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by Stockwatch Business Reporter
West Texas Intermediate crude for May delivery added 55 cents to $51.70 on the New York Merc, while Brent for June added 53 cents to $54.89 (all figures in this para U.S.). Western Canadian Select traded at a discount of $11.40 to WTI ($40.30), unchanged. Natural gas for May added six cents to $3.33. The TSX energy index added one point to close at 202.42.
Saskatchewan Viking producer Raging River Exploration Inc. (RRX) lost 61 cents to $9.25 on 5.9 million shares, more than giving back the 37 cents it added yesterday after rumours started swirling that the company was looking to sell itself. Sources told Bloomberg that Raging River had hired GMP FirstEnergy to explore interest from potential suitors, which could include Whitecap Resources Inc. (WCP: $10.42) and the private Teine Energy Ltd. The sources did not speculate on the potential purchase price.
Scotia Capital analyst Cameron Bean, in research note this morning, speculated that the price would not be particularly impressive despite Raging River's status as "one of the strongest operators in Western Canada." The stock is already trading at a "premium valuation," which reduces the chance that a takeover bid would be significantly above the current share price, said Mr. Bean. He added that Raging River's production has a high decline rate (about 45 per cent in 2017, according to his estimates) and that the company will likely become taxable in 2018, two factors that could spook potential buyers. Mr. Bean maintained his "neutral" stance on the stock and left his price target at $11. Perhaps GMP FirstEnergy made some similar points to Raging River. This morning (hours after Mr. Bean's note was published), Raging River announced that it had indeed hired GMP FirstEnergy to review "potential business alternatives" and other options for the company, but that the review is now over and GMP FirstEnergy's services are no longer required.
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