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by Stockwatch Business Reporter

West Texas Intermediate crude for December delivery lost $1.28 to $42.93 on the New York Merc, while Brent for December lost $1.63 to $45.81 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.65 to WTI ($28.28), unchanged. Natural gas for December lost 5.7 cents to $2.263. The TSX energy index lost 5.41 points to close at 177.70.

Don Gray's Gear Energy Ltd. (GXE) lost 11 cents to 77 cents on 627,900 shares. It resumed trading this morning, following a trading halt yesterday afternoon ahead of the company's release of its third quarter financials, its 2016 guidance and a plan to get on top of its debt. Investors were not pleased with any of it. The quarterly financials, though generally unsurprising given that Gear provided an operational update on Oct. 16, did disclose that Gear finished this year's drill program on Oct. 25 and is now planning an uneventful remainder of the year. Production, which comes from heavy oil assets in Alberta and Saskatchewan, should remain "relatively stable" at the third quarter average of about 5,500 barrels a day. That is well below the first-half production level of over 6,100 barrels a day. Gear had previously warned that the third and fourth quarters would be particularly affected by shut-ins of uneconomic wells. It tried to stir up some good feeling on Oct. 16 by talking up cost improvements, which allowed it to lower this year's budget to $15-million from $25-million while maintaining the production target at 5,700 to 5,900 barrels a day. Investors remained unhappy. They are even less happy today, because Gear has now set a budget for 2016 that is twice as high as 2015 (at $31-million) with a production target that is actually down from 2015 (at 5,100 to 5,400 barrels a day). Investors are also about to face considerable dilution. Gear has arranged $28.5-million in financings so it can get a handle on its debt, which became an urgent problem last month, when Gear's lenders proposed to reduce the company's $90-million credit facility to $60-million. The facility was and is about $79-million drawn. Gear thus needs money quickly, and has decided to issue debentures and shares at bargain prices, including 14.6 million shares at 75 cents. That will take its share count to 85.4 million from 70.8 million.

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