16:02:28 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Energy Summary for Sept. 27, 2016

2016-09-27 20:57 ET - Market Summary

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 November delivery lost 69 cents to $44.93 on the New York Merc, while Brent for November lost 68 cents to $46.29 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.20 to WTI ($30.73), up from a discount of $14.35. Natural gas for October lost two cents to $2.99. The TSX energy index lost 3.38 points to close at 185.67.

Clay Riddell's Perpetual Energy Inc. (PMT) added 19 cents to $1.97 on 90,900 shares, after making more progress on what it has called its "top four strategic priorities" for 2016. One was to "maximize [the] value potential" of its shallow gas assets in eastern Alberta. Based on today's press release, that meant arranging a "strategic disposition" -- in other words, a sale, but structured in such a way that Perpetual might still benefit from the assets if gas prices rise. At current prices, the assets' production of about 35.5 million cubic feet equivalent a day is cash flow negative. (For context, Perpetual produced 85.2 million cubic feet of gas a day and 1,073 barrels of oil and liquids a day, for a total of 15,959 barrels of oil equivalent a day, in the second quarter.) The negative status reflects not only gas prices, but also municipal property taxes, which Perpetual calls "extremely" high. It may have a point. The taxes on Perpetual's shallow gas production in eastern Alberta came to $9.7-million in 2015, representing 130 per cent of operating netbacks before such taxes, according to the company's 2015 financials. Unloading the assets and their associated liabilities will plug this drain on cash flow. Yet Perpetual is not entirely walking away. It has set up marketing agreements that provide a call on about 90 per cent of the production until Aug. 31, 2018, which it says will benefit it if gas prices go up. All in all, it seems pleased with the arrangement and eager to put a check mark beside one of the items on its above-mentioned to-do list.

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

© 2024 Canjex Publishing Ltd. All rights reserved.


Reader Comments - Comments are open to paying subscribers of Stockwatch and unmoderated, although libelous remarks, obscene language and impersonations may be deleted. Opinions expressed do not necessarily reflect the views of Stockwatch.
For information regarding Canadian libel law, please view the University of Ottawa's FAQ regarding Defamation and SLAPPs.


Comments for this item are closed