CALGARY, Sept. 11 /CNW/ - The stock prices of mid-sized oil and natural
gas companies have been outperforming the market since the spring, a report
released today shows.
While junior and senior oil and gas players have kept pace with the
overall index, intermediate companies have been shining stars. The latest iQ
Report by Bryan Mills Iradesso, a national communications firm, shows that the
average intermediate increased 40 percent from April through August including
dividends and distributions. This compares with a return over the same period
of 25 percent for the S&P/TSX Composite Index, 21 percent for the S&P/TSX
Capped Energy Index of senior players and 21 percent for the iQ Report's list
of junior players.
The iQ Report tracks the performance of junior and intermediate oil and
gas companies and trusts that operate primarily in Western Canada and trade on
the TSX or TSX Venture Exchange. The comparison, compiled quarterly and made
available free to investors, defines juniors as companies that produce between
500 and 10,000 barrels of oil equivalent per day (boe/d) and intermediates as
companies that produce between 10,000 and 100,000 boe/d. The latest report
compares the financial and operating results of all 60 juniors and 25
intermediates that met the criteria for inclusion in the second quarter of
2009. Information is also provided on international companies, oil sands
players and emerging producers.
"Investors have returned to the oil and gas sector," said Peter Knapp,
president of Bryan Mills Iradesso and co-editor of the iQ Report. "Almost
everyone who had the courage to average down when times were tough at the
beginning of 2009 is glad they did."
Only one of 25 intermediates lost ground on the stock market from April
through August. Iteration Energy was the lone decliner over this period with a
loss of three percent while Advantage Oil & Gas increased the most at 103
percent. The average junior also gained ground over this period with 47 of the
60 companies in this category heading in the right direction.
Knapp said investors have been attracted to the intermediate players
during the early stages of the global economic recovery because of their
balance of risk and reward. The intermediates offer a 33 percent oil weighting
compared with 24 percent for the juniors, active hedging programs to help
shield investors from volatile commodity prices, and a level of trading
liquidity that allows relatively easy access to funds.
"The juniors could be the next to shine as the economic recovery becomes
firmly established," Knapp said.
Other highlights from the latest iQ Report include the following:
- As a result of mergers and acquisitions, the number of companies
meeting the criteria for inclusion in this edition of the iQ Report
by producing between 500 and 100,000 barrels of oil equivalent per
day in the second quarter of 2009 is down about 30 percent from the
highs reached in early 2006.
- Fifty-seven of 60 juniors and 19 of 25 intermediates reported a loss
in the second quarter of 2009. The good news is that although the net
earnings were ugly, all but five of the juniors and all of the
intermediates reported positive cash flows.
- Median cash flow netbacks for the second quarter of 2009 were $10.25
per boe for juniors and $20.24 per boe for intermediates. This
represents a significant decline since the same quarter of 2008, when
median cash flow netbacks were $38.08 per boe for the juniors and
$37.43 for the intermediates. Cash flow netbacks indicate how much
cash flow a company generates from each barrel of oil equivalent of
Bryan Mills Iradesso's complete iQ Report is available free to the media
and investors who fill out an online form on the following website:
For further information:
For further information: Peter D. Knapp, President, Bryan Mills
Iradesso, 400, 805 - 10th Avenue SW, Calgary, Alberta, T2R 0B4, T: (403)
503-0144 x202, email@example.com, http://iq.bmir.com