Ontario government wields budget axe

The chase by Marty Cej:

Ontario Premier Dalton McGuinty last night delivered the toughest budget seen in years in a bid to convince financial markets and credit-rating agencies that his government has a handle on the province's finances. Premier Scissorhands' plan promises expenditure cuts of almost $18 billion over the next three years, frozen public sector wages and no corporate tax cuts. Finance Minister Dwight Duncan says the measures will balance the budget by 2017-18, making it the slowest of Canada's 10 provinces to do so. At the very least, investors can expect a jump in provincial bond issuance over the next few years. We'll need to take a closer look at the implications of the Ontario budget for the federal budget, to be released Thursday.

We'll be taking a close look at gold today with the publication of the CPM Gold Yearbook for 2012. The 278-page document contains a review of 2011 and outlook for 2012 and beyond, analysis of investment demand, fundamental demand, supply, official transactions and price data. It also includes 25 pages of sponsor thank-yous, but we'll skip right on past those. Jeffrey Christian, CPM Managing Director, joins us at 10:30 am Eastern. And when you're talking hard currencies, you gotta put on the hard tunes. We'll use some classic Rage Against the Machine for the intro and outro; it strikes the right balance between goldbugs' vision for a violent dystopian future and an aggressive bass line.

I should also note that Goldman Sachs today shifted its commodity recommendations to "neutral" from "overweight" as "most commodity markets have reached [Goldman's] near-term targets." However, Goldman reiterated its long positions for WTI crude and gold, arguing that gold should climb to its 12-month target of $1,950 as the Fed eases policy again later this year.

Pescod Interviews Bankers Pet CEO

To Read The Entire Interview Click Here For The Safe PDF

Bankers Pet operational update:Triples Income

By The Canadian Press CALGARY - Bankers Petroleum Ltd. (TSX:BNK.TO - News) earned net income of US$35.9 million in 2011, more than tripling its net income of US$10.5 million in 2010.Oil sales averaged 12,784 barrels of oil per day in 2011, an increase of 33 per cent over 2010 levels, the Calgary-based company focused on heavy oil assets in Albania said Tuesday.Capital expenditures were US$242.8 million, more than double the $119.7 million it spent in 2010.In the fourth quarter of 2011, Bankers Petroleum had net income of US$281,000 versus $4.6 million in the same quarter of 2010.

The company drilled 84 wells in 2011, including 76 horizontal production wells, two vertical delineation wells, two cyclic steam horizontal wells and four water disposal wells. In 2010, a total of 55 wells were drilled.For 2012, the company said it's capital expenditure program will be $215 million, funded from projected cash flow based on an average Brent oil price of US$90 a barrel.Bankers Petroleum said it expects to drill 100 horizontal and vertical wells and complete 60 well reactivations at the Patos-Marinza oilfield.

The company has said its most recent evaluation shows a 43 per cent year-over-year increase in proven reserves.As of Dec. 31, Bankers had 172 million barrels of proven reserves, representing more than 12 times production replacement. Proved plus probable reserves totalled 267 million barrels, a 12 per cent increase from Dec. 31, 2010.

And yet the stock sits at 4.15 because shorts punish great news, go figure.

Bankers Petroleum earns $35.99-million (U.S.) in 2011

Bankers Petroleum earns $35.99-million (U.S.) in 2011

2012-03-20 08:16 ET - News Release

Mr. Robert Cross reports

BANKERS PETROLEUM ANNOUNCES 2011 FINANCIAL RESULTS

Bankers Petroleum Ltd. has provided its 2011 financial results and outlook for 2012. All figures are shown in U.S. dollars, unless otherwise specified.

In 2011, Bankers accomplished several key achievements including record production, reserves, net income and cash flow. The Company also invested $243 million, making it the largest annual capital expenditure in Albania.

PRODUCTION RESULTS
2011 2010

Average production (bopd) 12,784 9,597
Average price ($/barrel) 72.84 48.64
Netback ($/barrel) 36.36 23.15

Highlights of the key achievements in 2011 include:

Oil sales averaged 12,784 barrels of oil per day (bopd), an increase of 33% compared to 2010, as a result of the Company's ongoing horizontal drilling program and continuation of well reactivations.

The original-oil-in-place (OOIP) resource assessment in Albania increased by 3% to 8.0 billion barrels from 7.8 billion barrels. Reserves increased on a proved basis by 43% from 120.2 million barrels in 2010 to 172.4 million barrels in 2011 and by 12% on a proved plus probable basis from 237.6 million barrels in 2010 to 267.1 million barrels in 2011. Additionally, the Company's independent reserves engineers assigned contingent and prospective resource oil estimates of 1.0 billion and 614 million barrels, respectively. The corresponding net present value (NPV) after tax (discounted at 10%) of the proved plus probable reserves remained consistent at $2.0 billion from 2010 to 2011.

