The close: Stay in May
Friday, May 30, 2008
If you sold in May and went away, following one of the oldest investment strategies in the playbook, you missed out on reasonable gains this time.
Canada's benchmark index, the S[amp]amp;P/TSX composite index, rose 5.9 per cent during the month, for an annualized return of more than 70 per cent. More specifically, energy stocks rose 10.9 per cent, information technology stocks (mostly Research In Motion Ltd.) rose 9.4 per cent and materials stocks rose 7.5 per cent.
The S+P 500 did not fare as well, but it still paid to be invested in May. It rose 1.1 per cent in May, for an annualized return of more than 15 per cent. There, information technology led the way, rising 5.6 per cent, materials rose 4.8 per cent and telecom services rose 3.7 per cent.
On Friday, the last day of the month for stock market trading, the S[amp]amp;P/TSX composite index closed at 14,714.73, up 137.56 points or 0.9 per cent, largely because of energy stocks. Despite the fact that crude oil, for once, hugged its starting position, Canadian Natural Resources Ltd. rose 2.2 per cent and Suncor Energy Inc. rose 1.7 per cent.
Toronto-Dominion Bank, among the big banks the least affected by mortgage-related writedowns, rose 2.8 per cent. Bombardier Inc. rose 2 per cent, edging toward a multi-year high of $8. BCE Inc. crossed the $35 threshold, as investors grow more confident that a takeover deal of some sort is still going to happen. And Barrick Gold Corp. rose 3.3 per cent.
The Dow Jones industrial average closed at 12,638.32, down 7.9 points or less than 0.1 per cent. There, American International Group Inc. rose 1.9 per cent and United Technologies Corp. rose 1.2 per cent. Bank of America fell 1.7 per cent and General Motors Corp. fell 1.6 per cent.
The S+P 500 closed at 1400.38, up 2.12 points or 0.2 per cent. Dell Inc. was among the big movers here, rising 5.7 per cent after it reported strong first quarter results on Thursday. As well, Monsanto Co., a leading agriculture company, rose 2.9 per cent.
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© Copyright The Globe and Mail
Friday, May 30, 2008
Alberta's oil sands Next For Ivanhoe Energy
Friedland changes tack with oil sands entrance
NORVAL SCOTT
Thursday, May 29, 2008
CALGARY — The title of “Canada's nickel prince” wasn't enough for Robert Friedland. Now, he's looking to be an oil baron.
Mr. Friedland rose to prominence when his former firm, Diamond Fields Resources, made a huge discovery of nickel at Voisey's Bay in Newfoundland in 1993.
Diamond Fields was ultimately sold to Inco Ltd. for $4.3-billion, a sale that gave Mr. Friedland legendary status among Canada's miners and helped make him a billionaire.
Now, Mr. Friedland, a successful promoter of long-shot mining projects with a knack for attracting investors to remote regions or complex plays, is looking to make a new underground fortune in Alberta's oil sands, the tarry mix of sand and silt that holds huge reserves of crude.
The bituminous nature and deep location of those resources means the oil is hugely expensive and difficult to extract, placing the region off limits to all but the world's largest energy companies.
Ivanhoe Energy Inc., the Calgary-based company of which Mr. Friedland is chief executive, believes it has a solution that has escaped others.
It has developed an upgrading technology that it says improves the quality of the bitumen on site instead of at dedicated plants, dramatically reducing the cost of both producing and transporting oil sands crude and making it more economically feasible for smaller players to get involved.
Now, Ivanhoe plans to put its technology to the test. The junior company, which has a market capitalization of around $650-million, said Thursday that it will buy three oil sands leases from Talisman Energy Inc. for a total of $105-million, including only $30-million in cash up front. Talisman, which has long shunned any opportunity to become an oil sands player and has had the leases on the market for two years, has the option to buy back into the leases as a minority partner.
On one of the leases, Ivanhoe will build a small, technically advanced project – producing between 30,000 and 50,000 barrels a day – that will upgrade crude more cheaply and use far less natural gas or diluent than other projects, the company said. The project is expected to cost somewhere between $1-billion and $2-billion, depending on its size.
“We couldn't be more thrilled. [This deal means] we're in charge of our own destiny,” said Ian Barnett, Ivanhoe executive vice-president of finance. “We can now [build a project] on a much, much smaller scale.”
The oil sands, putting Canada on the map for both their ambitious scale and the controversy surrounding their environmental impact, seem a good fit for Mr. Friedland.
A larger-than-life figure, his big ambitions have attracted a healthy dose of controversy. He once fought a four-year legal battle with U.S. governments over pollution at a Colorado mine site before reaching a settlement in which he did not acknowledge any personal liability and the governments acknowledged no one was solely responsible for the environmental problems.
Mr. Friedland has proved many critics wrong. A copper and gold project in Mongolia looked like an uphill battle until Rio Tinto agreed to buy a 9.95-per-cent stake in the company developing the mine, Ivanhoe Mines Ltd., for $345-million in 2006. Rio Tinto has the option to raise its stake in the project to 47 per cent by investing $2.3-billion (U.S.) in the Friedland company.
Ivanhoe's heavy-oil technology, dubbed HTL, runs bitumen over a circulating bed of very hot sand, upgrading its quality by burning off the heaviest, least useful part of the barrel, leaving lighter crude in its place.
That's a potential step change in the oil sands, where that processing usually takes place in upgraders that cost billions to build. Downscaling that process to smaller projects, without vast expense, fills a gap in the market, said Chris Feltin of Tristone Capital.
“These projects aren't big enough on their own to justify their own upgrader, so this fits a niche opportunity and has big cost advantages,” he said, estimating HTL crude could cost $15 less per barrel to produce than oil extracted with steam-assisted methods.
Beyond Ivanhoe Energy and the oil sands, Mr. Friedland also runs Ivanhoe Mines, a $3.4-billion Toronto Stock Exchange-listed company. He was travelling Thursday and wasn't available for comment.
As befits Mr. Friedland's reputation as a player with a global eye, Ivanhoe Energy has also recently created subsidiaries targeting HTL opportunities in Latin America, China, the Middle East and North Africa as it tries to lever its technology into opportunities in those regions.
Those subsidiaries, which will aim to be self financing, will concentrate on seeking agreements with state-owned companies, said Ed Veith, Ivanhoe executive vice-president of upstream.
With files from reporter David Ebner in Calgary
Buy TLM Today
Thu, May 29, 20081:24 PM New Analyst Reports for CASTILLIAN RESOURCES CORP, ROMARCO MINERALS INC, TALISMAN ENERGY, and FORBES ENERGY SERVICES LTD - Marketwire
Tue, May 20, 20085:12 PM
Wed, Apr 30, 200811:47 AM
5:01 AM Talisman Energy Reports $1.2 Billion in Cash Flow Solid Operational and Financial Results - CCN Matthews 5:00 AM Talisman Energy Reports $1.2 Billion in Cash Flow Solid Operational and Financial Results - Marketwire
Fri, Apr 25, 200810:58 AM
Marketwire
Mon, Apr 14, 20088:02 AM Talisman Energy Inc. Conference Call - CCN Matthews
Tumbling oil sends TSX lower but bank stocks limit losses TheStar.com - Business - Tumbling oil sends TSX lower but bank stocks limit losses
Tumbling oil sends TSX lower but bank stocks limit losses TheStar.com - Business - Tumbling oil sends TSX lower but bank stocks limit losses May 30, 2008
Sliding oil prices sent the Toronto stock market lower yesterday, but losses were moderated by gains in the financial sector even as more big banks released earnings showing much poorer performance than a year earlier.
Toronto's S&P/TSX composite index fell 111.45 points, or 0.76 per cent, to 14,577.17. The TSX Venture Exchange was down 19.65 points to 2,628.6 while the Canadian dollar was ahead 0.08 of a cent (U.S.) to 101.1 cents as Statistics Canada reported that higher commodity prices helped boost the current account surplus to $5.6 billion in the first quarter, up from $3.96 billion a year ago.
N.Y. stocks advance
Lower oil prices also helped send New York markets higher, as did a government report that the economy grew at a faster pace than had been estimated. The Dow Jones industrial average rose 52.19 points to 12,646.22. The Nasdaq composite index gained 21.62 points to 2,508.32 and the S&P 500 index advanced 7.42 points to 1,398.26.
Financials lend support
After a shaky start, the TSX financial sector provided support, rising 1.2 per cent with nearly all banks in the group ahead despite more writedowns connected with U.S. mortgages – with one notable exception.
CIBC fell $1.39 (Canadian) to $69.46 after a second-quarter net loss of $1.11 billion, down from year-ago net income of $807 million. The quarter included a loss of $2.48 billion on writedowns of structured credit.
Royal Bank of Canada said its second-quarter net income came in at $928 million, down by 27 per cent from a year ago, impacted by higher provisions for credit losses in its U.S. banking business. RBC shares were ahead $1.07 to $50.53.
National Bank of Canada added 68 cents to $53.08 as its second-quarter profit fell 29 per cent as it booked $73 million in losses related to asset-backed commercial paper.
Kate Warne, Canadian market specialist at Edward Jones in St. Louis, Mo., says the generally positive showing in the financial sector showed that "people are getting more comfortable that the writedowns are sort of part of the normal business cycle and it's something you don't worry too much about."
Energy stocks slide
The TSX energy sector moved down 2.8 per cent as oil prices dropped $4 (U.S.) as concerns about global energy demand and strength in the dollar countered a government report showing the biggest decline in U.S. stockpiles since 2004.
U.S. crude settled down $4.41 at $126.62 a barrel. Crude prices have risen more than 42 per cent since early December.
"It's not too surprising you're seeing a lot of volatility with the kind of price increase we have seen over the last few weeks," Warne said.
EnCana Corp. lost $2.46 (Canadian) to $88.41 while Suncor Energy moved down $2 to $66.89.
Gold pulls back
Gold pulled back as the U.S. dollar strengthened on the possibility that the U.S. Federal Reserve will have to increase interest rates to deal with inflation fuelled by high energy prices.
The August bullion contract in New York closed down $23.30 (U.S.) to $881.70 and the TSX gold sector retreated 3.7 per cent with Barrick Gold down $1.57 (Canadian) to $38.77 and Kinross Gold Corp. faded 61 cents to $19.45.
The base metals group pulled back 2.4 per cent as Teck Cominco Ltd. dropped $2.20 to $47.41.
TSX decliners beat advancers 922 to 640 with 233 unchanged as 337 million shares traded worth $6.9 billion.
Tin drops most ever
Tin, used in cans and for soldering, fell the most ever on the London Metal Exchange as investors and analysts judged the metal's jump to an all-time high this month was excessive.
Zinc fell to its lowest in more than two years.
"It's just the case of the market getting too far ahead of itself," said Neil Buxton, managing director of GFMS Metals Consulting.
Tin for delivery in three months closed 11 per cent lower at $21,050 (U.S.) a tonne after slumping as much as 13 per cent, or $3,000.
From the Star's wire services
Sliding oil prices sent the Toronto stock market lower yesterday, but losses were moderated by gains in the financial sector even as more big banks released earnings showing much poorer performance than a year earlier.
Toronto's S&P/TSX composite index fell 111.45 points, or 0.76 per cent, to 14,577.17. The TSX Venture Exchange was down 19.65 points to 2,628.6 while the Canadian dollar was ahead 0.08 of a cent (U.S.) to 101.1 cents as Statistics Canada reported that higher commodity prices helped boost the current account surplus to $5.6 billion in the first quarter, up from $3.96 billion a year ago.
N.Y. stocks advance
Lower oil prices also helped send New York markets higher, as did a government report that the economy grew at a faster pace than had been estimated. The Dow Jones industrial average rose 52.19 points to 12,646.22. The Nasdaq composite index gained 21.62 points to 2,508.32 and the S&P 500 index advanced 7.42 points to 1,398.26.
Financials lend support
After a shaky start, the TSX financial sector provided support, rising 1.2 per cent with nearly all banks in the group ahead despite more writedowns connected with U.S. mortgages – with one notable exception.
CIBC fell $1.39 (Canadian) to $69.46 after a second-quarter net loss of $1.11 billion, down from year-ago net income of $807 million. The quarter included a loss of $2.48 billion on writedowns of structured credit.
Royal Bank of Canada said its second-quarter net income came in at $928 million, down by 27 per cent from a year ago, impacted by higher provisions for credit losses in its U.S. banking business. RBC shares were ahead $1.07 to $50.53.
National Bank of Canada added 68 cents to $53.08 as its second-quarter profit fell 29 per cent as it booked $73 million in losses related to asset-backed commercial paper.
Kate Warne, Canadian market specialist at Edward Jones in St. Louis, Mo., says the generally positive showing in the financial sector showed that "people are getting more comfortable that the writedowns are sort of part of the normal business cycle and it's something you don't worry too much about."
Energy stocks slide
The TSX energy sector moved down 2.8 per cent as oil prices dropped $4 (U.S.) as concerns about global energy demand and strength in the dollar countered a government report showing the biggest decline in U.S. stockpiles since 2004.
U.S. crude settled down $4.41 at $126.62 a barrel. Crude prices have risen more than 42 per cent since early December.
"It's not too surprising you're seeing a lot of volatility with the kind of price increase we have seen over the last few weeks," Warne said.
EnCana Corp. lost $2.46 (Canadian) to $88.41 while Suncor Energy moved down $2 to $66.89.
Gold pulls back
Gold pulled back as the U.S. dollar strengthened on the possibility that the U.S. Federal Reserve will have to increase interest rates to deal with inflation fuelled by high energy prices.
The August bullion contract in New York closed down $23.30 (U.S.) to $881.70 and the TSX gold sector retreated 3.7 per cent with Barrick Gold down $1.57 (Canadian) to $38.77 and Kinross Gold Corp. faded 61 cents to $19.45.
The base metals group pulled back 2.4 per cent as Teck Cominco Ltd. dropped $2.20 to $47.41.
TSX decliners beat advancers 922 to 640 with 233 unchanged as 337 million shares traded worth $6.9 billion.
Tin drops most ever
Tin, used in cans and for soldering, fell the most ever on the London Metal Exchange as investors and analysts judged the metal's jump to an all-time high this month was excessive.
Zinc fell to its lowest in more than two years.
"It's just the case of the market getting too far ahead of itself," said Neil Buxton, managing director of GFMS Metals Consulting.
Tin for delivery in three months closed 11 per cent lower at $21,050 (U.S.) a tonne after slumping as much as 13 per cent, or $3,000.
From the Star's wire services
Thursday, May 29, 2008
Ivanhoe Energy to buy Talisman's Athabasca oil interest
Ivanhoe Energy to buy Talisman's Athabasca oil interest
2008-05-29 08:56 ET - News Release
See News Release (C-IE) Ivanhoe Energy Inc
Mr. Robert Friedland of Ivanhoe reports
Ivanhoe Energy Inc. has signed a preliminary agreement with Talisman Energy Canada to acquire all of Talisman's interests in three leases located in the heart of the Athabasca oil sands region in the province of Alberta, Canada. Talisman Energy Canada is an affiliate of Talisman Energy Inc.
The total purchase price is $105-million, of which $30-million is payable at closing. The transaction will see the first commercial application of Ivanhoe Energy's proprietary HTL heavy-oil upgrading technology in a major, integrated heavy-oil project.
Based on the most recent evaluations of the Talisman leases conducted by Sproule Associates Ltd., independent reservoir engineers, two of the three leases are estimated to contain, on a best-estimate basis, approximately 294 million barrels of contingent bitumen resources (with low and high estimates of approximately 216 million and 394 million barrels, respectively), out of approximately 752 million barrels of discovered petroleum initially in place.
The proposed home for Ivanhoe Energy's initial, integrated HTL heavy-oil project will be lease 10, near Fort McMurray. Based on estimates by Sproule of contingent bitumen resources, lease 10 -- the principal block being acquired -- would be capable of producing between 30,000 barrels and 50,000 barrels of oil per day.
Talisman will retain back-in rights of up to 20 per cent in all of the acquired leases for a period of three years. During this period, Talisman will also have the right of first offer to acquire any participation interests in heavy oil projects in Alberta that Ivanhoe wishes to sell, excluding the acquired leases, on mutually agreeable terms. In addition, in order to allow Talisman to effectively monitor the commercial effectiveness of Ivanhoe's HTL technology, Ivanhoe and Talisman will sign an HTL data monitoring agreement.
"We now have achieved our initial objective," said Robert Friedland. "We are anchoring the rollout of our HTL heavy-oil upgrading process with a first-class, high-quality resource asset in the centre of the Athabasca oil sands region. We will now proceed full speed ahead with preparations for an integrated HTL heavy oil project on lease 10, while at the same time progressing discussions relating to additional heavy oil opportunities in Canada and internationally."
Lease 10 to be site for Ivanhoe's first HTL integrated heavy-oil project
Ivanhoe Energy plans to establish its first commercial HTL heavy-oil project on the lease 10 block, the principal lease to be acquired from Talisman.
