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by Stockwatch Business Reporter

West Texas Intermediate crude for September delivery lost 78 cents to $41.14 on the New York Merc, while Brent for September lost 77 cents to $42.70 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.55 to WTI ($27.33), up from a discount of $14.65. Natural gas for August added 0.8 cent to $2.68. The TSX energy index lost 2.98 points to close at 185.08.

Alberta producer Bonavista Energy Corp. (BNP) lost 19 cents to $3.30 on 3.74 million shares, failing to please investors with its second quarter financials and rejigged guidance. Quarterly production and cash flow came to 67,561 barrels of oil equivalent a day and 26 cents a share, in line with analysts' predictions, but adjusted loss came to 19 cents a share, much worse than predictions of a loss of 14 cents a share. Bonavista brushed this off by declaring that its main goal of improving its financial flexibility continued to meet with "much success" during the quarter. It pointed out that its year-to-date operating costs per barrel are nearly one-fifth lower than they were a year earlier. As well, Bonavista raised $115-million in May by issuing 34.32 million shares at $3.35, and put the proceeds toward its debt. After quarter-end, on July 12, Bonavista sold non-core Southern Alberta assets producing about 1,200 barrels a day for $58-million. (The buyer was not identified, but appears to be Tamarack Valley Energy Ltd. (TVE: $3.33), based on similarities in both companies' disclosures.) All of the above should help with Bonavista's goal of getting its net debt below the $1-billion mark by the end of this year, compared with $1.3-billion at the end of last year. It reckons it can accomplish this without cutting its dividend again. (The one-cent monthly dividend was turned into a one-cent quarterly dividend in February. The yield is now 1.2 per cent.) Bonavista is also feeling optimistic enough to boost its 2016 budget to a range of $145-million to $155-million from a range of $140-million to $145-million. This boost is expected to allow Bonavista to maintain its production guidance at 66,000 to 69,000 barrels a day despite the above-mentioned asset sale, as well as to meet its new production target of 70,000 barrels a day in January of next year.

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