Capital expenditures were $242.8 million, a 103% increase from 2010 of $119.7 million. During the year, Bankers contracted a fourth and fifth drilling rig. The Company drilled 84 wells during 2011, including 76 horizontal production wells, two vertical delineation wells, two cyclic steam horizontal wells and four water disposal wells. In 2010, a total of 55 wells were drilled.

New export market agreements for 2012 have been completed representing an overall export average price of 72% of the Dated Brent oil benchmark. ARMO, the Albanian refinery, also agreed to purchase Patos-Marinza crude in 2012 for an average price of 66% of Brent, which approximates the same netback value as the export market due to lower transport costs and having no port fees. The 2012 pricing agreements represent an average 7% increase over the 2011 Patos-Marinza oil price.

Construction of phase one of the crude oil sales pipeline, which connects the Patos-Marinza oilfield to the Fier Hub facility was completed. Operations commenced in the first quarter of 2012. Social and environmental impact assessments for the second phase of the pipeline, from the Fier Hub to the export terminal at Vlore, are underway.

With the ongoing reactivation and recompletion program expanding on the north side of the river, as well as the expected expansion of the drilling towards the north, the Company has constructed and completed a bridge crossing the Seman River to enable more efficient access for drilling and servicing equipment as well as fluid transportation.

The Company has completed expansions of the central treatment facility (CTF) and increased the CTF capacity to 25,000 bopd.

During 2011, Bankers continued with its environmental initiatives and completed the pilot remediation project in Sector 3. The project targeted the clean-up of old infrastructure and removal of legacy oil spills testing mechanical waste separation, thermal desorption, and bio-remediation technologies. Larger scale clean-up processes are scheduled for implementation in 2012.

Block "F" contains several seismically defined structural and stratigraphic amplitude anomalies prospective for oil and natural gas. The first exploration location has been selected and land access is underway along with environmental permitting to commence surface lease construction. The well is expected to be spud in April 2012.

Bankers proceeded with the thermal pilot program during 2011, drilling two horizontal wells and a vertical well, along with installation of the steam generator. Steam injection commenced in December, 2011.

The Company continues to maintain a strong financial position at December 31, 2011 with cash of $54.0 million and working capital of $80.3 million. Cash and working capital for December 31, 2010 was $108.1 million and $130.9 million, respectively.

Operational Update Click Here

Wall Street is back

The chase by Marty Cej:

The U.S. Federal Reserve yesterday released the results of stress tests applied to 19 major U.S. banks, trials designed to test the banks' abilities to maintain adequate credit levels in the face of a recession more severe than the one most recently experienced. The results were scheduled to be released to the public Thursday but some of the banks, who received their report cards early, couldn't help themselves and starting jumping up and down in the playground like sixth-grade eggheads, screaming "I got an A in this, an A in that, and another A in that… whadjoo get? Whadjoo get?"

Some 15 of the 19 banks tested passed, resulting in huge dividend hikes from JPMorgan Chase, Wells Fargo, BB&T and others. The four banks who slouched off to tell their parents they were being held back this year were Citigroup, Metlife, Suntrust and Ally Financial. Citigroup has already vowed to try again, but we've heard it all before. It's just the same old story, isn't it? Is it our fault? Did we do something wrong? Well, Citigroup can just forget about going to see The Hunger Games on opening night. We'll talk about the surprises, the tests and whether it's time for Canadian investors to take another hard look at the U.S. financials.


One of the financials that will be getting a bit more attention today is Goldman Sachs after a scathing attack in The New York Times by a senior manager who says he will resign today. Greg Smith, an executive director and head of Goldman's U.S. equity derivatives business in Europe, the Middle East and Africa, says that firm's environment after his 10 years there is "as toxic and destructive as I have ever seen it."

Smith says that the culture of the company he joined years ago, a culture that "revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients," had eroded and devolved into an environment where if "you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence." Is this a PR disaster for Goldman? Just another swipe at a successful firm from a disgruntled employee? There is plenty to work with here. Business Day AM is chasing Smith.


In the meantime, European stocks are higher and stock index futures are pointing to early gains on the back of the Fed's renewed confidence in the U.S. banking sector and also reports that China is easing restrictions on lending at three of the country's biggest banks in a bid to reverse a decline in loan demand.