Lease 10 is a 6,880-acre contiguous block located approximately 10 miles (16 kilometres) northeast of Fort McMurray, immediately south of Suncor's operating Steepbank and Millennium projects. The block also adjoins leases held by ExxonMobil, Laricina Energy and E-T Energy. Talisman has a 100-per-cent working interest in lease 10.
Lease 10 has a relatively high level of delineation (four wells per section). It is believed to be a high-quality reservoir and an excellent candidate for thermal recovery production using the SAGD (steam-assisted gravity drainage) process. The lease 10 reservoir characteristics are believed by Ivanhoe to be similar to those at Petro-Canada's 30,000-barrel-per-day MacKay River project, nearby across the Athabasca River. MacKay River is acknowledged to be one of the most successful and longest-running SAGD projects in the Athabasca oil sands.
Ivanhoe's HTL plant on lease 10 is projected to ultimately be capable of operating at production rates of at least 30,000 barrels per day for approximately 25 years. Ivanhoe intends to integrate established SAGD thermal recovery techniques with its patented HTL upgrading process, producing and marketing a light, synthetic sour crude. Once this acquisition has closed, Ivanhoe will continue the lease 10 delineation program in preparation for the submission of permits for an integrated HTL project. In general, thermal oil sands projects, including SAGD projects, require a period of initial development, including delineation, permitting and field development, which is followed by relatively stable operations for many years. Ivanhoe will provide guidance on expectations regarding development timelines, as appropriate, at a future date. Lease 50 is a second potential HTL site
Lease 50, another lease to be acquired from Talisman, covers a 21,760-gross-acre block located approximately 12 miles (19 kilometres) southeast of Fort McMurray. The block is bordered by Imperial Oil (a subsidiary of ExxonMobil) on three sides and also is adjacent to leases owned by Opti/Nexen and Canadian Natural Resources (CNRL). Talisman has a 75-per-cent working interest in lease 50, which is subject to a right of first refusal in favour of the holder of the remaining 25-per-cent working interest. Although less delineated than lease 10, based on drilling to date, Ivanhoe believes that lease 50 has the potential to host an additional integrated HTL heavy-oil project. The total plant size required to develop and produce the low, best and high estimates of the contingent resources assigned to lease 50 has previously been estimated to be 10,000 barrels of oil per day, 15,000 barrels of oil per day and 25,000 barrels of oil per day, respectively.
Benefits of HTL integration
HTL is a field-located upgrading process that converts heavy oil to a transportable, partially upgraded synthetic crude oil and converts the upgrading byproducts to on-site energy. The process frees the heavy oil producer from the need to purchase diluent for transport, significantly eliminates the need to purchase natural gas to steam the reservoir, and allows the producer to capture the majority of the heavy-oil-light-oil value differential. The net result is enhanced rates of return and reduced earnings volatility. Furthermore, the HTL process is technically and economically scalable down to as low as 10,000 to 30,000 barrels of oil per day, allowing for vertical integration of smaller heavy oil assets in Canada and internationally.
Transaction highlights
A binding preliminary agreement between Ivanhoe Energy and Talisman outlining the key transaction terms was entered into on May 29, 2008. The transaction, expected to close within 45 days, is subject to certain conditions, including completion of definitive transaction documentation and regulatory approval, including approval of the Toronto Stock Exchange.
Purchase details
Ivanhoe will purchase all of Talisman's interests in leases 10, 50 and 6. The total purchase price for the three leases is $105-million, allocated as follows:
$30-million cash, due upon closing;
A $20-million note, with interest at prime plus 2 per cent, to be repaid on or before Dec. 31, 2008;
A $40-million, three-year convertible note, with interest at prime plus 2 per cent with principal convertible at $3.13, which represents a 25-per-cent premium to Ivanhoe Energy's share price based on the volume-adjusted, weighted average closing price for the 10 business days prior to the signing of the preliminary agreement. If the note were fully converted, 12,779,552 common shares of Ivanhoe Energy would be issued to Talisman, representing approximately 4.95 per cent of the issued and outstanding shares of Ivanhoe Energy as of today's date after giving effect to the conversion;
$15-million cash on Ivanhoe Energy receiving requisite government and other approvals to develop the northern border of lease 10, which is subject to a mineral surface lease (MSL) held by Suncor.
Ivanhoe's obligations under the notes and the contingent payment will be secured. Acquisition of lease 50 is subject to the remaining working-interestholder not exercising its right of first refusal in respect of lease 50, in which case the purchase price would be adjusted accordingly. Ivanhoe intends to finance the $30-million initial payment as well as future payments with funds from a combination of strategic investors and/or traditional debt and equity markets, either at the Ivanhoe Energy level or project levels. Talisman will retain back-in rights of up to 20 per cent in all of the acquired leases for a period of three years. During this period, Talisman will also have the right of first offer to acquire any participation interests in heavy oil projects in Alberta that Ivanhoe wishes to sell, excluding the acquired leases, on mutually agreeable terms. In addition, in order to allow Talisman to effectively monitor the commercial effectiveness of Ivanhoe's HTL technology, Ivanhoe and Talisman will sign an HTL data monitoring agreement.
Lease details and resource estimates
Ivanhoe Energy has agreed to acquire the following leases:
A 100-per-cent working interest in lease 10, a 6,880-acre oil sands lease located approximately 10 miles (16 kilometres) northeast of Fort McMurray and immediately south of Suncor's operating Steepbank and Millennium projects;
A 75-per-cent working interest in lease 50, a 21,760-gross-acre oil sands lease located approximately 12 miles (19 kilometres) southeast of Fort McMurray, adjacent to leases owned by Opti/Nexen, Imperial Oil and CNRL;
A 100-per-cent working interest in lease 6, a small, 680-acre block one mile (1.6 kilometres) south of lease 10.
Based on the most recent evaluations conducted by Sproule, lease 10 and lease 50 together are estimated to contain, on a best-estimate basis, approximately 294 million barrels of contingent bitumen resources (with low and high estimates of approximately 216 million and 394 million barrels, respectively). All such resource estimates have been classified as "contingent resources." Lease 6 has not been independently evaluated. The evaluation of lease 10 has an effective date of Aug. 31, 2007, while lease 50 was evaluated as of July 31, 2006. The same reports estimate the discovered petroleum initially in place (which includes the contingent resource volumes) for lease 10 and lease 50, in total, to be approximately 752 million barrels of bitumen on a best-estimate basis. The portion of discovered petroleum initially in place not currently classified as contingent resources does not represent recoverable volumes.
Lease 10 is more delineated than leases 50 and 6. Accordingly, the estimate of recoverable volumes is anticipated to have a higher degree of certainty. Of the total amount of contingent bitumen resources estimated to be contained in all three leases, Sproule has attributed, on a best-estimate basis, approximately 244 million barrels of contingent bitumen resources to lease 10 (with low and high estimates of approximately 188 million and 313 million barrels, respectively), and approximately 50 million barrels of contingent bitumen resources to lease 50 (with low and high estimates of approximately 27 million and 81 million barrels, respectively).
The lease 10 resource target is considered to be of high-quality McMurray sands, with clean and continuous average net pay of approximately 20 metres and no significant top or bottom water or top gas issues. The average porosity is 34 per cent, average bitumen saturation is 79 per cent, and permeabilities are between one and 10 darcies, all of which are considered excellent reservoir characteristics. The high quality of the asset is expected to provide for favourable projected operating costs, including attractive steam-oil ratios (SOR) using SAGD development techniques.
Based on these contingent resource estimates, Ivanhoe's acquisition price of $105-million represents a price of approximately 36 cents per barrel of contingent bitumen resource measured on a best-estimate basis, with a range of approximately 27 cents per barrel on a high-estimate basis to approximately 49 cents per barrel on a low-estimate basis.
Financial adviser
Tristone Capital Inc. is acting as financial adviser to Ivanhoe for this transaction.
The restructuring is planned to enhance Ivanhoe Energy's pursuit of its central mission to develop heavy-oil assets using its HTL technology.
As part of the reorganization, Ivanhoe Energy is establishing a number of geographically focused, self-financing entities. The parent company Ivanhoe Energy will pursue HTL opportunities in the Athabasca oil sands of Western Canada and will hold and manage the core HTL technology. Two new subsidiaries will be established, one for Latin America, and one for the Middle East and North Africa, complementing Sunwing Energy Ltd., Ivanhoe Energy's existing, wholly owned company for China. Dave Martin will lead the subsidiary for Latin America as chairman and chief executive officer, and Leon Daniel will lead the subsidiary for the Middle East and North Africa as chairman and chief executive officer. Ivanhoe Energy initially will own 100 per cent of each of these subsidiaries, although the percentages would be expected to decline as they develop their respective businesses and raise capital independently.
This structure will allow the development and financing of multiple HTL projects around the world, while minimizing dilution of Ivanhoe Energy's existing shareholders. In addition, the alignment with principal energy-producing regions will facilitate financing from region-specific strategic investors, some of which already have been identified, and also will enhance flexibility in accessing global capital markets.
Building an execution team
Over recent months, Ivanhoe has made significant progress in building its execution teams in preparation for this acquisition. The upstream team consists of a number of Calgary-based, experienced heavy oil engineers and geologists hired from firms such as Petro-Canada and Synenco, complemented by a core team of petroleum engineers and geologists located in Ivanhoe's offices in Bakersfield, Calif., a number of which are expected to move to Calgary, Alta., in the summer of 2008. The Houston-based HTL technology team also has been strengthened. Ivanhoe expects to continue filling key positions as it moves into execution mode.
Conference call
Ivanhoe Energy will host a conference call on Tuesday, June 3, 2008, for investors and analysts at 11 a.m. ET (8 a.m. PT) to discuss the acquisition. This conference call replaces the conference call previously scheduled for Monday, June 2, 2008, as announced in Stockwatch March 17, 2008. The conference call may be accessed by dialling 1-866-540-8136 in Canada and the United States, or 1-416-340-8010 in the Toronto area and internationally. A simultaneous webcast of the conference call will be provided. For those unable to participate in the call, it will be archived for later playback by dialling 1-416-695-5800 and entering the pass code 3261239 followed by the number sign. The archived playback will be available until July 4, 2008.
We seek Safe Harbor.
2008-05-29 08:56 ET - News Release
See News Release (C-IE) Ivanhoe Energy Inc
Mr. Robert Friedland of Ivanhoe reports
Ivanhoe Energy Inc. has signed a preliminary agreement with Talisman Energy Canada to acquire all of Talisman's interests in three leases located in the heart of the Athabasca oil sands region in the province of Alberta, Canada. Talisman Energy Canada is an affiliate of Talisman Energy Inc.
The total purchase price is $105-million, of which $30-million is payable at closing. The transaction will see the first commercial application of Ivanhoe Energy's proprietary HTL heavy-oil upgrading technology in a major, integrated heavy-oil project.
Based on the most recent evaluations of the Talisman leases conducted by Sproule Associates Ltd., independent reservoir engineers, two of the three leases are estimated to contain, on a best-estimate basis, approximately 294 million barrels of contingent bitumen resources (with low and high estimates of approximately 216 million and 394 million barrels, respectively), out of approximately 752 million barrels of discovered petroleum initially in place.
The proposed home for Ivanhoe Energy's initial, integrated HTL heavy-oil project will be lease 10, near Fort McMurray. Based on estimates by Sproule of contingent bitumen resources, lease 10 -- the principal block being acquired -- would be capable of producing between 30,000 barrels and 50,000 barrels of oil per day.
Talisman will retain back-in rights of up to 20 per cent in all of the acquired leases for a period of three years. During this period, Talisman will also have the right of first offer to acquire any participation interests in heavy oil projects in Alberta that Ivanhoe wishes to sell, excluding the acquired leases, on mutually agreeable terms. In addition, in order to allow Talisman to effectively monitor the commercial effectiveness of Ivanhoe's HTL technology, Ivanhoe and Talisman will sign an HTL data monitoring agreement.
"We now have achieved our initial objective," said Robert Friedland. "We are anchoring the rollout of our HTL heavy-oil upgrading process with a first-class, high-quality resource asset in the centre of the Athabasca oil sands region. We will now proceed full speed ahead with preparations for an integrated HTL heavy oil project on lease 10, while at the same time progressing discussions relating to additional heavy oil opportunities in Canada and internationally."
Lease 10 to be site for Ivanhoe's first HTL integrated heavy-oil project
Ivanhoe Energy plans to establish its first commercial HTL heavy-oil project on the lease 10 block, the principal lease to be acquired from Talisman.
Lease 10 is a 6,880-acre contiguous block located approximately 10 miles (16 kilometres) northeast of Fort McMurray, immediately south of Suncor's operating Steepbank and Millennium projects. The block also adjoins leases held by ExxonMobil, Laricina Energy and E-T Energy. Talisman has a 100-per-cent working interest in lease 10.
Lease 10 has a relatively high level of delineation (four wells per section). It is believed to be a high-quality reservoir and an excellent candidate for thermal recovery production using the SAGD (steam-assisted gravity drainage) process. The lease 10 reservoir characteristics are believed by Ivanhoe to be similar to those at Petro-Canada's 30,000-barrel-per-day MacKay River project, nearby across the Athabasca River. MacKay River is acknowledged to be one of the most successful and longest-running SAGD projects in the Athabasca oil sands.
Ivanhoe's HTL plant on lease 10 is projected to ultimately be capable of operating at production rates of at least 30,000 barrels per day for approximately 25 years. Ivanhoe intends to integrate established SAGD thermal recovery techniques with its patented HTL upgrading process, producing and marketing a light, synthetic sour crude. Once this acquisition has closed, Ivanhoe will continue the lease 10 delineation program in preparation for the submission of permits for an integrated HTL project. In general, thermal oil sands projects, including SAGD projects, require a period of initial development, including delineation, permitting and field development, which is followed by relatively stable operations for many years. Ivanhoe will provide guidance on expectations regarding development timelines, as appropriate, at a future date. Lease 50 is a second potential HTL site
Lease 50, another lease to be acquired from Talisman, covers a 21,760-gross-acre block located approximately 12 miles (19 kilometres) southeast of Fort McMurray. The block is bordered by Imperial Oil (a subsidiary of ExxonMobil) on three sides and also is adjacent to leases owned by Opti/Nexen and Canadian Natural Resources (CNRL). Talisman has a 75-per-cent working interest in lease 50, which is subject to a right of first refusal in favour of the holder of the remaining 25-per-cent working interest. Although less delineated than lease 10, based on drilling to date, Ivanhoe believes that lease 50 has the potential to host an additional integrated HTL heavy-oil project. The total plant size required to develop and produce the low, best and high estimates of the contingent resources assigned to lease 50 has previously been estimated to be 10,000 barrels of oil per day, 15,000 barrels of oil per day and 25,000 barrels of oil per day, respectively.
Benefits of HTL integration
HTL is a field-located upgrading process that converts heavy oil to a transportable, partially upgraded synthetic crude oil and converts the upgrading byproducts to on-site energy. The process frees the heavy oil producer from the need to purchase diluent for transport, significantly eliminates the need to purchase natural gas to steam the reservoir, and allows the producer to capture the majority of the heavy-oil-light-oil value differential. The net result is enhanced rates of return and reduced earnings volatility. Furthermore, the HTL process is technically and economically scalable down to as low as 10,000 to 30,000 barrels of oil per day, allowing for vertical integration of smaller heavy oil assets in Canada and internationally.
Transaction highlights
A binding preliminary agreement between Ivanhoe Energy and Talisman outlining the key transaction terms was entered into on May 29, 2008. The transaction, expected to close within 45 days, is subject to certain conditions, including completion of definitive transaction documentation and regulatory approval, including approval of the Toronto Stock Exchange.
Purchase details
Ivanhoe will purchase all of Talisman's interests in leases 10, 50 and 6. The total purchase price for the three leases is $105-million, allocated as follows:
$30-million cash, due upon closing;
A $20-million note, with interest at prime plus 2 per cent, to be repaid on or before Dec. 31, 2008;
A $40-million, three-year convertible note, with interest at prime plus 2 per cent with principal convertible at $3.13, which represents a 25-per-cent premium to Ivanhoe Energy's share price based on the volume-adjusted, weighted average closing price for the 10 business days prior to the signing of the preliminary agreement. If the note were fully converted, 12,779,552 common shares of Ivanhoe Energy would be issued to Talisman, representing approximately 4.95 per cent of the issued and outstanding shares of Ivanhoe Energy as of today's date after giving effect to the conversion;
$15-million cash on Ivanhoe Energy receiving requisite government and other approvals to develop the northern border of lease 10, which is subject to a mineral surface lease (MSL) held by Suncor.
