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Energy Summary for June 29, 2015

2015-06-29 20:25 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for August delivery lost $1.30 to $58.33 on the New York Merc, while Brent for August lost $1.25 to $62.01 (all figures in this para U.S.). Global equity and commodity markets were shaken by the rising likelihood of a Greek debt default tomorrow. As well, oil markets were on edge after U.S. and Iranian officials stated that negotiations on Iran's nuclear program -- talks that could pave the way for the lifting of Western sanctions on Iranian crude exports -- will likely be extended past tomorrow's deadline. Western Canadian Select traded at a discount of $11.35 to WTI ($46.98), up from a discount of $11.40. Natural gas for August added 3.2 cents to $2.80. The TSX energy index lost 5.01 points to close at 203.76.

Dr. Richard Walls's Mapan Energy Ltd. (MPG) added 48 cents to $1.37 on 38.2 million shares, after accepting an all-share takeover offer from Tourmaline Oil Corp. (TOU), down $1.19 to $37.41 on 1.84 million shares. Tourmaline will offer 0.0379 of a share for each share of Mapan. Based on last week's average weighted stock price for Tourmaline of $38.78, the deal values Mapan's stock at $1.47, a 65-per-cent premium to Mapan's weighted average over the same period. It is also the second merger for Mapan in less than a year. Last July, the then-private Mapan decided to go public through a reverse takeover of Bob Lamond's public but barely active Paris Energy, in a deal that valued Mapan's soon-to-be-listed stock at $2. Mapan also arranged a $126-million bought deal of subscription receipts at $2. The proceeds were used mainly to buy $132.5-million of gas-weighted assets in the Deep Basin of west-central Alberta and northeast British Columbia from Shell Canada. The assets were producing 7,000 barrels of oil equivalent a day. Dr. Walls, the president, CEO and founder of Mapan, told the press at the time that he had actually started looking at the Shell Canada assets in 2013 and founded Mapan in early 2014 specifically to acquire them. The asset acquisition and reverse takeover of Paris both closed on July 31, 2014. That turned out to be an important day for a different reason: The WTI oil benchmark crossed below $100 (U.S.) that day and has stayed below ever since. Mapan focuses on gas, not oil, but gas prices have also suffered. So has Mapan's production itself. As a result of lengthy infrastructure outages, production averaged 5,781 barrels a day from July 31 to Dec. 31, 2014, and as of early May, 2015, it was just 4,850 barrels a day.

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