Market News: After the Bell

Market News: After the Bell


The close: Uh-oh

RTGAM




So much for the budding stock market rally. North American stocks returned to their losing ways on Wednesday, but with a notable difference: This particular downturn was led by commodities rather than financials.


The commodity-heavy S[amp]amp;P/TSX composite index plunged 415.33 points or 3.2 per cent, bringing the benchmark index to 12,721.37. Among the 252 stocks in the index, 85 per cent fell. It was the biggest one-day dip since the index swooned by 4.8 per cent on Jan. 21, marking what many observers still hope is the bottom of the market.


But while banks got off with a light slap, the drubbing was reserved for the former stars: Potash Corp. of Saskatchewan Inc. fell 7.7 per cent, Barrick Gold Corp. fell 6.7 per cent, Suncor Energy Inc. fell 6.1 per cent and EnCana Corp. fell 4.5 per cent.


Of course, plummeting commodity prices are at the centre of much of the volatility. Gold futures, which crossed the $1,000-an-ounce threshold just last week, fell to $944.40 an ounce in New York, down $37.84. Crude oil fell to $104.48 a barrel, down $4.94.


The Canadian dollar, which has had a tendency to track commodity prices, was also walloped. In late afternoon trading, it fell by 2.3 cents (U.S.) to 98.5 cents, its biggest one-day drop since November.


In the United States, the Dow Jones industrial average closed at 12,099.66, down 293 points or 2.4 per cent, erasing most of Tuesday's gains. There, 29 of the 30 stocks in the blue-chip index fell. Commodity producers were the biggest losers, with Alcoa Inc. falling 7.7 per cent, Chevron Corp. falling 4.9 per cent and Exxon Mobil Corp. falling 5.6 per cent.


The financials, which had been in recovery mode until the afternoon, turned south, although the losses were fairly tame. Citigroup Inc. fell 1.5 per cent and JPMorgan Chase [amp]amp; Co. fell 0.6 per cent.


Meanwhile, the broader S[amp]amp;P 500 closed at 1298.52, down 32.22 points or 2.4 per cent. Monsanto Co., which has been one of the go-to names for investors wanting exposure to the booming agriculture business, plunged 11.8 per cent, epitomizing the rush out of commodity-related investments.


"The important thing to keep in mind is that this is just one trading session," said Andrew Pyle, an investment executive at Scotia Capital. "Commodity plays are safe if funds don't start to exit en masse on the view that global growth is slowing. After what we've been through, few will wait to pull the trigger to crystallize profits and this could become a self-fulfilling prophecy for weaker commodity prices going forward."


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Copyright 2001 The Globe and Mail

Petrolifera 2007 revenue increases 27% to US$134mn,

Petrolifera 2007 revenue increases 27% to US$134mn, profits fall - RegionalTuesday, March 18, 2008

Calgary-based Petrolifera Petroleum (TSX: PDP), which operates in South America, made 2007 revenue of Cdn$134mn (US$134mn), up 27% from Cdn$106mn the year before, the company said in a statement.

Net profits for the year fell 21% from Cdn$37.3mn in 2006 to Cdn$29.3mn in 2007.
Revenue growth in 2007 was constrained by the strength of the Canadian dollar relative to the US dollar and the Argentine peso, according to the statement.

"As in 2006, all our growth in 2007 was organic," Petrolifera CEO Richard Gusella said in a conference call with investors. "We accomplished all this with no rigs available in early 2007 and delays in the arrival of contracted rigs."

Energy shortages also affected Argentina throughout the year, he said.

Sales in 2007 increased 34% to 8,279boe/d from 6,171boe/d in 2006.
Production is currently pushing 10,000boe/d because of drilling successes in early 2008, Gusella said, adding output stands at 8,700b/d of oil and 1,000boe/d of natural gas.
Production is expected to rise when the impact of a completed waterflood project is seen in mid-2008.

In 2007, Petrolifera completed 33 new crude oil, two natural gas and three water injector wells in Argentina. The company secured three new concessions in Argentina and three in Colombia during the year, bringing Petrolifera's total land position to 7M undeveloped acres (28,330km2) in Argentina, Colombia and Peru.

Proved 1P reserves increased 28% to 17.8Mboe in 2007 from 12.9Mboe in 2006. Proved, probable and possible 3P reserves were 39Mboe.
The company invested Cdn$111mn in 2007, Cdn$98mn of that in Argentina. The remaining Cdn$12mn went to Peru and Colombia.

Petrolifera plans to invest US$76mn in Argentina in 2008 and has budgeted Cdn$56mn for Peru.

ARGENTINE TAXES

The Argentine export tax hike, which had the effect of capping prices at US$42/b in November 2007, had an adverse impact on investor attitude towards the Argentine oil industry, according to the statement.

"It's a questionable policy as it can only mean shortages and a loss of self-reliance for Argentina in the future," Gusella said.

The company received an average of Cdn$45.51/b for crude in 2007, a 5% drop from Cdn$47.71/b in 2006.

By comparison, WTI averaged US$72.31/b in 2007 and late in the year surpassed US$100/b, while averaging more than US$90/b in 4Q07, according to the statement.
Argentina could be planning to increase the price cap on oil soon, Gusella said.
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