Ivanhoe's obligations under the notes and the contingent payment will be secured. Acquisition of lease 50 is subject to the remaining working-interestholder not exercising its right of first refusal in respect of lease 50, in which case the purchase price would be adjusted accordingly. Ivanhoe intends to finance the $30-million initial payment as well as future payments with funds from a combination of strategic investors and/or traditional debt and equity markets, either at the Ivanhoe Energy level or project levels. Talisman will retain back-in rights of up to 20 per cent in all of the acquired leases for a period of three years. During this period, Talisman will also have the right of first offer to acquire any participation interests in heavy oil projects in Alberta that Ivanhoe wishes to sell, excluding the acquired leases, on mutually agreeable terms. In addition, in order to allow Talisman to effectively monitor the commercial effectiveness of Ivanhoe's HTL technology, Ivanhoe and Talisman will sign an HTL data monitoring agreement.
Lease details and resource estimates
Ivanhoe Energy has agreed to acquire the following leases:
A 100-per-cent working interest in lease 10, a 6,880-acre oil sands lease located approximately 10 miles (16 kilometres) northeast of Fort McMurray and immediately south of Suncor's operating Steepbank and Millennium projects;
A 75-per-cent working interest in lease 50, a 21,760-gross-acre oil sands lease located approximately 12 miles (19 kilometres) southeast of Fort McMurray, adjacent to leases owned by Opti/Nexen, Imperial Oil and CNRL;
A 100-per-cent working interest in lease 6, a small, 680-acre block one mile (1.6 kilometres) south of lease 10.
Based on the most recent evaluations conducted by Sproule, lease 10 and lease 50 together are estimated to contain, on a best-estimate basis, approximately 294 million barrels of contingent bitumen resources (with low and high estimates of approximately 216 million and 394 million barrels, respectively). All such resource estimates have been classified as "contingent resources." Lease 6 has not been independently evaluated. The evaluation of lease 10 has an effective date of Aug. 31, 2007, while lease 50 was evaluated as of July 31, 2006. The same reports estimate the discovered petroleum initially in place (which includes the contingent resource volumes) for lease 10 and lease 50, in total, to be approximately 752 million barrels of bitumen on a best-estimate basis. The portion of discovered petroleum initially in place not currently classified as contingent resources does not represent recoverable volumes.
Lease 10 is more delineated than leases 50 and 6. Accordingly, the estimate of recoverable volumes is anticipated to have a higher degree of certainty. Of the total amount of contingent bitumen resources estimated to be contained in all three leases, Sproule has attributed, on a best-estimate basis, approximately 244 million barrels of contingent bitumen resources to lease 10 (with low and high estimates of approximately 188 million and 313 million barrels, respectively), and approximately 50 million barrels of contingent bitumen resources to lease 50 (with low and high estimates of approximately 27 million and 81 million barrels, respectively).
The lease 10 resource target is considered to be of high-quality McMurray sands, with clean and continuous average net pay of approximately 20 metres and no significant top or bottom water or top gas issues. The average porosity is 34 per cent, average bitumen saturation is 79 per cent, and permeabilities are between one and 10 darcies, all of which are considered excellent reservoir characteristics. The high quality of the asset is expected to provide for favourable projected operating costs, including attractive steam-oil ratios (SOR) using SAGD development techniques.
Based on these contingent resource estimates, Ivanhoe's acquisition price of $105-million represents a price of approximately 36 cents per barrel of contingent bitumen resource measured on a best-estimate basis, with a range of approximately 27 cents per barrel on a high-estimate basis to approximately 49 cents per barrel on a low-estimate basis.
Financial adviser
Tristone Capital Inc. is acting as financial adviser to Ivanhoe for this transaction.
The restructuring is planned to enhance Ivanhoe Energy's pursuit of its central mission to develop heavy-oil assets using its HTL technology.
As part of the reorganization, Ivanhoe Energy is establishing a number of geographically focused, self-financing entities. The parent company Ivanhoe Energy will pursue HTL opportunities in the Athabasca oil sands of Western Canada and will hold and manage the core HTL technology. Two new subsidiaries will be established, one for Latin America, and one for the Middle East and North Africa, complementing Sunwing Energy Ltd., Ivanhoe Energy's existing, wholly owned company for China. Dave Martin will lead the subsidiary for Latin America as chairman and chief executive officer, and Leon Daniel will lead the subsidiary for the Middle East and North Africa as chairman and chief executive officer. Ivanhoe Energy initially will own 100 per cent of each of these subsidiaries, although the percentages would be expected to decline as they develop their respective businesses and raise capital independently.
This structure will allow the development and financing of multiple HTL projects around the world, while minimizing dilution of Ivanhoe Energy's existing shareholders. In addition, the alignment with principal energy-producing regions will facilitate financing from region-specific strategic investors, some of which already have been identified, and also will enhance flexibility in accessing global capital markets.
Building an execution team
Over recent months, Ivanhoe has made significant progress in building its execution teams in preparation for this acquisition. The upstream team consists of a number of Calgary-based, experienced heavy oil engineers and geologists hired from firms such as Petro-Canada and Synenco, complemented by a core team of petroleum engineers and geologists located in Ivanhoe's offices in Bakersfield, Calif., a number of which are expected to move to Calgary, Alta., in the summer of 2008. The Houston-based HTL technology team also has been strengthened. Ivanhoe expects to continue filling key positions as it moves into execution mode.
Conference call
Ivanhoe Energy will host a conference call on Tuesday, June 3, 2008, for investors and analysts at 11 a.m. ET (8 a.m. PT) to discuss the acquisition. This conference call replaces the conference call previously scheduled for Monday, June 2, 2008, as announced in Stockwatch March 17, 2008. The conference call may be accessed by dialling 1-866-540-8136 in Canada and the United States, or 1-416-340-8010 in the Toronto area and internationally. A simultaneous webcast of the conference call will be provided. For those unable to participate in the call, it will be archived for later playback by dialling 1-416-695-5800 and entering the pass code 3261239 followed by the number sign. The archived playback will be available until July 4, 2008.
We seek Safe Harbor.
Wednesday, May 28, 2008
High gas prices all summer
High gas prices all summer: NEB
LAUREN KRUGEL
Wednesday, May 28, 2008
CALGARY — The National Energy Board has some discouraging news for Canadians clinging to hope that gasoline prices might cool off this summer.
Gasoline prices will closely track the global price of its raw product, crude oil, which is expected to average $130 (U.S.) a barrel over the next few months — about double what it was at this time last year, said Christian Rankin, an oil market analyst with the federal agency.
A barrel of crude was worth just shy of $131 a barrel on the New York Mercantile Exchange Wednesday.
“Whatever your outlook on the oil markets, I think we can all agree we are all in very, very new territory here,” Mr. Rankin said.
Analysts predict gasoline prices could average between $1.30 (Canadian) and $1.40 a litre this summer.
This week's pump price survey by Calgary consulting firm MJ Ervin said prices across the country are on average close to $1.33.
The situation could get nastier if there are unforeseen refinery problems, which would draw down inventories and push prices up further, Mr. Rankin said.
“Inventories currently look to be at healthy levels, but the refining sector in Canada is quite tight. If we have any regional upsets, that can cause short-term price spikes while inventories and supplies are found,” he said.
But prices could moderate if demand in the United States and Canada subsides, pushing inventories to more steady levels.
Prices of natural gas, which is used for electricity generation and heating, are also going up, the board said.
A million British thermal units of natural gas is expected to be between $11 (U.S.) and $13 over the summer, after bottoming out to less than $6 during the fall.
On the New York Mercantile Exchange Wednesday, prices were close to $12.
“Winter lasted longer and was closer to normal in terms of temperature than previous mild winters. That resulted in a greater drawdown of storage than in previous years,” said Paul Mortensen, the energy board's technical leader of hydrocarbon resources.
The prices are also being pulled up by crude oil prices and by declines in Canadian production.
Another factor is liquefied natural gas, or LNG, which is made by condensing the gas into a liquid state under ultra-cold temperatures.
LNG makes it possible to ship the commodity around the world via tanker. With demand high in places like Europe and Asia, less LNG has been heading into the North American marketplace.
Last year North America imported 2.6 billion cubic feet of LNG, whereas this summer it's expected to get 1.9 billion, Mr. Mortensen said.
“We do caution that unpredictable events such as extremely hot weather or hurricane activity has the potential to cause prices to move sharply upward for short periods of time,” he said.
There should be more than enough electricity in Canada to meet summer demand, said NEB market analyst Stephane Thivierge.
“However there is always the potential for uncontrolled circumstances to occur that could potentially threaten the supply of generation including extreme weather events and unplanned generation or transmission outages,” he said.
But if natural gas prices peak substantially, it could drive electricity prices up — especially in Alberta and Ontario, which rely on natural-gas fired plants for power.
“These upward pressures will have different effects on different types of consumers,” Mr. Thivierge said.
Residential consumers will see less volatility, because rates are regulated, but industrial consumers could take a hit.
“Since industrial prices are subject to market forces, higher prices could exacerbate the impact of an economic slowdown in some industrial sectors,” he said.
© Copyright The Globe and Mail
LAUREN KRUGEL
Wednesday, May 28, 2008
CALGARY — The National Energy Board has some discouraging news for Canadians clinging to hope that gasoline prices might cool off this summer.
Gasoline prices will closely track the global price of its raw product, crude oil, which is expected to average $130 (U.S.) a barrel over the next few months — about double what it was at this time last year, said Christian Rankin, an oil market analyst with the federal agency.
A barrel of crude was worth just shy of $131 a barrel on the New York Mercantile Exchange Wednesday.
“Whatever your outlook on the oil markets, I think we can all agree we are all in very, very new territory here,” Mr. Rankin said.
Analysts predict gasoline prices could average between $1.30 (Canadian) and $1.40 a litre this summer.
This week's pump price survey by Calgary consulting firm MJ Ervin said prices across the country are on average close to $1.33.
The situation could get nastier if there are unforeseen refinery problems, which would draw down inventories and push prices up further, Mr. Rankin said.
“Inventories currently look to be at healthy levels, but the refining sector in Canada is quite tight. If we have any regional upsets, that can cause short-term price spikes while inventories and supplies are found,” he said.
But prices could moderate if demand in the United States and Canada subsides, pushing inventories to more steady levels.
Prices of natural gas, which is used for electricity generation and heating, are also going up, the board said.
A million British thermal units of natural gas is expected to be between $11 (U.S.) and $13 over the summer, after bottoming out to less than $6 during the fall.
On the New York Mercantile Exchange Wednesday, prices were close to $12.
“Winter lasted longer and was closer to normal in terms of temperature than previous mild winters. That resulted in a greater drawdown of storage than in previous years,” said Paul Mortensen, the energy board's technical leader of hydrocarbon resources.
The prices are also being pulled up by crude oil prices and by declines in Canadian production.
Another factor is liquefied natural gas, or LNG, which is made by condensing the gas into a liquid state under ultra-cold temperatures.
LNG makes it possible to ship the commodity around the world via tanker. With demand high in places like Europe and Asia, less LNG has been heading into the North American marketplace.
Last year North America imported 2.6 billion cubic feet of LNG, whereas this summer it's expected to get 1.9 billion, Mr. Mortensen said.
“We do caution that unpredictable events such as extremely hot weather or hurricane activity has the potential to cause prices to move sharply upward for short periods of time,” he said.
There should be more than enough electricity in Canada to meet summer demand, said NEB market analyst Stephane Thivierge.
“However there is always the potential for uncontrolled circumstances to occur that could potentially threaten the supply of generation including extreme weather events and unplanned generation or transmission outages,” he said.
But if natural gas prices peak substantially, it could drive electricity prices up — especially in Alberta and Ontario, which rely on natural-gas fired plants for power.
“These upward pressures will have different effects on different types of consumers,” Mr. Thivierge said.
Residential consumers will see less volatility, because rates are regulated, but industrial consumers could take a hit.
“Since industrial prices are subject to market forces, higher prices could exacerbate the impact of an economic slowdown in some industrial sectors,” he said.
© Copyright The Globe and Mail
Gasoline, oil to remain high, NEB says
Gasoline, oil to remain high, NEB says
DAVID EBNER
Wednesday, May 28, 2008
CALGARY — The National Energy Board expects oil and natural gas prices to remain high throughout the summer.
And gasoline prices are expected to closely correlate the high price of oil, the national energy regular said in Calgary Wednesday in its summer energy outlook.
The NEB outlook suggests predictions of other analysts for record gasoline prices this summer are likely correct.
Consultancy MJ Erwin and Associates has said regular gas could be $1.40 a litre or more. On Tuesday, MJ Ervin reported the average price of regular gasoline in Canada was $1.33, a record.
According to the NEB, the price of oil will likely bounce around $130 (U.S.) a barrel, about the current level, as strong demand and tight supply continue.
Natural gas is expected to average about $12 per thousand cubic feet, also around the current rate, partly because of higher oil prices and lower supply from Canada.
DAVID EBNER
Wednesday, May 28, 2008
CALGARY — The National Energy Board expects oil and natural gas prices to remain high throughout the summer.
And gasoline prices are expected to closely correlate the high price of oil, the national energy regular said in Calgary Wednesday in its summer energy outlook.
The NEB outlook suggests predictions of other analysts for record gasoline prices this summer are likely correct.
Consultancy MJ Erwin and Associates has said regular gas could be $1.40 a litre or more. On Tuesday, MJ Ervin reported the average price of regular gasoline in Canada was $1.33, a record.
According to the NEB, the price of oil will likely bounce around $130 (U.S.) a barrel, about the current level, as strong demand and tight supply continue.
Natural gas is expected to average about $12 per thousand cubic feet, also around the current rate, partly because of higher oil prices and lower supply from Canada.
Oil Up And Down
See oil rise. See oil fall.Crude oil traded at $126.22 (U.S.) a barrel early on Wednesday, down $2.63 - hardly a bargain but a steep 7 per cent drop from its peak last week, when it crested $135 for the first time ever.
One theory for the retreat is that demand destruction is at work: that is, with peak driving season upon North America, the concern is that drivers will balk at the high fuel costs and stay at home and watch television instead.Of course, lower crude oil prices is terrible news for the commodity heavy Canadian benchmark index, which was walloped on Tuesday. It usually sends the Canadian dollar into a funk as well.
But for U.S. markets, especially stocks that are energy dependent (auto manufacturers and airlines) or rely on a strong consumer (retail stocks), the lower prices are seen as a welcome relief.Futures for the Dow Jones industrial average rose 26 points, to 12,579, about an hour before markets open for trading, suggesting the index will rise at the start of the day. Futures for the S&P 500 rose 4 points, to 1388.In Europe, the U.K.'s FTSE 100 rose 0.6 per cent and Germany's DAX index rose 1.2 per cent in afternoon trading.
In Asia, Japan's Nikkei 225 fell 1.3 per cent in overnight trading.In Canada, investors will be keeping a close eye on Toronto-Dominion Bank, the third of the big banks to report second quarter earnings. As well, Sears Canada Inc. reports its first quarter for fiscal 2009.Copyright 2001 The Globe and Mail
One theory for the retreat is that demand destruction is at work: that is, with peak driving season upon North America, the concern is that drivers will balk at the high fuel costs and stay at home and watch television instead.Of course, lower crude oil prices is terrible news for the commodity heavy Canadian benchmark index, which was walloped on Tuesday. It usually sends the Canadian dollar into a funk as well.
But for U.S. markets, especially stocks that are energy dependent (auto manufacturers and airlines) or rely on a strong consumer (retail stocks), the lower prices are seen as a welcome relief.Futures for the Dow Jones industrial average rose 26 points, to 12,579, about an hour before markets open for trading, suggesting the index will rise at the start of the day. Futures for the S&P 500 rose 4 points, to 1388.In Europe, the U.K.'s FTSE 100 rose 0.6 per cent and Germany's DAX index rose 1.2 per cent in afternoon trading.
In Asia, Japan's Nikkei 225 fell 1.3 per cent in overnight trading.In Canada, investors will be keeping a close eye on Toronto-Dominion Bank, the third of the big banks to report second quarter earnings. As well, Sears Canada Inc. reports its first quarter for fiscal 2009.Copyright 2001 The Globe and Mail
Tuesday, May 27, 2008
Monday, May 26, 2008
Takeover report spurs Talisman
Takeover report spurs Talisman
JEFFREY JONES
Reuters
May 26, 2008 at 4:41 PM EDT
CALGARY — Talisman Energy Inc. shares jumped more than 6 per cent Monday after a Hong Kong newspaper reported CNOOC Ltd, China's No. 3 oil company, was in talks to buy the Canadian firm or some of its assets.
Talisman, Canada's third largest independent oil explorer, jumped $1.51 to $24.70 on the Toronto Stock Exchange following the report in the South China Morning Post, quoting unnamed sources.
It comes a week after Calgary-based Talisman laid out details of an overhaul aimed at concentrating money and efforts on its highest-return assets around the world, a program that could mean up to $2-billion in asset sales.
A Talisman spokeswoman declined to comment on the CNOOC report.
Talisman Energy
Chief executive officer John Manzoni plans to sell operations in the Netherlands, Trinidad and Denmark that produce up to 40,000 barrels of oil equivalent a day.
