| West Texas Intermediate crude for July delivery added $2.00 to $118.87 on the New York Merc, while Brent for August added $2.11 to $119.72 (all figures in this para U.S.). Western Canadian Select traded at a discount of $18.54 to WTI, down from a discount of $18.01. Natural gas for July added three cents to $8.52. The TSX energy index added a fraction to close at 274.58. Oil prices ended another volatile week with another weekly gain. China allowed major cities to emerge from lockdowns, while OPEC+ agreed to an extra production boost. Neither could calm markets jittery over the EU's Russian energy ban, another big drop in U.S. inventories and (as of today) a potential strike of hundreds of offshore oil workers in Norway. Here in North America, U.S. shale producer Enerplus Corp. (ERF) added 78 cents to $20.19 on 3.59 million shares, going above $20 for the first time since 2014. It had no news today, but it did get a lovely mention this morning from RBC analyst Greg Pardy. The analyst said his recent chat with chief executive officer Ian Dundas "reinforced our confidence in the company's outlook, execution, balance sheet strength and commitment to shareholder returns." Mr. Pardy focused on Enerplus's assets in the North Dakota Bakken. After nearly $800-million (U.S.) in acquisitions during 2021, the company has achieved "comfortable scale and running room" in the Bakken, with about 13 years of core drilling inventory. (Before these deals, a common criticism of Enerplus from investors was that it had too little inventory -- under a decade -- which may be why Mr. Dundas was keen to discuss it with Mr. Pardy.) Turning to non-core assets, such as the ones in Canada, Mr. Pardy reminded readers that Enerplus put its Canadian assets up for sale in February. He sees them fetching $235-million to $350-million, potentially as early as this summer. "[Enerplus] remains our favourite intermediate producer," concluded the analyst, reiterating his "outperform" rating and his price target of $18 (U.S.). (The stock closed at $16.04 (U.S.).) Mr. Pardy also noted that Enerplus is on the "Global Energy Best Ideas" list of his employer, RBC. A different RBC list, specifically its list of disclosures, indicates that RBC "makes a market" in Enerplus's securities and receives compensation for numerous products and services. Further afield, Charle Gamba's Colombian gas producer, Canacol Energy Ltd. (CNE), added five cents to $3.20 on 229,200 shares. Today it provided a monthly operational update and hyped a new exploration well. The news contributed to what has been a delightful week for Canacol, whose stock has risen from $2.75 since Monday. Today's update started out with Canacol's estimate of its monthly gas sales in May, which it pegged at 189 million cubic feet a day (the equivalent of about 33,150 barrels a day). This is its highest monthly total all year and is well within its full-year guidance of 160 million to 200 million cubic feet a day. As well, Canacol boasted that its new exploration well, Alboka-1 on the wholly owned VIM-5 block, has tested at up to 33 million cubic feet a day. The company is now getting ready to spud two more wells as it continues its up-to-12-well program for the year. Investors seemed mildly pleased. Yet the fact that the stock has raced up 45 cents this week may have more to do with politics. Colombia held its first round of presidential elections last Sunday. As discussed last week, pre-election polls gave a modest lead to the left-leaning former guerilla Gustavo Petro, who is not a favourite of the energy sector (he has proposed to halt new oil exploration). He won 40 per cent of the vote on Sunday and will advance to the next round on June 19. This was no surprise. The surprise was that the second-place winner on Sunday was third-place-poller Rodolfo Hernandez, a businessman seen as more friendly to the industry. The one who was projected to face off against Mr. Petro, Federico Gutierrez, has thrown his support behind Mr. Hernandez. Their combined share is 52 per cent, which will be enough to keep Mr. Petro out of the president's office if the numbers do not change too much by June 19. Investors seem hopeful. Other Colombian energy stocks that took a jump on Monday (although some of them have since given some of the gains back) included Parex Resources Inc. (PXT: $28.85), Frontera Energy Corp. (FEC: $13.73) and Gran Tierra Energy Inc. (GTE: $2.34). One of the above companies, Gabriel de Alba's Frontera Energy Corp. (FEC), today lost 16 cents to $13.73 on 169,300 shares, after announcing the sudden departure of its chief financial officer. Alejandro Pineros is leaving "to pursue other career opportunities." Mr. Pineros joined Frontera in 2017 (shortly after Frontera became Frontera, emerging from the bankrupt 2016 ashes of what was formerly Pacific Exploration) and became its CFO in 2020. The company thanked him today for steering its finances through the COVID downturn into the current recovery. Replacing Mr. Pineros as CFO will be Rene Burgos, a director of Frontera, although he is stepping down from the board in order to accept his new job. The 42-year-old Mr. Burgos joined Frontera's board in December, 2019. He has previously worked in financial roles for Compass Group, CarVal Investors, Deutsche Bank and Bank of America. Mr. de Alba, Frontera's chairman, expressed confidence that Mr. Burgos will "seamlessly excel in this critical role." Back in Canada, four energy companies -- two producers and two service firms -- had some lovely news to end the week. The S&P/TSX Composite Index announced the results of its latest quarterly rebalancing today after the close. Of the six companies joining the index, four are in the energy sector. They are Athabasca Oil Corp. (ATH: $3.06), Spartan Delta Corp. (SDE: $15.10), Precision Drilling Corp. (PD: $103.48) and Pason Systems Inc. (PSI: $16.75). The changes will take effect at the open on Monday, June 20. Index additions create buying support from index-tracking funds. These have been buying a lot of energy stocks lately, as the S&P/TSX Composite Index has now added 16 of them in just nine months. It started with Birchcliff Energy Ltd. (BIR: $11.65) last September, followed by nine more in December and two more in March. This is a pleasing trend for the formerly bedraggled sector. In late 2020, energy's weighting in the index was just 11 per cent; now that figure is 19 per cent. It still has a good distance to climb back to its 2010 weighting of 25 per cent. |