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Energy Summary for May 17, 2022

2022-05-17 20:33 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for June delivery lost $1.80 to $112.40 on the New York Merc, while Brent for July lost $2.31 to $113.93 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.75 to WTI, down from a discount of $13.49. Natural gas for June added 34 cents to $8.30. The TSX energy index added 3.86 points to close at 255.14.

Grant Fagerheim's Alberta- and Saskatchewan-focused Whitecap Resources Ltd. (WCP) added 16 cents to $10.57 on 5.15 million shares, mildly pleasing investors with the launch of another buyback program. It can now repurchase up to 58.3 million of its 619 million shares over the next 12 months. Under the prior program, launched in May of last year, Whitecap bought back 33.3 million shares for a total of $264-million.

Management gave the standard reason for the buybacks, namely the belief that "the prevailing share price does not reflect the underlying value of the shares." Presumably it is dissatisfied with the stock's performance relative to competitors. Since the start of the year, Whitecap's share price has risen by 41 per cent, while the TSX energy index has climbed by 56 per cent. The company is hoping that shovelling money at shareholders will help close the gap. In addition to the buybacks, Whitecap's president and chief executive officer, Mr. Fagerheim, has been strongly hinting at a potential dividend increase in the third quarter. (The current dividend is three cents a month, for a yield of 3.4 per cent.)

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