Talisman, with a stock market value of more than $24-billion, will focus its efforts on assets in Southeast Asia, the North Sea and on unconventional oil and natural gas in North America, Mr. Manzoni said recently.
“I don't know of anything going on but I can't see any reason why CNOOC would not be interested in Talisman. Everybody should be interested in Talisman,” Raymond James analyst Stephen Calderwood said.
After Talisman released its strategic plan last week, Mr. Calderwood raised his six-to 12-month target price by 12 per cent to between $25 and $28 and kept his “outperform” rating on the stock.
He noted that Talisman's previous CEO, Jim Buckee, was resistant to calls from some investors to break the company into smaller firms along geographic lines, citing the prospect of a tax hit.
However, a breakup could still be possible through a cash bid at a premium to the current price, then a reorganization of the assets over a number of years, he wrote last week.
Some analysts also said it could be possible that CNOOC was in talks to acquire assets Talisman has earmarked for sale.
The goal of the company's reorganization is to rebuild credibility with investors who have been disappointed by a series of missed operational and financial targets.
Mr. Manzoni spent much of last week explaining the strategy to investors in New York, Toronto and Calgary.
A big question mark for any oil acquisition by a Chinese state-controlled company would be the reaction of Ottawa, which recently blocked a foreign takeover of MacDonald, Dettwiler and Associates Ltd.'s space robotic and satellite technology business on national security concerns.
In 2005, CNOOC's bid for another big North American oil company, Unocal, was thwarted when U.S. politicians scuttled the deal.
Talisman's Asian operations, seen as major drivers of the company's plans for steady production increases, are located in Indonesia, Malaysia and Vietnam.
In January, CNOOC and Talisman settled a long-running dispute over ownership of the Tangguh liquefied natural gas project in Indonesia, when the Chinese company sold Talisman a 3.06 per cent interest for $212.5-million.
JEFFREY JONES
Reuters
May 26, 2008 at 4:41 PM EDT
CALGARY — Talisman Energy Inc. shares jumped more than 6 per cent Monday after a Hong Kong newspaper reported CNOOC Ltd, China's No. 3 oil company, was in talks to buy the Canadian firm or some of its assets.
Talisman, Canada's third largest independent oil explorer, jumped $1.51 to $24.70 on the Toronto Stock Exchange following the report in the South China Morning Post, quoting unnamed sources.
It comes a week after Calgary-based Talisman laid out details of an overhaul aimed at concentrating money and efforts on its highest-return assets around the world, a program that could mean up to $2-billion in asset sales.
A Talisman spokeswoman declined to comment on the CNOOC report.
Talisman Energy
Chief executive officer John Manzoni plans to sell operations in the Netherlands, Trinidad and Denmark that produce up to 40,000 barrels of oil equivalent a day.
Talisman, with a stock market value of more than $24-billion, will focus its efforts on assets in Southeast Asia, the North Sea and on unconventional oil and natural gas in North America, Mr. Manzoni said recently.
“I don't know of anything going on but I can't see any reason why CNOOC would not be interested in Talisman. Everybody should be interested in Talisman,” Raymond James analyst Stephen Calderwood said.
After Talisman released its strategic plan last week, Mr. Calderwood raised his six-to 12-month target price by 12 per cent to between $25 and $28 and kept his “outperform” rating on the stock.
He noted that Talisman's previous CEO, Jim Buckee, was resistant to calls from some investors to break the company into smaller firms along geographic lines, citing the prospect of a tax hit.
However, a breakup could still be possible through a cash bid at a premium to the current price, then a reorganization of the assets over a number of years, he wrote last week.
Some analysts also said it could be possible that CNOOC was in talks to acquire assets Talisman has earmarked for sale.
The goal of the company's reorganization is to rebuild credibility with investors who have been disappointed by a series of missed operational and financial targets.
Mr. Manzoni spent much of last week explaining the strategy to investors in New York, Toronto and Calgary.
A big question mark for any oil acquisition by a Chinese state-controlled company would be the reaction of Ottawa, which recently blocked a foreign takeover of MacDonald, Dettwiler and Associates Ltd.'s space robotic and satellite technology business on national security concerns.
In 2005, CNOOC's bid for another big North American oil company, Unocal, was thwarted when U.S. politicians scuttled the deal.
Talisman's Asian operations, seen as major drivers of the company's plans for steady production increases, are located in Indonesia, Malaysia and Vietnam.
In January, CNOOC and Talisman settled a long-running dispute over ownership of the Tangguh liquefied natural gas project in Indonesia, when the Chinese company sold Talisman a 3.06 per cent interest for $212.5-million.
If Ottawa does clears the way for takeovers and Talisman is still the cheapest big play in the oil patch, then all sorts of rivals will come calling.
Numbers support Talisman takeover, politics don't
Andrew Willis, today at 2:58 PM EDT
When it comes to a Talisman Energy takeover, the numbers make sense, but the politics don't.
Talisman stock is up Monday on a report out of Hong Kong that has the Canadian company in the sights of CNOOC Ltd., China's third largest oil company. Investment bankers who have worked in the past with CNOOC and other state-controlled Chinese companies say the timing is wrong.
All sorts of foreign companies and funds are interested in Canadian resource plays, but are waiting for greater clarity on federal rules.
Ottawa has appointed a panel to study state ownership of foreign acquirers - it's headed by former BCE chairman Lynton (Red) Wilson and includes energy mogul Murray Edwards - and the group isn't scheduled to table its thoughts until June.No company - state-owned or otherwise - wants to fire a takeover bid into an uncertain regulatory environment.
With a market capitalization of $25-billion, any bid for Talisman is going to attract regulatory scrutiny.
There's no sense in Calgary that Talisman is actively being stalked, though the company has certainly been approached in the past. However, the takeover talk isn't going to go away, as valuations support an acquisition. Talisman shares are changing hands at a substantial discount to rivals.Talisman's weak share prices reflects the fact that the company has disappointed investors by missing production forecasts.
Talisman is also seen as behind the times when it comes to strategy, only announcing this year that it is refocusing on unconventional North American natural gas plays.
Peers such as EnCana made this shift years ago.Talisman now has an enterprise value that is just 5 times its debt-adjusted cash flow - a standard industry measure - according to Blackmont Capital analyst Menno Hulshof. The same EV/DACF multiple at Canadian Natural Resources is 7.9 times, while EnCana is at 7.2 times.
On this and just about every other measure, Talisman is cheap.
The challenge facing Talisman management is to complete asset sales - where CNOOC or other state-owned players could be buyers - and turn around the company before the political winds shift.
If Ottawa does clears the way for takeovers and Talisman is still the cheapest big play in the oil patch, then all sorts of rivals will come calling.
Andrew Willis, today at 2:58 PM EDT
When it comes to a Talisman Energy takeover, the numbers make sense, but the politics don't.
Talisman stock is up Monday on a report out of Hong Kong that has the Canadian company in the sights of CNOOC Ltd., China's third largest oil company. Investment bankers who have worked in the past with CNOOC and other state-controlled Chinese companies say the timing is wrong.
All sorts of foreign companies and funds are interested in Canadian resource plays, but are waiting for greater clarity on federal rules.
Ottawa has appointed a panel to study state ownership of foreign acquirers - it's headed by former BCE chairman Lynton (Red) Wilson and includes energy mogul Murray Edwards - and the group isn't scheduled to table its thoughts until June.No company - state-owned or otherwise - wants to fire a takeover bid into an uncertain regulatory environment.
With a market capitalization of $25-billion, any bid for Talisman is going to attract regulatory scrutiny.
There's no sense in Calgary that Talisman is actively being stalked, though the company has certainly been approached in the past. However, the takeover talk isn't going to go away, as valuations support an acquisition. Talisman shares are changing hands at a substantial discount to rivals.Talisman's weak share prices reflects the fact that the company has disappointed investors by missing production forecasts.
Talisman is also seen as behind the times when it comes to strategy, only announcing this year that it is refocusing on unconventional North American natural gas plays.
Peers such as EnCana made this shift years ago.Talisman now has an enterprise value that is just 5 times its debt-adjusted cash flow - a standard industry measure - according to Blackmont Capital analyst Menno Hulshof. The same EV/DACF multiple at Canadian Natural Resources is 7.9 times, while EnCana is at 7.2 times.
On this and just about every other measure, Talisman is cheap.
The challenge facing Talisman management is to complete asset sales - where CNOOC or other state-owned players could be buyers - and turn around the company before the political winds shift.
If Ottawa does clears the way for takeovers and Talisman is still the cheapest big play in the oil patch, then all sorts of rivals will come calling.
Cnooc, PetroChina Eye Talisman Energy, Santos Stakes - Report
Cnooc, PetroChina Eye Talisman Energy, Santos Stakes - Report
20:38 EDT Sunday, May 25, 2008
HONG KONG (Dow Jones)--Cnooc Ltd. (CEO), China's largest listed offshore oil and gas producer by output, held talks with Canada-based Talisman Energy Inc. ( TLM), the South China Morning Post reported Monday, citing unnamed sources.
The talks could lead to Talisman asset sales or a complete takeover of the oil and gas exploration and production company by Cnooc, the report said.
Separately, PetroChina Co. (PTR), China's largest listed oil company by output, is considering taking a stake in Australian oil and gas exploration and production company Santos Ltd. (STO.AU).
PetroChina is also interested in taking a stake in or acquiring the world's fifth-largest oil and gas company, Repsol YPF S.A. (REP), which is considering restarting the sale of its Latin American assets that could be valued at US$10 billion, the paper said, adding that spokesmen at the four companies declined to comment.
Newspaper Web site: http://www.scmp.com/
-By Hong Kong Bureau, Dow Jones Newswires; 852-2802-7002; djnews.hongkong@ dowjones.com (END) Dow Jones Newswires
05-25-08 2038ET
Copyright (c) 2008 Dow Jones & Company, Inc.
Friday, May 23, 2008
Thursday, May 22, 2008
QEC Buy And Sells - Brokerages
First Energy Bought 25% Of The Shares Today-
If they didn't I would imagine the stock price would be sub 4.39
What will Friday bring???
T 2008-05-22 12:00:08 4.50 -0.20 100,000 27 Dundee 49 Evergreen K
T 2008-05-22 10:51:53 4.60 -0.10 36,800 27 Dundee 7 TD Sec K
T 2008-05-22 10:39:32 4.65 -0.05 15,700 27 Dundee 1 Anonymous K T 2008-05-22 10:39:29 4.65 -0.05 15,000 27 Dundee 79 CIBC K
T 2008-05-22 10:34:43 4.70 0.00 50,000 10 FirstEnergy 1 Anonymous K
T 2008-05-22 10:28:02 4.70 0.00 2,600 27 Dundee 27 Dundee K T 2008-05-22 10:28:02 4.70 0.00 13,300 27 Dundee 1 Anonymous K T 2008-05-22 10:27:57 4.70 0.00 2,000 27 Dundee 2 RBC K T 2008-05-22 10:27:49 4.70 0.00 3,100 27 Dundee 2 RBC K T 2008-05-22 10:27:24 4.70 0.00 20,000 27 Dundee 14 ITG K
T 2008-05-22 10:51:53 4.60 -0.10 36,800 27 Dundee 7 TD Sec K
T 2008-05-22 10:39:32 4.65 -0.05 15,700 27 Dundee 1 Anonymous K T 2008-05-22 10:39:29 4.65 -0.05 15,000 27 Dundee 79 CIBC K
T 2008-05-22 10:34:43 4.70 0.00 50,000 10 FirstEnergy 1 Anonymous K
T 2008-05-22 10:28:02 4.70 0.00 2,600 27 Dundee 27 Dundee K T 2008-05-22 10:28:02 4.70 0.00 13,300 27 Dundee 1 Anonymous K T 2008-05-22 10:27:57 4.70 0.00 2,000 27 Dundee 2 RBC K T 2008-05-22 10:27:49 4.70 0.00 3,100 27 Dundee 2 RBC K T 2008-05-22 10:27:24 4.70 0.00 20,000 27 Dundee 14 ITG K
By popular demand:I was walking by a mental hospital the other day...
and all I could hear was the sound of patients yelling
13,13,13
the fence was too high to see over,
But I saw a little space between the boards
and I looked through to see what was going on
13,13,13
the fence was too high to see over,
But I saw a little space between the boards
and I looked through to see what was going on
some Jerk poked me in the eye with a stick
then all I could here was "14... 14... 14..."
Just thought I'd be the one to warn you 1st
Wednesday, May 21, 2008
4.70 is the equity book building price
Questerre Prices Equity Offering
14:26 EDT Wednesday, May 21, 2008
CALGARY, ALBERTA--(Marketwire - May 21, 2008) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSLO:QEC) reported it has priced its previously announced equity offering at $4.70 per Common Share.
The Canadian tranche will consist of 7,500,000 shares and will include an over allotment option of 1,125,000 Common Shares. The over allotment option is exercisable within 30 days from the closing of the issue. The placement is subject to receipt of regulatory approval.
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
FOR FURTHER INFORMATION PLEASE CONTACT:Questerre Energy Corporation
Jason D'Silva
VP Finance
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
14:26 EDT Wednesday, May 21, 2008
CALGARY, ALBERTA--(Marketwire - May 21, 2008) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSLO:QEC) reported it has priced its previously announced equity offering at $4.70 per Common Share.
The Canadian tranche will consist of 7,500,000 shares and will include an over allotment option of 1,125,000 Common Shares. The over allotment option is exercisable within 30 days from the closing of the issue. The placement is subject to receipt of regulatory approval.
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
FOR FURTHER INFORMATION PLEASE CONTACT:Questerre Energy Corporation
Jason D'Silva
VP Finance
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
Word about the financing :
It sold out in 45 minutes!!!!!!!
Claim is that : "This is going higher very soon!"
Questerre Energy Corporation (“Questerre” or the “Company”).
Offering: 7,500,000 Common Shares (the “Shares”).
Issue Size: $35,250,000.
Issue Price: $4.70 per Share.
Drawdown: $4.5825 per Share.
Allocation System Symbol: QEC
Over-Allotment
Option:
Use of Proceeds: The net proceeds of the Shares will be used for the acceleration of the capital program
in Quebec and for general corporate purposes.
Eligibility: The Shares will be eligible under all usual statutes including RRSPs, DPSPs, RESPs,
and RIFs.
Listing: The Shares trade on the Toronto Stock Exchange under the symbol “QEC”.
Form of Offering: Public offering in all provinces of Canada by way of short form prospectus and on
a private placement basis into the United States pursuant to the registration
exemptions provided by Rule 144a and/or Regulation D of the U.S. Securities Act
of 1933.
Form of
Underwriting:
Bought deal, subject to syndication, and an underwriting agreement containing
“disaster out”, “regulatory out”, and “material adverse change out” clauses
running to Closing.
Underwriting Fee: 5%
Closing Date: June 10, 2008
Book Building
About Book Building Book Building is basically a capital issuance process used in Initial Public Offer (IPO) which aids price and demand discovery. It is a process used for marketing a public offer of equity shares of a company. It is a mechanism where, during the period for which the book for the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The process aims at tapping both wholesale and retail investors. The offer/issue price is then determined after the bid closing date based on certain evaluation criteria.
The Process:
The Issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'.
The Issuer specifies the number of securities to be issued and the price band for orders.
The Issuer also appoints syndicate members with whom orders can be placed by the investors.
Investors place their order with a syndicate member who inputs the orders into the 'electronic book'. This process is called 'bidding' and is similar to open auction.
A Book should remain open for a minimum of 5 days.
Bids cannot be entered less than the floor price.
Bids can be revised by the bidder before the issue closes.
On the close of the book building period the 'book runner evaluates the bids on the basis of the evaluation criteria which may include -
Price Aggression
Investor quality
Earliness of bids, etc.
The book runner and the company conclude the final price at which it is willing to issue the stock and allocation of securities.
Generally, the number of shares are fixed, the issue size gets frozen based on the price per share discovered through the book building process.
Allocation of securities is made to the successful bidders.
Book Building is a good concept and represents a capital market which is in the process of maturing.
Initial Public Offerings
Corporates may raise capital in the primary market by way of an initial public offer, rights issue or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. This Initial Public Offering can be made through the fixed price method, book building method or a combination of both. In case the issuer chooses to issue securities through the book building route then as per SEBI guidelines, an issuer company can issue securities in the following manner:
100% of the net offer to the public through the book building route.
75% of the net offer to the public through the book building process and 25% through the fixed price portion.
Under the 90% scheme, this percentage would be 90 and 10 respectively.
It sold out in 45 minutes!!!!!!!
Claim is that : "This is going higher very soon!"
Questerre Energy Corporation (“Questerre” or the “Company”).
Offering: 7,500,000 Common Shares (the “Shares”).
Issue Size: $35,250,000.
Issue Price: $4.70 per Share.
Drawdown: $4.5825 per Share.
Allocation System Symbol: QEC
Over-Allotment
Option:
Use of Proceeds: The net proceeds of the Shares will be used for the acceleration of the capital program
in Quebec and for general corporate purposes.
