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by Stockwatch Business Reporter
West Texas Intermediate crude for September delivery lost 29 cents to $97.88 on the New York Merc, while Brent for September lost $1.18 to $104.84 (all figures in this para U.S.). Western Canadian Select traded at a discount of $21.60 to WTI ($76.28), unchanged. Natural gas for August lost 4.3 cents to $3.79. The TSX energy index lost 5.02 points to close at 312.52
Penn West Petroleum Ltd. (PWT) lost 14 cents to $8.30 on 2.72 million shares. Toronto-based Koskie Minsky LLP and Sutts, Strosberg LLP, two of several law firms that sprang into action after Penn West disclosed accounting irregularities earlier this week, have begun a $400-million proposed class action seeking damages for "negligent misrepresentation." Penn West sank to $8.57 from $9.94 earlier this week after announcing a still-in-progress internal accounting probe that so far has found at least $381-million in improperly classified expenses. Lawyers put out a call for clients immediately, of course. Analysts are showing mixed reactions. Capital Markets cut its price target to $10 from $12, TD Securities cut its to $9.50 from $11.50 and FirstEnergy Capital to $10 from $11. Dundee Securities, on the other hand, raised its to $11.30 from $10.75, as analyst Brian Kristjansen focused on the company's second quarter operational results. Analysts as a group had predicted quarterly production of 99,600 barrels of oil equivalent a day. Instead, Penn West produced 108,130 barrels a day, or 105,702 net of adjustments on asset sales. Mr. Kristjansen seems confident about continued success and wrote that he is "not expecting a material impact" from the accounting snafu. Perhaps he believes that Penn West will become this year's Martinrea International Inc. (MRE). Over a few days in November, the auto parts maker fell to $8.43 from over $11, amid allegations that it had booked fictitious profits from an overseas subsidiary. A month later, it fell to $6.91 from nearly $9.50 after announcing that one of its Canadian plants overstated profits from 2005 to 2012. The stock has amply recovered and closed today at $12.67. Not all companies with accounting problems are so lucky. Over a five-month period in late 2012 and early 2013, Poseidon Concepts Corp. plunged to 27 cents from $16.03 because of unpleasant revenue revisions. It ultimately delisted in the spring of 2013.
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