OT - UTS - ReutersUTS Energy shares soar in heavy volume
Wed Aug 30, 2006 4:42 PM EDT168
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CALGARY, Alberta (Reuters) - UTS Energy Corp. (UTS.TO: Quote) shares rose 11 percent in heavy volume on Wednesday, a jump analysts said may be related to recent gains by rival Western Oil Sands Inc. (WTO.TO: Quote).
Shares in UTS, which holds a 30 percent stake in Petro-Canada's (PCA.TO: Quote) planned Fort Hills oil sands project, climbed 47 Canadian cents to C$4.92 on the Toronto Stock Exchange. Nearly 21.6 million shares changed hands, more than eight times the average daily volume over the past three months.
UTS was the most active issue on the TSX on Wednesday, with Western Oil Sands second.
Analysts said the heavy trading in UTS is related to a surge of interest in rival Western Oil Sands, which also holds a minority stake in a northern Alberta oil sands operation.
Western stock has gained nearly 11 percent in the past three sessions on the TSX, rising C$1.30 to C$30.20 on Wednesday with 13.2 million shares traded, more than 12 times the average.
Greg Pardy, an analyst at Scotia Capital, said in a research note on Tuesday that Western shares were rising on takeover speculation and rumors the company could face a shareholder revolt because it has agreed to explore for oil in northern Iraq.
Mark Friesen, an analyst at FirstEnergy Capital said on Wednesday that investors may be moving to UTS because of its similarity to Western Oil Sands and because the shares, 40 percent below the year-high of C$7.99 set in February, may be considered undervalued.
"UTS has gotten hit pretty hard, perhaps unduly so, and it looks attractive from that perspective," said Friesen.
Will Roach, president of Calgary-based UTS, said the company had no explanation for the surge in its shares and had no pending announcements.
"It is huge volume," Roach said. "I'm not certain I understand it since there is no new news from us."
($1=$1.11 Canadian)
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