Eligibility: The Shares will be eligible under all usual statutes including RRSPs, DPSPs, RESPs,
and RIFs.
Listing: The Shares trade on the Toronto Stock Exchange under the symbol “QEC”.
Form of Offering: Public offering in all provinces of Canada by way of short form prospectus and on
a private placement basis into the United States pursuant to the registration
exemptions provided by Rule 144a and/or Regulation D of the U.S. Securities Act
of 1933.
Form of
Underwriting:
Bought deal, subject to syndication, and an underwriting agreement containing
“disaster out”, “regulatory out”, and “material adverse change out” clauses
running to Closing.
Underwriting Fee: 5%
Closing Date: June 10, 2008
Book Building
About Book Building Book Building is basically a capital issuance process used in Initial Public Offer (IPO) which aids price and demand discovery. It is a process used for marketing a public offer of equity shares of a company. It is a mechanism where, during the period for which the book for the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The process aims at tapping both wholesale and retail investors. The offer/issue price is then determined after the bid closing date based on certain evaluation criteria.
The Process:
The Issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'.
The Issuer specifies the number of securities to be issued and the price band for orders.
The Issuer also appoints syndicate members with whom orders can be placed by the investors.
Investors place their order with a syndicate member who inputs the orders into the 'electronic book'. This process is called 'bidding' and is similar to open auction.
A Book should remain open for a minimum of 5 days.
Bids cannot be entered less than the floor price.
Bids can be revised by the bidder before the issue closes.
On the close of the book building period the 'book runner evaluates the bids on the basis of the evaluation criteria which may include -
Price Aggression
Investor quality
Earliness of bids, etc.
The book runner and the company conclude the final price at which it is willing to issue the stock and allocation of securities.
Generally, the number of shares are fixed, the issue size gets frozen based on the price per share discovered through the book building process.
Allocation of securities is made to the successful bidders.
Book Building is a good concept and represents a capital market which is in the process of maturing.
Initial Public Offerings
Corporates may raise capital in the primary market by way of an initial public offer, rights issue or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. This Initial Public Offering can be made through the fixed price method, book building method or a combination of both. In case the issuer chooses to issue securities through the book building route then as per SEBI guidelines, an issuer company can issue securities in the following manner:
100% of the net offer to the public through the book building route.
75% of the net offer to the public through the book building process and 25% through the fixed price portion.
Under the 90% scheme, this percentage would be 90 and 10 respectively.
Questerre to Participate in Major Pilot Project in the Lowlands
Questerre to Participate in Major Pilot Project in the Lowlands
02:15 EDT Wednesday, May 21, 2008
CALGARY, ALBERTA--(Marketwire - May 21, 2008) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) announced that it plans to participate with its partner Talisman Energy Canada ("Talisman") in a major pilot program to assess the commerciality of unconventional gas in the St. Lawrence Lowlands, Quebec.
In addition to the previously announced commitment to drill three vertical test wells, the pilot program will include vertical and several horizontal wells. Questerre expects the program to be carried out in 2008 and 2009 with a budget in excess of $100 million. For its acreage in the play fairway, Questerre will budget, on a net basis, between $25 million and $30 million of which $3 million to $5 million is expected to be spent in 2008 with the balance in 2009. These amounts do not include anticipated spending on the Yamaska licenses.
The pilot project to assess commerciality will focus on the siltstone/shale sequences of both the Utica and Lorraine. Based on recently published data by Talisman, the discovered resource for the Lorraine of 50 Bcf-190 Bcf per section compares favorably to the discovered resource for the Utica of 25 Bcf-160 Bcf per section. The initial three vertical test wells will also test the Trenton Black-River. Further investment in the Trenton Black-River will be contingent on the exploration results achieved.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, "We are delighted with the expanded program to evaluate commerciality of both the Lorraine and Utica formations. Based on work to date we believe the rock properties are very promising for unconventional gas in the Lowlands."
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
FOR FURTHER INFORMATION PLEASE CONTACT:Questerre Energy Corporation
Jason D'Silva
VP Finance
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
02:15 EDT Wednesday, May 21, 2008
CALGARY, ALBERTA--(Marketwire - May 21, 2008) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC)(OSLO:QEC) announced that it plans to participate with its partner Talisman Energy Canada ("Talisman") in a major pilot program to assess the commerciality of unconventional gas in the St. Lawrence Lowlands, Quebec.
In addition to the previously announced commitment to drill three vertical test wells, the pilot program will include vertical and several horizontal wells. Questerre expects the program to be carried out in 2008 and 2009 with a budget in excess of $100 million. For its acreage in the play fairway, Questerre will budget, on a net basis, between $25 million and $30 million of which $3 million to $5 million is expected to be spent in 2008 with the balance in 2009. These amounts do not include anticipated spending on the Yamaska licenses.
The pilot project to assess commerciality will focus on the siltstone/shale sequences of both the Utica and Lorraine. Based on recently published data by Talisman, the discovered resource for the Lorraine of 50 Bcf-190 Bcf per section compares favorably to the discovered resource for the Utica of 25 Bcf-160 Bcf per section. The initial three vertical test wells will also test the Trenton Black-River. Further investment in the Trenton Black-River will be contingent on the exploration results achieved.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, "We are delighted with the expanded program to evaluate commerciality of both the Lorraine and Utica formations. Based on work to date we believe the rock properties are very promising for unconventional gas in the Lowlands."
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
FOR FURTHER INFORMATION PLEASE CONTACT:Questerre Energy Corporation
Jason D'Silva
VP Finance
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
Questerre Announces Equity Offering
Questerre Announces Equity Offering
12:32 EDT Wednesday, May 21, 2008
CALGARY, ALBERTA--(Marketwire - May 21, 2008) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSLO:QEC) announced it plans to complete an equity offering.
The offering will consist of up to 15,000,000 Common Shares and will include an over allotment option of 1,125,000 Common Shares. Pricing will be finalized later today. The placement is subject to receipt of all regulatory approval.
The offering will be completed in two tranches one in Norway (the "Norwegian Issue") and one in Canada (the "Canadian Issue").
The Company has appointed Pareto Securities AS and DnB NOR Markets ASA as its financial advisors and syndicate managers for the Norwegian Issue. The Norwegian syndicate will include SEB Enskilda AS. This issue will be carried out through a book building process that will close on or before 0830 CET on May 22, 2008.
The Canadian Issue will be managed by a syndicate of underwriters led by Dundee Securities Corporation and including Desjardin Securities Inc., National Bank Financial Inc., Wellington West Capital Markets Inc, Fraser Mackenzie Limited, Maison Placements Canada Inc, and Canaccord Capital Corporation. The Canadian agents have an overallotment option of 15% on the same terms.
Questerre anticipates the proceeds from this placement will primarily finance its planned exploration and appraisal program in the St. Lawrence Lowlands Quebec and other core areas including Antler and Greater Sierra in 2009.
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
FOR FURTHER INFORMATION PLEASE CONTACT:Questerre Energy Corporation `
Jason D'Silva
VP Finance
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
12:32 EDT Wednesday, May 21, 2008
CALGARY, ALBERTA--(Marketwire - May 21, 2008) - Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSLO:QEC) announced it plans to complete an equity offering.
The offering will consist of up to 15,000,000 Common Shares and will include an over allotment option of 1,125,000 Common Shares. Pricing will be finalized later today. The placement is subject to receipt of all regulatory approval.
The offering will be completed in two tranches one in Norway (the "Norwegian Issue") and one in Canada (the "Canadian Issue").
The Company has appointed Pareto Securities AS and DnB NOR Markets ASA as its financial advisors and syndicate managers for the Norwegian Issue. The Norwegian syndicate will include SEB Enskilda AS. This issue will be carried out through a book building process that will close on or before 0830 CET on May 22, 2008.
The Canadian Issue will be managed by a syndicate of underwriters led by Dundee Securities Corporation and including Desjardin Securities Inc., National Bank Financial Inc., Wellington West Capital Markets Inc, Fraser Mackenzie Limited, Maison Placements Canada Inc, and Canaccord Capital Corporation. The Canadian agents have an overallotment option of 15% on the same terms.
Questerre anticipates the proceeds from this placement will primarily finance its planned exploration and appraisal program in the St. Lawrence Lowlands Quebec and other core areas including Antler and Greater Sierra in 2009.
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
FOR FURTHER INFORMATION PLEASE CONTACT:Questerre Energy Corporation `
Jason D'Silva
VP Finance
(403) 777-1185
(403) 777-1578 (FAX)
Email: info@questerre.com
Website: www.questerre.com
Talisman shifts focus to unconventional gas
Talisman shifts focus to unconventional gas
DAVID EBNER
00:00 EDT Wednesday, May 21, 2008
CALGARY -- Talisman Energy Inc. plans to spend $1.3-billion in the next 18 months to evaluate the potential of unconventional natural gas on one million hectares of land it controls in North America.
The spending is part of an overhaul of the company's strategy, a process that started when new chief executive officer John Manzoni took over from long-time leader Jim Buckee last year.
Talisman has spoken about the broad ideas of its shift and late yesterday provided some details ahead of three days of meetings with investors, starting today in New York, moving to Toronto tomorrow and to Calgary on Friday.
Instead of chasing exploration opportunities around the world, Talisman is narrowing its geographic focus. It is also embracing unconventional gas, which Mr. Buckee had dismissed as uninteresting while competitors such as EnCana Corp. successfully pursued it.
Unconventional gas is in fields where the molecules are trapped in tight rock formations that are difficult to access.
With higher spending on unconventional gas, Talisman's budget this year is rising $500-million or 11 per cent to $4.9-billion and will jump a further 18 per cent to $5.8-billion if the work goes well.
"By the end of 2009, we will be able to make informed choices about ongoing levels of investment into our unconventional resource plays," Mr. Manzoni said in a statement.
As Talisman evaluates unconventional gas, it said it aims to increase production by about 6.5 per cent. In 2010, 2011 and 2012, Talisman said it hopes to push the growth to about 7.5 per cent.
Talisman stock has climbed quickly recently after two years of a slow decline. Since March, the shares have soared more than 50 per cent, riding surging oil and gas prices. The Toronto Stock Exchange energy index rose 3.1 per cent to another record close.
The company hopes to raise $2-billion selling assets worth 45,000 barrels a day to further focus the company's holdings. Talisman has been selling assets for several years after criticism from investors that the firm had too many things on the go.
In the first quarter, Talisman's production of oil and gas was 411,000 barrels a day.
TALISMAN (TLM)
Close: $24.90, up 96¢
DAVID EBNER
00:00 EDT Wednesday, May 21, 2008
CALGARY -- Talisman Energy Inc. plans to spend $1.3-billion in the next 18 months to evaluate the potential of unconventional natural gas on one million hectares of land it controls in North America.
The spending is part of an overhaul of the company's strategy, a process that started when new chief executive officer John Manzoni took over from long-time leader Jim Buckee last year.
Talisman has spoken about the broad ideas of its shift and late yesterday provided some details ahead of three days of meetings with investors, starting today in New York, moving to Toronto tomorrow and to Calgary on Friday.
Instead of chasing exploration opportunities around the world, Talisman is narrowing its geographic focus. It is also embracing unconventional gas, which Mr. Buckee had dismissed as uninteresting while competitors such as EnCana Corp. successfully pursued it.
Unconventional gas is in fields where the molecules are trapped in tight rock formations that are difficult to access.
With higher spending on unconventional gas, Talisman's budget this year is rising $500-million or 11 per cent to $4.9-billion and will jump a further 18 per cent to $5.8-billion if the work goes well.
"By the end of 2009, we will be able to make informed choices about ongoing levels of investment into our unconventional resource plays," Mr. Manzoni said in a statement.
As Talisman evaluates unconventional gas, it said it aims to increase production by about 6.5 per cent. In 2010, 2011 and 2012, Talisman said it hopes to push the growth to about 7.5 per cent.
Talisman stock has climbed quickly recently after two years of a slow decline. Since March, the shares have soared more than 50 per cent, riding surging oil and gas prices. The Toronto Stock Exchange energy index rose 3.1 per cent to another record close.
The company hopes to raise $2-billion selling assets worth 45,000 barrels a day to further focus the company's holdings. Talisman has been selling assets for several years after criticism from investors that the firm had too many things on the go.
In the first quarter, Talisman's production of oil and gas was 411,000 barrels a day.
TALISMAN (TLM)
Close: $24.90, up 96¢
Friday, May 16, 2008
Questerre and Talisman to Accelerate Work in Quebec
Buy It Today :"First, it means that QEC will be prominiently mentioned at Talisman's presentation next week.Second, that Talisman approved having QEC steal a little of there thunder with this pre-release of info because it is a fairly large part of their shale gas plans. Finally, given that we now know that this 700,000 acre jt venture with Talisman is very important to them we can expect to get schedule for the rampup of production. The profit potential is going to surprise a lot of people."
Source
Questerre and Talisman to Accelerate Work in Quebec
QUESTERRE ENERGY CORP QEC5/16/2008 12:15:03 AMCALGARY, ALBERTA, May 16, 2008 (Marketwire via COMTEX News Network) --
Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSE:QEC) is pleased to announce that Talisman Energy Canada ("Talisman") has elected to drill the remaining three option wells under its farm-in agreement with Questerre and its minority partner in the St. Lawrence Lowlands, Quebec.
The three wells will complete the work program allowing Talisman to earn about a 75% interest in the original 719,000 acre farm-out block. Questerre also retains about a 4 1/4% gross overriding royalty on production from Talisman.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, "We were one of the first companies to recognize the potential of the Quebec Lowlands for unconventional gas and have worked for almost ten years to get to this point. We are thrilled that Talisman, which also saw the potential early on, has decided to accelerate the exploration and appraisal program.
Our joint land lies right in the heart of the Lowlands between the Yamaska growth fault and Logan's Line and runs from Quebec City to south of Lac Saint Pierre. We continue to believe this land position proximate to the market has significant natural gas potential."
The three-well program is expected to commence in the latter half of 2008. The wells will test multiple horizons including the Trenton Black-River and the Utica and Lorraine shale sequences.
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect.
These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
SOURCE: QUESTERRE ENERGY CORPORATION
Questerre Energy Corporation Jason D'Silva VP Finance (403) 777-1185 (403) 777-1578 (FAX) Email: info@questerre.com Website: http://www.questerre.com/Copyright (C) 2008 Marketwire. All rights reserved.
Roving Talisman casts its eyes homeward
NORVAL SCOTT
00:00 EDT Thursday, May 01, 2008
CALGARY -- Talisman Energy Inc., which for years staked its future on former chief executive officer Jim Buckee's vision of global deep-well exploration, is making a dramatic about-turn: It's embracing Canada's unconventional natural gas resources.
John Manzoni, who took over as CEO in September, said yesterday Talisman will now focus on growth in only a select few areas, one of which is producing gas from tight rock formations in North America.
Under Mr. Buckee, its only previous CEO, the company developed an idiosyncratic reputation for seeking worldwide growth through exploration, instead of tackling the easy-to-find, yet hard-to-develop resources lying in the company's own Alberta backyard.
While Talisman will continue to be a worldwide explorer, Mr. Manzoni's new strategy effectively ditches the company's scattergun approach. His more conservative plan would seek to deliver more reliable, sustainable production over a longer period, adopting the ways of many oil patch majors.
"What has been successful over the last decade may not be so successful going forward," said Mr. Manzoni at the company's annual meeting in Calgary. "In the last year or two our business model has become challenged - we are now at a scale where's it's more difficult to grow at the same pace with the same strategies. We have had to run faster and faster just to stand still."
The annual meeting, which followed the release of the company's first-quarter financial results, was Mr. Manzoni's first public appearance as CEO.
Under Mr. Buckee, who retired last year, Talisman grew from a 1992 spinoff from BP PLC to become one of Canada's largest oil and gas companies, expanding rapidly in regions like the North Sea and - controversially - Sudan. All the while, it avoided unconventional resources like Alberta's oil sands or shale gas, which Mr. Buckee said were uneconomic to develop.
While Talisman had some big finds, it found reliable production growth difficult to come by, while its share price lagged those of rivals like EnCana Corp. and Canadian Natural Resources Ltd. that had made such reserves a focus. Investors began to suggest the firm should be broken up to maximize value.
Under the strategy unveiled yesterday, Talisman will now seek to "lengthen its stride" by demonstrating that it can sustainably grow over the long term, Mr. Manzoni said. The firm will divest assets in non-strategic areas and will no longer look to expand in the North Sea - previously a core growth area. Instead, it will look to develop Southeast Asia and Norway more rapidly, while it may also look to South America and North Africa for future growth.
The firm will also seek to develop shallow but wide unconventional natural gas deposits trapped in shale, sand and silt, an area it hasn't previously targeted. The advantage of that strategy is that Talisman - an established conventional gas producer - already holds a vast North American land base of 2.5 million acres whose unconventional reserves haven't even been evaluated, let alone tapped.
