms of repairs and compensation; perhaps they will find out next week. Investors may also learn more about the company's cost recovery review. During the first quarter, Bankers received an audit report from the Albanian government with findings that could lead to a $303-million (U.S.) reduction to the company's cost recovery pool and potential taxable position. Bankers did not seem worried at the time, and has been defending its methods to the government, but investors might appreciate an update.

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