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by Stockwatch Business Reporter

West Texas Intermediate crude for July delivery added $1.77 to $47.98 on the New York Merc, while Brent for August added $1.98 to $49.17 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.15 to WTI ($34.84), down from a discount of $12.10. Natural gas for July added 4.3 cents to $2.623. The TSX energy index added 2.53 points to close at 183.60.

Alberta gas producer Bonavista Energy Corp. (BNP) added seven cents to $3.23 on 3.09 million shares, regaining the six cents it lost yesterday after putting a cool $115-million in its pocket. It closed a bought deal (including the full exercise of the overallotment option) of 34.4 million shares at $3.35 each, boosting its share count to about 248 million. The proceeds will go toward debt reduction. Net debt was about $1.2-billion as of March 31. According to a new presentation on Bonavista's website, the company will be able to reduce debt by $239-million this year, assuming it uses the financing proceeds, currency hedges and excess cash flow. Bonavista is fairly confident in this year's cash flow because it has hedged more than four-fifths of its gas production and around three-quarters of its oil production over the rest of the year. This also gives it confidence in its one-cent monthly dividend, which yields 3.7 per cent. To bolster the balance sheet even more, and because it wants to focus on its 66,500-barrel-a-day liquids-rich gas assets in Alberta, Bonavista has been trying to sell its roughly 5,000-barrel-a-day non-core assets in the B.C. Montney. Given all that, TD Securities analyst Aaron Bilkoski hiked his price target to $4.25 from $3.25 in a bullish research note this morning, opining that "covenant concerns [are] likely a thing of the past" and Bonavista is "poised to outperform during a commodity price recovery." (Mr. Bilkoski's employer co-led the $115-million financing and is Bonavista's exclusive financial adviser for the marketing of the B.C. Montney asset.)

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