That acreage includes holdings in some of North America's hottest unconventional fields, such as Bakken in Saskatchewan and Montney in British Columbia. Talisman is also the largest landholder in Quebec, whose gas production potential, which could be unlocked with new extraction techniques, has been the subject of fevered speculation in recent months.
"Those are the big names, and we've got them," Mr. Manzoni told reporters after the annual meeting. The company now plans to run pilot projects in those areas to determine the size of reserves before coming up with a more detailed development plan, he said.
While Talisman is now looking at its unconventional resources and will consider making acquisitions, it still has no plans to get into the oil sands, Mr. Manzoni said.
TALISMAN ENERGY (TLM)
Source
Questerre and Talisman to Accelerate Work in Quebec
QUESTERRE ENERGY CORP QEC5/16/2008 12:15:03 AMCALGARY, ALBERTA, May 16, 2008 (Marketwire via COMTEX News Network) --
Questerre Energy Corporation ("Questerre" or the "Company") (TSX:QEC) (OSE:QEC) is pleased to announce that Talisman Energy Canada ("Talisman") has elected to drill the remaining three option wells under its farm-in agreement with Questerre and its minority partner in the St. Lawrence Lowlands, Quebec.
The three wells will complete the work program allowing Talisman to earn about a 75% interest in the original 719,000 acre farm-out block. Questerre also retains about a 4 1/4% gross overriding royalty on production from Talisman.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, "We were one of the first companies to recognize the potential of the Quebec Lowlands for unconventional gas and have worked for almost ten years to get to this point. We are thrilled that Talisman, which also saw the potential early on, has decided to accelerate the exploration and appraisal program.
Our joint land lies right in the heart of the Lowlands between the Yamaska growth fault and Logan's Line and runs from Quebec City to south of Lac Saint Pierre. We continue to believe this land position proximate to the market has significant natural gas potential."
The three-well program is expected to commence in the latter half of 2008. The wells will test multiple horizons including the Trenton Black-River and the Utica and Lorraine shale sequences.
Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.
This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect.
These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.
SOURCE: QUESTERRE ENERGY CORPORATION
Questerre Energy Corporation Jason D'Silva VP Finance (403) 777-1185 (403) 777-1578 (FAX) Email: info@questerre.com Website: http://www.questerre.com/Copyright (C) 2008 Marketwire. All rights reserved.
Roving Talisman casts its eyes homeward
NORVAL SCOTT
00:00 EDT Thursday, May 01, 2008
CALGARY -- Talisman Energy Inc., which for years staked its future on former chief executive officer Jim Buckee's vision of global deep-well exploration, is making a dramatic about-turn: It's embracing Canada's unconventional natural gas resources.
John Manzoni, who took over as CEO in September, said yesterday Talisman will now focus on growth in only a select few areas, one of which is producing gas from tight rock formations in North America.
Under Mr. Buckee, its only previous CEO, the company developed an idiosyncratic reputation for seeking worldwide growth through exploration, instead of tackling the easy-to-find, yet hard-to-develop resources lying in the company's own Alberta backyard.
While Talisman will continue to be a worldwide explorer, Mr. Manzoni's new strategy effectively ditches the company's scattergun approach. His more conservative plan would seek to deliver more reliable, sustainable production over a longer period, adopting the ways of many oil patch majors.
"What has been successful over the last decade may not be so successful going forward," said Mr. Manzoni at the company's annual meeting in Calgary. "In the last year or two our business model has become challenged - we are now at a scale where's it's more difficult to grow at the same pace with the same strategies. We have had to run faster and faster just to stand still."
The annual meeting, which followed the release of the company's first-quarter financial results, was Mr. Manzoni's first public appearance as CEO.
Under Mr. Buckee, who retired last year, Talisman grew from a 1992 spinoff from BP PLC to become one of Canada's largest oil and gas companies, expanding rapidly in regions like the North Sea and - controversially - Sudan. All the while, it avoided unconventional resources like Alberta's oil sands or shale gas, which Mr. Buckee said were uneconomic to develop.
While Talisman had some big finds, it found reliable production growth difficult to come by, while its share price lagged those of rivals like EnCana Corp. and Canadian Natural Resources Ltd. that had made such reserves a focus. Investors began to suggest the firm should be broken up to maximize value.
Under the strategy unveiled yesterday, Talisman will now seek to "lengthen its stride" by demonstrating that it can sustainably grow over the long term, Mr. Manzoni said. The firm will divest assets in non-strategic areas and will no longer look to expand in the North Sea - previously a core growth area. Instead, it will look to develop Southeast Asia and Norway more rapidly, while it may also look to South America and North Africa for future growth.
The firm will also seek to develop shallow but wide unconventional natural gas deposits trapped in shale, sand and silt, an area it hasn't previously targeted. The advantage of that strategy is that Talisman - an established conventional gas producer - already holds a vast North American land base of 2.5 million acres whose unconventional reserves haven't even been evaluated, let alone tapped.
That acreage includes holdings in some of North America's hottest unconventional fields, such as Bakken in Saskatchewan and Montney in British Columbia. Talisman is also the largest landholder in Quebec, whose gas production potential, which could be unlocked with new extraction techniques, has been the subject of fevered speculation in recent months.
"Those are the big names, and we've got them," Mr. Manzoni told reporters after the annual meeting. The company now plans to run pilot projects in those areas to determine the size of reserves before coming up with a more detailed development plan, he said.
While Talisman is now looking at its unconventional resources and will consider making acquisitions, it still has no plans to get into the oil sands, Mr. Manzoni said.
TALISMAN ENERGY (TLM)
Thursday, May 15, 2008
Pescod Talks These Stocks = Accumulation
Connacher to participate in BNP Paribas Annual Investor Conference
13:26 EDT Thursday, May 15, 2008
CALGARY, May 15 /CNW/ - Connacher Oil and Gas Limited (CLL-TSX) announced today that it is a participant at the 2008 BNP Paribas Annual Investor Conference in the Bahamas on May 16, 2008. Participating in a panel discussion on oil sands at approximately 9:45 AM MST will be Mr. Richard Kines, Vice President Finance and Chief Financial Officer and Mr. Cameron Todd, Vice President, Refining and Marketing.
Connacher's corporate slide presentation is on the website at www.connacheroil.com. Click on the Investor Information link and go to the May 2008 Presentation.
Connacher Oil and Gas Limited is a Calgary-based Canadian oil and natural gas exploration, development, production and refining company. The company's principal assets are its significant bitumen reserves and resources and its 100 percent interest in approximately 98,000 net acres of oil sands leases at or near its Great Divide oil sands project near Fort McMurray, Alberta. It also owns conventional production and reserves at Marten Creek and Three Hills, Alberta and at Battrum, Saskatchewan.
Connacher owns and operates a 9,500 barrel per day heavy oil refinery in Great Falls, Montana and maintains a valuable 26 percent equity stake in Petrolifera Petroleum Limited (PDP - TSX), a public company active in Argentina, Colombia and Peru in South America.
For further information: Richard A. Gusella, President and Chief Executive Officer, OR Grant D. Ukrainetz, Vice President, Corporate Development, Phone: (403) 538-6201, Fax: (403) 538-6225, inquiries@connacheroil.com, Website: www.connacheroil.com
13:26 EDT Thursday, May 15, 2008
CALGARY, May 15 /CNW/ - Connacher Oil and Gas Limited (CLL-TSX) announced today that it is a participant at the 2008 BNP Paribas Annual Investor Conference in the Bahamas on May 16, 2008. Participating in a panel discussion on oil sands at approximately 9:45 AM MST will be Mr. Richard Kines, Vice President Finance and Chief Financial Officer and Mr. Cameron Todd, Vice President, Refining and Marketing.
Connacher's corporate slide presentation is on the website at www.connacheroil.com. Click on the Investor Information link and go to the May 2008 Presentation.
Connacher Oil and Gas Limited is a Calgary-based Canadian oil and natural gas exploration, development, production and refining company. The company's principal assets are its significant bitumen reserves and resources and its 100 percent interest in approximately 98,000 net acres of oil sands leases at or near its Great Divide oil sands project near Fort McMurray, Alberta. It also owns conventional production and reserves at Marten Creek and Three Hills, Alberta and at Battrum, Saskatchewan.
Connacher owns and operates a 9,500 barrel per day heavy oil refinery in Great Falls, Montana and maintains a valuable 26 percent equity stake in Petrolifera Petroleum Limited (PDP - TSX), a public company active in Argentina, Colombia and Peru in South America.
For further information: Richard A. Gusella, President and Chief Executive Officer, OR Grant D. Ukrainetz, Vice President, Corporate Development, Phone: (403) 538-6201, Fax: (403) 538-6225, inquiries@connacheroil.com, Website: www.connacheroil.com
Today is Sprott day
Today is Sprott day
RTGAM
In Canada, Eric Sprott's investment firm, Sprott Inc. begins trading on the Toronto Stock Exchange after a successful initial public offering valued the company at about $1.5-billion.[amp]nbsp;The stock is seen as a play on commodities, given that Mr. Sprott has invested heavily in a number of Canadian commodity producers.Copyright 2001 The Globe and Mail
Stock index futures suggested a higher start on Thursday morning, with investors digesting a number of economics reports, deals and earnings releases. Futures for the Dow Jones industrial average rose 46 points, to 12,925 about an hour before trading begins. Futures for the broader S[amp]amp;P 500 rose 5 points, to 1412.Reports suggest that Carl Icahn is ready to make a move for Yahoo Inc. by installing his own slate of directors, perhaps as early as today.
Yahoo shares rose 44 cents, to $27.58 (U.S.) in premarket trading.General Electric Co., stung by a disappointing first-quarter miss, has suggested that it will seek a buyer for its appliances business in a deal that could be worth between $5-billion and $8-billion.Investors got another glimpse of U.S. consumer spending early on Thursday when J.C. Penny Co. released first-quarter earnings that fell 50 per cent. The upside, though, is that the retailer issued a more upbeat forecast for the second quarter than analysts had been expecting.
The company's shares rose 4 per cent in premarket activity.Meanwhile, the U.S. Labor Department reported that U.S. employment conditions remain weak, with initial jobless claims rising by 6,000 last week to 371,000.In Asia, Japan's Nikkei 225 rose 0.9 per cent. In Europe, the U.K.'s FTSE 100 rose 0.4 per cent and Germany's DAX index fell 0.1 per cent in afternoon trading - slim gains considering investors were treated to indications of surprisingly strong economic growth. The European economy grew 0.7 per cent in the first quarter over the fourth quarter of 2007, ahead of expectations. Germany, in particular, recorded its strongest growth in 12 years, expanding at a 1.5 per cent clip, quarter over quarter, that was nearly twice what economists had been expecting.
RTGAM
In Canada, Eric Sprott's investment firm, Sprott Inc. begins trading on the Toronto Stock Exchange after a successful initial public offering valued the company at about $1.5-billion.[amp]nbsp;The stock is seen as a play on commodities, given that Mr. Sprott has invested heavily in a number of Canadian commodity producers.Copyright 2001 The Globe and Mail
Stock index futures suggested a higher start on Thursday morning, with investors digesting a number of economics reports, deals and earnings releases. Futures for the Dow Jones industrial average rose 46 points, to 12,925 about an hour before trading begins. Futures for the broader S[amp]amp;P 500 rose 5 points, to 1412.Reports suggest that Carl Icahn is ready to make a move for Yahoo Inc. by installing his own slate of directors, perhaps as early as today.
Yahoo shares rose 44 cents, to $27.58 (U.S.) in premarket trading.General Electric Co., stung by a disappointing first-quarter miss, has suggested that it will seek a buyer for its appliances business in a deal that could be worth between $5-billion and $8-billion.Investors got another glimpse of U.S. consumer spending early on Thursday when J.C. Penny Co. released first-quarter earnings that fell 50 per cent. The upside, though, is that the retailer issued a more upbeat forecast for the second quarter than analysts had been expecting.
The company's shares rose 4 per cent in premarket activity.Meanwhile, the U.S. Labor Department reported that U.S. employment conditions remain weak, with initial jobless claims rising by 6,000 last week to 371,000.In Asia, Japan's Nikkei 225 rose 0.9 per cent. In Europe, the U.K.'s FTSE 100 rose 0.4 per cent and Germany's DAX index fell 0.1 per cent in afternoon trading - slim gains considering investors were treated to indications of surprisingly strong economic growth. The European economy grew 0.7 per cent in the first quarter over the fourth quarter of 2007, ahead of expectations. Germany, in particular, recorded its strongest growth in 12 years, expanding at a 1.5 per cent clip, quarter over quarter, that was nearly twice what economists had been expecting.
Wednesday, May 14, 2008
Timminco Schedules Conference Call
Timminco Schedules Conference Call to Discuss Operational Review Report by PHOTON Consulting on May 14
TIMMINCO LTD TIM
5/13/2008 1:28:00 PM
Conference call also to be webcast at www.timminco.comTORONTO, ONTARIO, May 13, 2008 (MARKET WIRE via COMTEX News Network) --
Timminco Limited ("Timminco") (TSX: TIM) announced today it will host a conference call on Wednesday, May 14, 2008 at 4:30 pm ET to discuss the highlights of the operational review report completed by a team from PHOTON Consulting on Becancour Silicon Inc, Timminco's solar grade silicon business.
Michael Rogol, Managing Director of PHOTON Consulting will make a presentation and answer questions relating to the solar industry and BSI's position in the industry.
Mr. Rogol is a leading expert on solar energy and focuses on emerging trends in the sector. His recent work includes detailed reports on solar power based on a global review of several hundred solar power companies. Mr. Rogol's research on silicon use in the solar power sector has been included in numerous reports (e.g., Sun Screen, Sun Screen II, Solar Annual 2006, Solar Annual 2007, True Cost of Solar Power), at numerous conferences, (e.g., PHOTON's Solar Silicon Conferences) and in the "Silicon Space" column of PHOTON International magazine. Mr. Rogol's background in the energy sector includes more than a decade of experience working with large energy players while at McKinsey & Co, Cambridge Energy Research Associates, Washington Policy & Analysis and MIT's Laboratory for Energy & Environment. Mr. Rogol holds a BS in Engineering Systems from MIT, an MBA from MIT, a BS in Foreign Service from Georgetown University and was a Henry Luce East Asian Scholar in Korea.
Martin Meyers of PHOTON Consulting, will also participate. Mr. Meyers has nearly 30 years experience in the energy industry, including 18 years with Royal Dutch/Shell and nearly a decade at Cambridge Energy Research Associates (CERA), where he was a Director of Research. His experience includes plant design, operations, technical support and optimization. Martin holds an MBA from Concordia University and a B.A.Sc. (Chemical Engineering) from Queen's University in Kingston, Ontario.
To access the conference call by telephone, dial 416-644-3433 or 1-800-814-4890. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Wednesday, May 21, 2008 at midnight. To access the archived conference call, dial 416-640-1917 or 1-877-289-8525 and enter the reservation number 21271874#
A live audio webcast of the conference call will be also available at www.timminco.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be available for replay at www.timminco.com following the live presentation.
ABOUT TiMMINCO
Timminco is a leader in the production and marketing of lightweight metals, specializing in solar grade silicon for the rapidly growing solar photovoltaic energy industry. Using its proprietary technology, Timminco processes metallurgical grade silicon into low cost solar grade silicon for use in the manufacture of solar cells. Timminco also produces silicon metal, specialty ferrosilicon and alloy magnesium for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.
CAUTIONARY NOTE ON FORWARD-LOOKING IN
TIMMINCO LTD TIM
5/13/2008 1:28:00 PM
Conference call also to be webcast at www.timminco.comTORONTO, ONTARIO, May 13, 2008 (MARKET WIRE via COMTEX News Network) --
Timminco Limited ("Timminco") (TSX: TIM) announced today it will host a conference call on Wednesday, May 14, 2008 at 4:30 pm ET to discuss the highlights of the operational review report completed by a team from PHOTON Consulting on Becancour Silicon Inc, Timminco's solar grade silicon business.
Michael Rogol, Managing Director of PHOTON Consulting will make a presentation and answer questions relating to the solar industry and BSI's position in the industry.
Mr. Rogol is a leading expert on solar energy and focuses on emerging trends in the sector. His recent work includes detailed reports on solar power based on a global review of several hundred solar power companies. Mr. Rogol's research on silicon use in the solar power sector has been included in numerous reports (e.g., Sun Screen, Sun Screen II, Solar Annual 2006, Solar Annual 2007, True Cost of Solar Power), at numerous conferences, (e.g., PHOTON's Solar Silicon Conferences) and in the "Silicon Space" column of PHOTON International magazine. Mr. Rogol's background in the energy sector includes more than a decade of experience working with large energy players while at McKinsey & Co, Cambridge Energy Research Associates, Washington Policy & Analysis and MIT's Laboratory for Energy & Environment. Mr. Rogol holds a BS in Engineering Systems from MIT, an MBA from MIT, a BS in Foreign Service from Georgetown University and was a Henry Luce East Asian Scholar in Korea.