Canada singing labour market blues

Canada singing labour market blues
The chase by Marty Cej:

The Canadian economy shed 2,800 jobs last month, countering expectations for a gain of 15,000 and bringing the number of jobs lost since the end of September to 37,000. Sure, the unemployment rate dropped to 7.4 percent from 7.6 percent, but that was due to 37,900 people deciding to give up on looking for a job. Forget about the unemployment rate in this report, Scotia Capital's economic team told clients this morning, the surprise decline "is a total head fake." The details of the job losses and meager gains were as lackluster as the headline with young workers -- aged 15 to 24 -- registering a tumble of 26,800 positions (15-year-olds? What? Who shut down all the mercury and asbestos mines?). The youth unemployment rate rose to 14.7 percent from 14.5 percent! With March break upon us and high school and university students sending out resumes and CVs,

I'd like to see us do more with the youth component of the report. BMO's Doug Porter concludes that while the overall report "isn't as ugly as the headline dip in employment, the main message is that the domestic economy is now clearly struggling to post meaningful growth." TD economist Diana Petramala is more pointed, arguing that the weakness in employment since mid-2011 reflects "a small crisis of confidence." Just about every category of the jobs report represents a fresh angle. And let's be sure to use the Bank of Canada's less pessimistic tone yesterday to frame our coverage today.

It was a different story in the U.S. where the economy added 227,000 jobs last month, topping the 210,000 average expectation and marking the strongest six months of jobs growth since 2006. I think I just heard several Republican-candidate penny-loafers kick over several wastepaper baskets. U.S. stock index futures are heading higher.

Among the risks facing the Canadian economy -- European debt crisis, sluggish U.S. growth, vegans -- the one that seems to be getting the most attention from the Bank of Canada and the Ministry of Finance is household debt and an overheated housing market. Even the CEOs of Canada's biggest banks agree that the housing market could stand to chill out just a wee bit.

But that isn't great for business so the banks decided to cut their mortgage rates this week in an attempt to juice a market that some say has already done enough steroid cycles. More needs to be done on the Canadian housing market, the Mortgage Wars (flash of lightning, brief crash of thunder) and the coming budget.

Speaking of the budget, Prime Minister Stephen Harper and Finance Minister Jim Flaherty are scheduled to make an announcement at Toronto's wee island airport, called Billy Bishop Toronto City Airport. They are expected to say something about the creation of a tunnel from the "mainland" to the island, a project that would cut the six-minute commute by ferry in half. Can you imagine? It'll be like Canada's own Channel Tunnel, or Chunnel, only we'll combine Toronto and Tunnel to create, ummmm, the Tunnel! Anyhow, Harper and Flaherty will likely take questions. We'll be there.

Financial markets have greeted the biggest sovereign debt restructuring in history with a resounding "meh." For consistency in our coverage of the details, I'll turn to the fixed income teams at Goldman Sachs and Investec Bank Plc in London, whose job it is to analyze the swap operations for clients and their own prop desks: Full tenders and consent to change terms were given for 85.8 percent of securities. Collective Action Clauses will be triggered bringing the total participation rate to 95.7 percent. We can note in conversation that 69 percent of foreign law bonds were tendered and the 95.7 percent total participation rate reflects the collective action clauses being invoked here as well.

What remains to be seen is whether all the cajoling, coercing and collective-actioning will result in billions of dollars of aid making its way to Athens. German Finance Minister Wolfgang Schauble said a few moments ago that hope is growing that euro-zone risk is under control but that European finance ministers will decide on the distribution of Greek aid next week. Presumably, Europe's finance ministers have better things to do today, this being Friday. Auf wiedersehen.
Every morning Managing Editor Marty Cej writes a "chase note" to B

Bankers Pet Ready To Move Up On Jump In Oil

Bankers Petroleum Ltd (2)
Symbol	C : BNK
Shares Issued	247,697,769
Close 2012-02-13	C$ 4.98
Recent Sedar Documents

Bankers Petroleum year-end reserves at 267 mmbbl P+P

2012-02-13 08:18 ET - News Release

This item is part of Stockwatch's value added news feed and is only available to Stockwatch subscribers.

Here is a sample of this item:

Mr. Abby Badwi reports

BANKERS PETROLEUM ANNOUNCES 2011 RESERVES REPORT; PROVED RESERVES (1P) INCREASE BY 43% AND PROVED PLUS PROBABLE (2P) BY 12%

Bankers Petroleum Ltd. has provided the results of its Dec. 31, 2011, independent reserves evaluation. The company has had another consecutive year of reserves additions since company inception in 2004.

Evaluations were conducted by RPS Energy Canada Ltd. for the Patos-Marinza oil field, Albania, and by DeGolyer and McNaughton Canada Ltd. for the Kucova oil field, Albania, and were prepared in accordance with Canadian National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities.

Total company reserves summary

• Proved reserves (1P) of 172 million barrels (43-per-cent increase from Dec. 31, 2010) representing over 12 times production replacement;
• Proved plus probable reserves (2P) of 267 million barrels (12-per-cent increase from Dec. 31, 2010);
• Proved, probable and possible reserves (3P) of 426 million barrels (unchanged from Dec. 31, 2010);
• Original oil-in-place resource estimate (P50) of eight billion barrels (3-per-cent increase from Dec. 31, 2010);
• 2011 average production was 13,051 barrels of oil per day for an annual total of 4.8 million barrels (3 per cent of proved reserves);
• Reserves life index is 30-plus years.

