This item is part of Stockwatch's value added news feed and is only available to Stockwatch subscribers.

Here is a sample of this item:

by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery added 40 cents to $44.84 on the New York Merc, while Brent for November lost 36 cents to $47.27 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.15 to WTI ($30.69), unchanged. Natural gas for October lost seven cents to $2.72. The TSX energy index lost a fraction to close at 197.79.

Bonavista Energy Corp. (BNP) shot up 71 cents to $4.24 on 5.77 million shares, pleasing investors with news of an asset swap that will expand its two core areas in Alberta in exchange for a non-core asset in British Columbia. The acquired assets are producing 7,200 barrels of oil equivalent a day from formations that include the Bluesky, the Glauconite and the Spirit River group in west-central Alberta and the Deep basin. Bonavista reckons that it can boost the assets' production to 8,500 barrels a day in 2017, and further reckons that this should not cost very much given the "synergies" with its existing land and infrastructure nearby. The company does not have to give up any cash for the new assets and will instead trade a B.C. asset called Blueberry. This is a Montney asset that Bonavista was once very excited about, dubbing the Montney "an important component of its future growth" in early 2015. By the end of 2015, however, all of the Montney and non-Montney assets in B.C. had been put up for sale, as Bonavista looked for ways to tidy up its balance sheet; its goal is to get its net debt below $1-billion by the end of this year. According to the marketing materials posted by TD Securities (Bonavista's adviser for the sale), the B.C. assets as a group were producing nearly 5,000 barrels a day as of November, 2015. Blueberry was contributing nearly 1,200 of that. Now, though, with the assets having been essentially ignored since being put on the chopping block, Blueberry is producing closer to 500 barrels a day. Bonavista is thus trading a 500-barrel-a-day asset for a 7,200-barrel-a-day set of assets. Investors seem pleased. The company has yet to update its guidance to reflect the deal; the current guidance stands at production of 66,000 to 69,000 barrels a day for 2016. Bonavista expects to achieve this while keeping its spending, including its spending on its one-cent quarterly dividend (which yields 0.9 per cent), below cash flow.

The remainder is available to Stockwatch subscribers.
Sign-up for a FREE 30-day Stockwatch subscription and SEE NO ADS