Martin Meyers of PHOTON Consulting, will also participate. Mr. Meyers has nearly 30 years experience in the energy industry, including 18 years with Royal Dutch/Shell and nearly a decade at Cambridge Energy Research Associates (CERA), where he was a Director of Research. His experience includes plant design, operations, technical support and optimization. Martin holds an MBA from Concordia University and a B.A.Sc. (Chemical Engineering) from Queen's University in Kingston, Ontario.
To access the conference call by telephone, dial 416-644-3433 or 1-800-814-4890. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Wednesday, May 21, 2008 at midnight. To access the archived conference call, dial 416-640-1917 or 1-877-289-8525 and enter the reservation number 21271874#
A live audio webcast of the conference call will be also available at www.timminco.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be available for replay at www.timminco.com following the live presentation.
ABOUT TiMMINCO
Timminco is a leader in the production and marketing of lightweight metals, specializing in solar grade silicon for the rapidly growing solar photovoltaic energy industry. Using its proprietary technology, Timminco processes metallurgical grade silicon into low cost solar grade silicon for use in the manufacture of solar cells. Timminco also produces silicon metal, specialty ferrosilicon and alloy magnesium for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.
CAUTIONARY NOTE ON FORWARD-LOOKING IN
Timminco shines through media storm, short selling
Timminco shines through media storm, short selling
2008-05-14 13:32 ET - Street Wire
by Lee M. Webb
Timminco Ltd., a high-flying Toronto Stock Exchange (TSX) solar silicon player that has been a market darling and at least an indirect cash cow for some insiders over the past year or so, appears to be shining through a recent media storm and gloomy forecasts from short sellers and critics who want more light shed on the company.
Heinz Schimmelbusch, Timminco's chairman and chief executive officer, is the principal architect of the company's recent foray into the production of solar-grade silicon, the key component in photovoltaic cells that convert solar energy into electricity, which triggered the stock's meteoric rise on the TSX.
As recently as January of last year, Timminco's stock price was languishing at approximately 30 cents per share in lacklustre trading that frequently saw only a few thousand shares changing hands per session. Those days are gone.
Over the past 12 months, more than 552.5 million Timminco shares with a staggering market value of more than $8.3-billion have changed hands at an average price of $15.06 per share.
On April 16, Timminco notched an all-time high of $28.50 per share, temporarily giving the company a market capitalization of more than $2.96-billion. The stock price has tailed off somewhat, but Timminco is still actively trading well above $20 per share with millions of shares changing hands each day.
Timminco has certainly been a star performer on Canada's premier exchange, but not everyone is caught up in the hoopla over the solar silicon play or enthralled by the money-losing company that has racked up an accumulated deficit of more than $82-million.
Recently, Timminco has experienced some increased pressure from short sellers, including New York-based Manuel P. Asensio. Stockwatch will revisit Mr. Asensio in a future article, but will offer a brief introduction here.
Short sellers are widely despised, perhaps particularly by gullible investors quick to blame them for falling stock prices, and Mr. Asensio arguably has more than his fair share of detractors.
In the 1990s, Mr. Asensio gained notoriety for his abrasive, confrontational and high-profile attacks on his short-selling targets, many of which subsequently collapsed completely.
Perhaps somewhat chastened by his own brush with regulators and a number of lawsuits launched by companies irked by his attention and tactics, Mr. Asensio has adopted a more reserved approach in recent years. However, some of his more vocal critics claim that he is the point man for unscrupulous hedge funds and has a too-cozy relationship with some journalists.
Diatribes against Mr. Asensio often overlook the quality of his research and his rather impressive record in sniffing out overvalued companies. While his record is not perfect, Mr. Asensio certainly knows the game.
Short sellers complain that it is difficult to borrow the Timminco shares to establish a short position, which may not be surprising given that the company's two largest shareholders control almost 70 per cent of its stock.
AMG Advanced Metallurgical Group N.V., which is also headed by Mr. Schimmelbusch, owns approximately 52.56 million Timminco shares representing 50.5 per cent of the outstanding stock. Sprott Asset Management controls approximately 17.7 million shares or 17 per cent of Timminco's stock.
Notwithstanding the difficulty in locating shares to borrow, there was a reported short position of almost 3.1 million shares as of April 30, an increase of approximately 1.9 million shares since April 15.
Interestingly, the jump in the short position to an all-time high of approximately 3.1 million shares between April 15 and April 30 coincides with a spate of largely unflattering news reports about Timminco.
If there is a causal relationship between the increase in the short position and the unusual media coverage, the directionality is an open question.
In any event, recent news reports have raised questions about some of Timminco's key players and, among other things, made at least passing reference to the company's secret proprietary process for producing solar silicon.
The recent unflattering coverage contrasts sharply with the many boosterish puff pieces dating back to early 2007 served up by the same media outlets now taking a poke at Timminco.
Sunny days
Shortly after Timminco entered the bubbling solar silicon market last year, major Canadian newspapers including The Globe and Mail and the National Post began marking its meteoric rise with upbeat reports.
The Financial Post was out of the gate early with an April 10, 2007, report by Peter Koven noting that two announced Timminco solar silicon deals gave the first indication that the company was capable of producing high-grade silicon. Timminco's share price had quadrupled from 65 cents per share to $2.85 per share in the first 10 days of April and was heading much higher.
On May 10, 2007, The Globe and Mail chimed in with reporter Allan Robinson tagging Timminco as a solar energy play because of its development of a low-cost, proprietary purification process to upgrade its chemical-grade silicon for solar applications.
The Globe's Mr. Robinson noted that Clarus Securities analyst Robert Catellier, who had a $6 target for Timminco, thought there could be "potentially explosive earnings growth." At the time, Timminco was changing hands for $3.75 per share and was headed much higher than Mr. Catellier's early target.
The National Post joined the celebration with a June 22, 2007, report by Sonita Horvitch noting that Marquest Investment Counsel partner Gerry Brockelsby was recommending Timminco.
Ms. Horvitch reported in her Buy & Sell column that the company had a proprietary technology to upgrade commodity-grade silicon to the 99.999-per-cent purity level required for use in solar panels. Timminco was then trading at $5 per share and still heading north.
The Globe's Maureen Darrigo followed up two days later with the report of a bullish recommendation from Leeward Capital Management's chief executive officer Brendan Kyne as Timminco was pushing through $5.50 per share and continuing its upward trajectory.
The enthusiasm continued as the Post's Grant Surridge, writing in Trading Post, reported that participants at a solar-energy conference in Germany predicted a looming shortage in the supply of high-quality silicon wafers used in solar cells and the Globe's Mr. Robinson added a July 18, 2007, report that Timminco should benefit from strong demand for silicon.
The upbeat news reports picked up again in the fall with the Globe's Joanna Smith reporting that Timminco had already sold out the full annual production from the silicon facility it had not even finished building yet.
"These guys are winning business left, right and centre," Paradigm Capital Inc. analyst Marvin Wolff reportedly told Ms. Smith on Sept. 7, 2007.
According to Ms. Smith's report, Mr. Wolff had a target of $13 for Timminco and Clarus Securities Inc.'s Carolina Vargas was beating the drum with a $13.50 target. Timminco was trading at $9.15 per share at the time.
Just a few days later, the Globe's Richard Blackwell reported that Paradigm Capital's bullish Mr. Wolff had upped his target to $18 per share, projecting revenue of $880-million by 2010.
By Sept. 21, 2007, Sprott Growth Fund manager Peter Hodson was reportedly telling the Globe's Ms. Darrigo that Timminco "has the potential to be a $50 stock before 2010."
On Sept. 25, 2007, Ms. Darrigo followed up with a report that Leeward Capital's Mr. Kyne was still recommending Timminco. At the time, the stock was changing hands for $11.50 per share.
The bullish reports continued as Timminco broke through $15 per share in early December of last year and the Globe's Angela Barnes reported that Paul Mesburis of Mavrix Sierra Equity Fund thought the stock could go much higher over the next year.
On Dec. 18, 2007, the Globe's Ms. Darrigo chimed in again with a report that Leeward Capital's Mr. Kyne was just as keen as ever on Timminco.
"Timminco is the top supplier of silicon to the solar industry," Mr. Kyne reportedly told Ms. Darrigo. If Mr. Kyne did make that claim, he is wrong.
Before the end of December of last year, Timminco was trading above $18 per share and, with a few bumps along the way, it continued to move upward in the early part of this year.
On March 27, Timminco's stock price surged past $25 per share on the announcement of a deal to supply solar-grade silicon to Germany's Q-Cells AG, the world's largest supplier of solar cells.
The Globe's David Berman remarked on the price jump in a March 28 article, noting that Timminco had climbed more than 3,900 per cent over the past 12 months.
Mr. Berman went on to report that Cormark Securities analyst MacMurray Whale had a "reduce" recommendation on the stock with a target of $19.50, while National Bank Financial analyst Rupert Merer contented himself with a "sector perform" and target price of $24 per share.
Meanwhile, bullish Clarus Securities analyst Mr. Catellier reportedly still had a buy recommendation on the stock with a new target price of $40 per share.
The largely celebratory puff pieces that traced the trajectory of Timminco's rocketing share price while parroting bullish analysts, offered little, if anything, in the way of probing questions about the company's share structure, insiders, associated companies or the secret proprietary technology that effectively renders its solar-grade silicon production a black-box project.
The tone of the media coverage changed abruptly and dramatically in late April.
Storm clouds
Interestingly, the first significant thunderhead to appear on Timminco's previously sunny horizon formed south of the border in an April 21 Barron's article written by Bill Alpert. Like many Canadian companies, Timminco trades in the so-called "grey market" in the U.S., but the volume is minuscule compared with the trading on the TSX.
The title of Mr. Alpert's two-page Barron's article, "Timminco Generates More Heat Than Light," anticipates the tenor of the piece.
Mr. Alpert opened his article by remarking that a recently announced public offering of Toronto-based Sprott Asset Management could make its founder, Eric Sprott, a billionaire. According to Mr. Alpert, Mr. Sprott owed a lot of that "good fortune to his firm's huge stake in a single stock called Timminco," the TSX's star performer for 2007.
"The justification for Timminco's share appreciation is supposed to be its invention of a low-cost way to purify the silicon needed for the booming solar-cell market," Mr. Alpert wrote. "But so far, the evidence for Timminco's breakthrough appears in PowerPoint slides, not financial reports."
Mr. Alpert also took aim at Timminco's largest shareholder, AMG, which is headed by Mr. Schimmelbusch and founded by his private equity firm Safeguard International Fund.
The Barron's writer reported that, in a clever exit strategy designed by Mr. Schimmelbusch, Safeguard shareholders managed to cash in on Timminco without hurting its share price by unloading shares of AMG, which is listed on Amsterdam's Euronext exchange.
Among other things, Mr. Alpert also raised questions about Timminco's touted proprietary technology.
"Timminco clearly has a lot to prove," Mr. Alpert wrote.
On the same day that Mr. Alpert's Barron's article appeared, the Financial Post's Barry Critchley more blandly reported that Timminco had its share of detractors, too.
According to the Post's April 21 article, National Bank Financial left its target at $24 even as Timminco blew through $28 per share and Cormark Securities had a bearish "reduce" recommendation with a $19.50 target.
On April 22, in a triple-bylined article led by Andy Hoffman, the Globe weighed in with its rather belated peek at how Timminco's former majority shareholder Safeguard International had transferred its holdings to Amsterdam-based AMG and then cashed in through that company's initial public offering and subsequent stock sales to the tune of $390-million.
On the same day, the Globe's Ms. Martin reported in the BNN Market Call column that Lawrence Asset Management president Ravi Sood had taken a short position in Timminco.
"It's not a question of whether or not it's overvalued," Mr. Sood reportedly told the Globe. "Is the stock even worth a dollar or two? Our firm is short Timminco."
The Globe's Andrew Willis also had a few words about Timminco on April 22, noting that it was a tricky short because there were simply no shares to borrow. According to Mr. Willis, that was prompting some muttering in hedge fund circles about long-term investors being unwilling to lend their stock and add fuel to the short sellers' fire.
No matter what the reason for the scarcity of stock, Mr. Willis suggested, a few frustrated short sellers will not influence events.
"Preventing borrowing doesn't change fundamentals that dictate the price of Timminco," one trader reportedly remarked. "It just stops the shorts from profiting on any decline."
On April 23, the Globe's Fabrice Taylor piled in with his examination of the Timminco/Safeguard/AMG controversy.
"Maybe Timminco's revolutionary silicon process will work out and make investors filthy rich," Mr. Taylor wrote. "Maybe it won't.
"One thing is for sure though: The people running the show aren't going to wait around to find out, at least not with all their skin in the game.
"Shareholders would be well served to watch what these people are doing."
Mr. Taylor went on to lament that slack disclosure requirements make it difficult to keep up with what insiders are doing.
"Fact is the people who control the company are highly conflicted and have been liquidating their position furiously," Mr. Taylor stated before going on to offer his sketch of Mr. Schimmelbusch's shrewd exit strategy for Safeguard through AMG.
The storm clouds continued to roll in as the Post's Mr. Critchley drew connections between Mr. Schimmelbusch and the former president of Timminco, John Walsh, and now-struggling Alberta company Ceramic Protection Corp.
In April 25 and April 29 articles, Mr. Critchley reported that Mr. Schimmelbusch was the head of Allied Resource when that company sold Alanx Wear Solutions to Ceramic in 2004. Mr. Walsh, a former senior executive at Alanx, became president of Ceramic before moving on for a stint at Timminco.
Ceramic's stock price rocketed above $25 per share and continued to perform fairly well until September of 2006 when Arizona-based ArmorWorks cancelled a supply agreement with the company, provoking a legal battle. The lawsuits have been settled, but Ceramic is now languishing at approximately $2.35 per share.
Mr. Critchley suggested that Timminco shareholders will want to avoid Ceramic's fate.
Over the next few days, both the Globe and the Post published articles about insider transactions by Timminco executives, including the granting of some very lucrative stock options and some rather timely, perhaps even suspiciously so, stock purchases by the company's former president and chief executive officer, Mr. Walsh.
Lost amid the recent thundering about Timminco in the Canadian media is the fact that much of what is causing all the hand-wringing could have been could have been revealed long ago, if, instead of all the hand-clapping over the TSX's solar darling, an editor or even an inquisitive reporter had paused to take an earlier peek beneath the covers.
For example, while Mr. Schimmelbusch did not take out a full-page ad to explain his very crafty exit strategy for Safeguard, disclosures by Timminco regarding the share movement between Safeguard and AMG, coupled with the latter's initial public offering prospectus and subsequent disclosures, trace it all out rather well.
In other words, if any of the market seers at the Globe or the Post had bothered to take a look while their colleagues were regularly pumping out puff pieces about the TSX's soaring solar play, Mr. Schimmelbusch's clever exit strategy could have been revealed a year ago.
Interestingly, while a number of Canadian journalists have some experience with covering black-box projects, perhaps most notably in connection with mining plays, little more than passing mention has been made about Timminco's secret proprietary process for turning metallurgical-grade silicon into much more valuable solar-grade silicon.
Notwithstanding the fact that there has not been much in the way of very pointed questions about its touted technology, Timminco evidently has some concerns about the investing public's confidence in its secret proprietary process.
Just ahead of releasing its first-quarter results and subsequent conference call on May 8, Timminco tried to dispel some of the gloomy effects of the recent stormy media coverage by announcing that it had received an operational review report from an outside consultant.
Photon rays
On May 8, Timminco announced that it had received an operational review report on its solar-grade business at Becancour based on a one-day visit by a Photon Consulting team led by Michael Rogol.
"Timminco commissioned the report to support due diligence efforts for strategic discussions beyond normal supplier-customer relationships that are continuing with potential partners," the company reported.
In a subsequent conference call to discuss the company's first-quarter results, Mr. Schimmelbusch rather more candidly indicated that the operational review was a response to public questions about Timminco's secret proprietary technology.
According to Mr. Schimmelbusch, some of Timminco's critics were now running for cover. It is not clear whether Timminco's leader was serving up a pun relating to short sellers, but there is little doubt that Mr. Schimmelbusch knows the game.
"The Photon Consulting team was given full access to the solar-grade silicon production facility, and to information relating to accounting procedures, research and development efforts, human resource needs, intellectual property and technical processes that the team requested to prepare its report," Timminco reported in its news release.
During the conference call, Mr. Schimmelbusch remarked that Photon had such open access that some of Timminco's employees were even a bit nervous about the disclosures they were making, though they reportedly co-operated fully with Mr. Rogol and his team.
"Operations and processes have potential for massive growth and, possibly, for reshaping the silicon industry," Mr. Rogol gushed in Timminco's upbeat news release.
"The equipment is very impressive, very low cost, beyond polyscale," Mr. Rogol continued. "In interviews, several customers have reported cell efficiencies above 14 per cent and some above 15 per cent utilizing 100-per-cent (unblended) solar-grade silicon from Becancour."