Short History

		Symbol	Report Date	Volume	Change	% of Float
		BNK - T	2012-02-28	20,004,938	-629,693	8.06
		BNK - T	2012-02-15	20,634,631	84,362	8.32
		BNK - T	2012-01-31	20,550,269	459,007	8.30
		BNK - T	2012-01-15	20,091,262	-676,840	8.12
		BNK - T	2011-12-31	20,768,102	-314,090	8.39
		BNK - T	2011-12-15	21,082,192	207,457	8.52
		BNK - T	2011-11-30	20,874,735	-269,408	8.43
		BNK - T	2011-11-15	21,144,143	-4,162,961	8.54
		BNK - T	2011-10-31	25,307,104	-1,857,784	10.22
		BNK - T	2011-10-15	27,164,888	1,296,522	10.98
		BNK - T	2011-09-30	25,868,366	-2,287,196	10.45
		BNK - T	2011-09-15	28,155,562	-219,341	11.38
		BNK - T	2011-08-31	28,374,903	47,453	11.47
		BNK - T	2011-08-15	28,327,450	1,875,997	11.45
		BNK - T	2011-07-31	26,451,453	-9,967	10.69
		BNK - T	2011-07-15	26,440,914	1,036,020	10.69
		BNK - T	2011-06-30	25,404,894	481,209	10.27
		BNK - T	2011-06-15	24,923,685	7,888,274	10.08
		BNK - T	2011-05-31	17,035,411	2,400,460	6.90
		BNK - T	2011-05-15	14,634,951	1,982,057	5.93
		BNK - T	2011-04-30	12,652,894	-96,704	5.13
		BNK - T	2011-04-15	12,749,598	2,059,038	5.17
		BNK - T	2011-03-31	10,690,560	1,569,672	4.34
		BNK - T	2011-03-15	9,120,888	2,056,618	3.70
		BNK - T	2011-02-28	7,064,270	1,737,961	2.87
		BNK - T	2011-02-15	5,326,309	-12,657	2.16

House Positions for C:BNK from 20120308 to 20120308

House	Bought	$Val	Ave	Sold	$Val	Ave	Net	$Net
39 Merrill Lynch	121,600	576,494	4.741	19,700	93,459	4.744	101,900	-483,035
7 TD Sec	3,411,048	16,141,677	4.732	3,350,892	15,853,756	4.731	60,156	-287,921
90 Barclays	38,100	180,720	4.743	200	956	4.78	37,900	-179,764
11 MacQuarie	131,500	625,930	4.76	100,000	476,000	4.76	31,500	-149,930
124 Questrade	12,930	61,903	4.788	0			12,930	-61,903
13 Instinet	22,900	107,996	4.716	12,300	58,267	4.737	10,600	-49,729
52 NCP	15,035	71,178	4.734	8,908	42,343	4.753	6,127	-28,835
99 Jitney	49,600	235,162	4.741	44,600	211,408	4.74	5,000	-23,754
2 RBC	27,826	131,902	4.74	23,677	112,619	4.756	4,149	-19,283
83 Mackie	3,000	14,160	4.72	0			3,000	-14,160
14 ITG	947	4,476	4.727	300	1,426	4.753	647	-3,050
101 Newedge	200	942	4.71	0			200	-942
58 Qtrade	20	95	4.75	0			20	-95
25 Odlum	0			130	617	4.746	-130	617
85 Scotia	5,400	25,661	4.752	5,845	27,782	4.753	-445	2,121
19 Desjardins	700	3,329	4.756	1,500	7,065	4.71	-800	3,736
89 Raymond James	0			1,585	7,465	4.71	-1,585	7,465
67 Northern	0			2,000	9,480	4.74	-2,000	9,480
9 BMO Nesbitt	7,700	36,729	4.77	10,475	49,725	4.747	-2,775	12,996
80 National Bank	5,800	27,603	4.759	11,850	56,112	4.735	-6,050	28,509
72 Credit Suisse	0			12,500	59,039	4.723	-12,500	59,039
15 UBS	104,900	500,371	4.77	123,200	587,130	4.766	-18,300	86,759
79 CIBC	84,400	401,257	4.754	106,612	506,262	4.749	-22,212	105,005
65 Goldman	1,468	7,034	4.792	34,800	164,989	4.741	-33,332	157,955
53 Morgan Stanley	4,900	23,344	4.764	42,500	202,384	4.762	-37,600	179,040
33 Canaccord	7,900	37,474	4.744	69,900	334,527	4.786	-62,000	297,053
1 Anonymous	29,900	141,874	4.745	104,300	494,500	4.741	-74,400	352,626
TOTAL	4,087,774	19,357,311	4.735	4,087,774	19,357,311	4.735	0	0