During the May 8 conference call, Timminco would not disclose just how much it paid Mr. Rogol to conduct the one-day walkabout and prepare the operational review report.
The company has scheduled another conference call for May 14 to discuss the conclusions of boosterish Mr. Rogol's apparently stellar report. An executive summary of the report will be made available prior to the call.
Meanwhile, perhaps basking in the anticipated rays of Photon's report, Timminco continues to be a busy trader on the TSX. With more than 5.27 million shares valued at $127-million changing hands, Timminco gained $1.60 to close at $24.60 on May 13.
Comments regarding this article may be sent to lwebb@stockwatch.com.
2008-05-14 13:32 ET - Street Wire
by Lee M. Webb
Timminco Ltd., a high-flying Toronto Stock Exchange (TSX) solar silicon player that has been a market darling and at least an indirect cash cow for some insiders over the past year or so, appears to be shining through a recent media storm and gloomy forecasts from short sellers and critics who want more light shed on the company.
Heinz Schimmelbusch, Timminco's chairman and chief executive officer, is the principal architect of the company's recent foray into the production of solar-grade silicon, the key component in photovoltaic cells that convert solar energy into electricity, which triggered the stock's meteoric rise on the TSX.
As recently as January of last year, Timminco's stock price was languishing at approximately 30 cents per share in lacklustre trading that frequently saw only a few thousand shares changing hands per session. Those days are gone.
Over the past 12 months, more than 552.5 million Timminco shares with a staggering market value of more than $8.3-billion have changed hands at an average price of $15.06 per share.
On April 16, Timminco notched an all-time high of $28.50 per share, temporarily giving the company a market capitalization of more than $2.96-billion. The stock price has tailed off somewhat, but Timminco is still actively trading well above $20 per share with millions of shares changing hands each day.
Timminco has certainly been a star performer on Canada's premier exchange, but not everyone is caught up in the hoopla over the solar silicon play or enthralled by the money-losing company that has racked up an accumulated deficit of more than $82-million.
Recently, Timminco has experienced some increased pressure from short sellers, including New York-based Manuel P. Asensio. Stockwatch will revisit Mr. Asensio in a future article, but will offer a brief introduction here.
Short sellers are widely despised, perhaps particularly by gullible investors quick to blame them for falling stock prices, and Mr. Asensio arguably has more than his fair share of detractors.
In the 1990s, Mr. Asensio gained notoriety for his abrasive, confrontational and high-profile attacks on his short-selling targets, many of which subsequently collapsed completely.
Perhaps somewhat chastened by his own brush with regulators and a number of lawsuits launched by companies irked by his attention and tactics, Mr. Asensio has adopted a more reserved approach in recent years. However, some of his more vocal critics claim that he is the point man for unscrupulous hedge funds and has a too-cozy relationship with some journalists.
Diatribes against Mr. Asensio often overlook the quality of his research and his rather impressive record in sniffing out overvalued companies. While his record is not perfect, Mr. Asensio certainly knows the game.
Short sellers complain that it is difficult to borrow the Timminco shares to establish a short position, which may not be surprising given that the company's two largest shareholders control almost 70 per cent of its stock.
AMG Advanced Metallurgical Group N.V., which is also headed by Mr. Schimmelbusch, owns approximately 52.56 million Timminco shares representing 50.5 per cent of the outstanding stock. Sprott Asset Management controls approximately 17.7 million shares or 17 per cent of Timminco's stock.
Notwithstanding the difficulty in locating shares to borrow, there was a reported short position of almost 3.1 million shares as of April 30, an increase of approximately 1.9 million shares since April 15.
Interestingly, the jump in the short position to an all-time high of approximately 3.1 million shares between April 15 and April 30 coincides with a spate of largely unflattering news reports about Timminco.
If there is a causal relationship between the increase in the short position and the unusual media coverage, the directionality is an open question.
In any event, recent news reports have raised questions about some of Timminco's key players and, among other things, made at least passing reference to the company's secret proprietary process for producing solar silicon.
The recent unflattering coverage contrasts sharply with the many boosterish puff pieces dating back to early 2007 served up by the same media outlets now taking a poke at Timminco.
Sunny days
Shortly after Timminco entered the bubbling solar silicon market last year, major Canadian newspapers including The Globe and Mail and the National Post began marking its meteoric rise with upbeat reports.
The Financial Post was out of the gate early with an April 10, 2007, report by Peter Koven noting that two announced Timminco solar silicon deals gave the first indication that the company was capable of producing high-grade silicon. Timminco's share price had quadrupled from 65 cents per share to $2.85 per share in the first 10 days of April and was heading much higher.
On May 10, 2007, The Globe and Mail chimed in with reporter Allan Robinson tagging Timminco as a solar energy play because of its development of a low-cost, proprietary purification process to upgrade its chemical-grade silicon for solar applications.
The Globe's Mr. Robinson noted that Clarus Securities analyst Robert Catellier, who had a $6 target for Timminco, thought there could be "potentially explosive earnings growth." At the time, Timminco was changing hands for $3.75 per share and was headed much higher than Mr. Catellier's early target.
The National Post joined the celebration with a June 22, 2007, report by Sonita Horvitch noting that Marquest Investment Counsel partner Gerry Brockelsby was recommending Timminco.
Ms. Horvitch reported in her Buy & Sell column that the company had a proprietary technology to upgrade commodity-grade silicon to the 99.999-per-cent purity level required for use in solar panels. Timminco was then trading at $5 per share and still heading north.
The Globe's Maureen Darrigo followed up two days later with the report of a bullish recommendation from Leeward Capital Management's chief executive officer Brendan Kyne as Timminco was pushing through $5.50 per share and continuing its upward trajectory.
The enthusiasm continued as the Post's Grant Surridge, writing in Trading Post, reported that participants at a solar-energy conference in Germany predicted a looming shortage in the supply of high-quality silicon wafers used in solar cells and the Globe's Mr. Robinson added a July 18, 2007, report that Timminco should benefit from strong demand for silicon.
The upbeat news reports picked up again in the fall with the Globe's Joanna Smith reporting that Timminco had already sold out the full annual production from the silicon facility it had not even finished building yet.
"These guys are winning business left, right and centre," Paradigm Capital Inc. analyst Marvin Wolff reportedly told Ms. Smith on Sept. 7, 2007.
According to Ms. Smith's report, Mr. Wolff had a target of $13 for Timminco and Clarus Securities Inc.'s Carolina Vargas was beating the drum with a $13.50 target. Timminco was trading at $9.15 per share at the time.
Just a few days later, the Globe's Richard Blackwell reported that Paradigm Capital's bullish Mr. Wolff had upped his target to $18 per share, projecting revenue of $880-million by 2010.
By Sept. 21, 2007, Sprott Growth Fund manager Peter Hodson was reportedly telling the Globe's Ms. Darrigo that Timminco "has the potential to be a $50 stock before 2010."
On Sept. 25, 2007, Ms. Darrigo followed up with a report that Leeward Capital's Mr. Kyne was still recommending Timminco. At the time, the stock was changing hands for $11.50 per share.
The bullish reports continued as Timminco broke through $15 per share in early December of last year and the Globe's Angela Barnes reported that Paul Mesburis of Mavrix Sierra Equity Fund thought the stock could go much higher over the next year.
On Dec. 18, 2007, the Globe's Ms. Darrigo chimed in again with a report that Leeward Capital's Mr. Kyne was just as keen as ever on Timminco.
"Timminco is the top supplier of silicon to the solar industry," Mr. Kyne reportedly told Ms. Darrigo. If Mr. Kyne did make that claim, he is wrong.
Before the end of December of last year, Timminco was trading above $18 per share and, with a few bumps along the way, it continued to move upward in the early part of this year.
On March 27, Timminco's stock price surged past $25 per share on the announcement of a deal to supply solar-grade silicon to Germany's Q-Cells AG, the world's largest supplier of solar cells.
The Globe's David Berman remarked on the price jump in a March 28 article, noting that Timminco had climbed more than 3,900 per cent over the past 12 months.
Mr. Berman went on to report that Cormark Securities analyst MacMurray Whale had a "reduce" recommendation on the stock with a target of $19.50, while National Bank Financial analyst Rupert Merer contented himself with a "sector perform" and target price of $24 per share.
Meanwhile, bullish Clarus Securities analyst Mr. Catellier reportedly still had a buy recommendation on the stock with a new target price of $40 per share.
The largely celebratory puff pieces that traced the trajectory of Timminco's rocketing share price while parroting bullish analysts, offered little, if anything, in the way of probing questions about the company's share structure, insiders, associated companies or the secret proprietary technology that effectively renders its solar-grade silicon production a black-box project.
The tone of the media coverage changed abruptly and dramatically in late April.
Storm clouds
Interestingly, the first significant thunderhead to appear on Timminco's previously sunny horizon formed south of the border in an April 21 Barron's article written by Bill Alpert. Like many Canadian companies, Timminco trades in the so-called "grey market" in the U.S., but the volume is minuscule compared with the trading on the TSX.
The title of Mr. Alpert's two-page Barron's article, "Timminco Generates More Heat Than Light," anticipates the tenor of the piece.
Mr. Alpert opened his article by remarking that a recently announced public offering of Toronto-based Sprott Asset Management could make its founder, Eric Sprott, a billionaire. According to Mr. Alpert, Mr. Sprott owed a lot of that "good fortune to his firm's huge stake in a single stock called Timminco," the TSX's star performer for 2007.
"The justification for Timminco's share appreciation is supposed to be its invention of a low-cost way to purify the silicon needed for the booming solar-cell market," Mr. Alpert wrote. "But so far, the evidence for Timminco's breakthrough appears in PowerPoint slides, not financial reports."
Mr. Alpert also took aim at Timminco's largest shareholder, AMG, which is headed by Mr. Schimmelbusch and founded by his private equity firm Safeguard International Fund.
The Barron's writer reported that, in a clever exit strategy designed by Mr. Schimmelbusch, Safeguard shareholders managed to cash in on Timminco without hurting its share price by unloading shares of AMG, which is listed on Amsterdam's Euronext exchange.
Among other things, Mr. Alpert also raised questions about Timminco's touted proprietary technology.
"Timminco clearly has a lot to prove," Mr. Alpert wrote.
On the same day that Mr. Alpert's Barron's article appeared, the Financial Post's Barry Critchley more blandly reported that Timminco had its share of detractors, too.
According to the Post's April 21 article, National Bank Financial left its target at $24 even as Timminco blew through $28 per share and Cormark Securities had a bearish "reduce" recommendation with a $19.50 target.
On April 22, in a triple-bylined article led by Andy Hoffman, the Globe weighed in with its rather belated peek at how Timminco's former majority shareholder Safeguard International had transferred its holdings to Amsterdam-based AMG and then cashed in through that company's initial public offering and subsequent stock sales to the tune of $390-million.
On the same day, the Globe's Ms. Martin reported in the BNN Market Call column that Lawrence Asset Management president Ravi Sood had taken a short position in Timminco.
"It's not a question of whether or not it's overvalued," Mr. Sood reportedly told the Globe. "Is the stock even worth a dollar or two? Our firm is short Timminco."
The Globe's Andrew Willis also had a few words about Timminco on April 22, noting that it was a tricky short because there were simply no shares to borrow. According to Mr. Willis, that was prompting some muttering in hedge fund circles about long-term investors being unwilling to lend their stock and add fuel to the short sellers' fire.
No matter what the reason for the scarcity of stock, Mr. Willis suggested, a few frustrated short sellers will not influence events.
"Preventing borrowing doesn't change fundamentals that dictate the price of Timminco," one trader reportedly remarked. "It just stops the shorts from profiting on any decline."
On April 23, the Globe's Fabrice Taylor piled in with his examination of the Timminco/Safeguard/AMG controversy.
"Maybe Timminco's revolutionary silicon process will work out and make investors filthy rich," Mr. Taylor wrote. "Maybe it won't.
"One thing is for sure though: The people running the show aren't going to wait around to find out, at least not with all their skin in the game.
"Shareholders would be well served to watch what these people are doing."
Mr. Taylor went on to lament that slack disclosure requirements make it difficult to keep up with what insiders are doing.
"Fact is the people who control the company are highly conflicted and have been liquidating their position furiously," Mr. Taylor stated before going on to offer his sketch of Mr. Schimmelbusch's shrewd exit strategy for Safeguard through AMG.
The storm clouds continued to roll in as the Post's Mr. Critchley drew connections between Mr. Schimmelbusch and the former president of Timminco, John Walsh, and now-struggling Alberta company Ceramic Protection Corp.
In April 25 and April 29 articles, Mr. Critchley reported that Mr. Schimmelbusch was the head of Allied Resource when that company sold Alanx Wear Solutions to Ceramic in 2004. Mr. Walsh, a former senior executive at Alanx, became president of Ceramic before moving on for a stint at Timminco.
Ceramic's stock price rocketed above $25 per share and continued to perform fairly well until September of 2006 when Arizona-based ArmorWorks cancelled a supply agreement with the company, provoking a legal battle. The lawsuits have been settled, but Ceramic is now languishing at approximately $2.35 per share.
Mr. Critchley suggested that Timminco shareholders will want to avoid Ceramic's fate.
Over the next few days, both the Globe and the Post published articles about insider transactions by Timminco executives, including the granting of some very lucrative stock options and some rather timely, perhaps even suspiciously so, stock purchases by the company's former president and chief executive officer, Mr. Walsh.
Lost amid the recent thundering about Timminco in the Canadian media is the fact that much of what is causing all the hand-wringing could have been could have been revealed long ago, if, instead of all the hand-clapping over the TSX's solar darling, an editor or even an inquisitive reporter had paused to take an earlier peek beneath the covers.
For example, while Mr. Schimmelbusch did not take out a full-page ad to explain his very crafty exit strategy for Safeguard, disclosures by Timminco regarding the share movement between Safeguard and AMG, coupled with the latter's initial public offering prospectus and subsequent disclosures, trace it all out rather well.
In other words, if any of the market seers at the Globe or the Post had bothered to take a look while their colleagues were regularly pumping out puff pieces about the TSX's soaring solar play, Mr. Schimmelbusch's clever exit strategy could have been revealed a year ago.
Interestingly, while a number of Canadian journalists have some experience with covering black-box projects, perhaps most notably in connection with mining plays, little more than passing mention has been made about Timminco's secret proprietary process for turning metallurgical-grade silicon into much more valuable solar-grade silicon.
Notwithstanding the fact that there has not been much in the way of very pointed questions about its touted technology, Timminco evidently has some concerns about the investing public's confidence in its secret proprietary process.
Just ahead of releasing its first-quarter results and subsequent conference call on May 8, Timminco tried to dispel some of the gloomy effects of the recent stormy media coverage by announcing that it had received an operational review report from an outside consultant.
Photon rays
On May 8, Timminco announced that it had received an operational review report on its solar-grade business at Becancour based on a one-day visit by a Photon Consulting team led by Michael Rogol.
"Timminco commissioned the report to support due diligence efforts for strategic discussions beyond normal supplier-customer relationships that are continuing with potential partners," the company reported.
In a subsequent conference call to discuss the company's first-quarter results, Mr. Schimmelbusch rather more candidly indicated that the operational review was a response to public questions about Timminco's secret proprietary technology.
According to Mr. Schimmelbusch, some of Timminco's critics were now running for cover. It is not clear whether Timminco's leader was serving up a pun relating to short sellers, but there is little doubt that Mr. Schimmelbusch knows the game.
"The Photon Consulting team was given full access to the solar-grade silicon production facility, and to information relating to accounting procedures, research and development efforts, human resource needs, intellectual property and technical processes that the team requested to prepare its report," Timminco reported in its news release.
During the conference call, Mr. Schimmelbusch remarked that Photon had such open access that some of Timminco's employees were even a bit nervous about the disclosures they were making, though they reportedly co-operated fully with Mr. Rogol and his team.
"Operations and processes have potential for massive growth and, possibly, for reshaping the silicon industry," Mr. Rogol gushed in Timminco's upbeat news release.
"The equipment is very impressive, very low cost, beyond polyscale," Mr. Rogol continued. "In interviews, several customers have reported cell efficiencies above 14 per cent and some above 15 per cent utilizing 100-per-cent (unblended) solar-grade silicon from Becancour."
During the May 8 conference call, Timminco would not disclose just how much it paid Mr. Rogol to conduct the one-day walkabout and prepare the operational review report.
The company has scheduled another conference call for May 14 to discuss the conclusions of boosterish Mr. Rogol's apparently stellar report. An executive summary of the report will be made available prior to the call.
Meanwhile, perhaps basking in the anticipated rays of Photon's report, Timminco continues to be a busy trader on the TSX. With more than 5.27 million shares valued at $127-million changing hands, Timminco gained $1.60 to close at $24.60 on May 13.
Comments regarding this article may be sent to lwebb@stockwatch.com.