Energy Summary for Feb. 1, 2018

by Stockwatch Business Reporter

West Texas Intermediate crude for March delivery gained $1.07 to $65.80 on the New York Merc, while Brent for March gained 60 cents to $69.65 (all figures in this para U.S.). Western Canadian Select traded at a discount of $27.70 to WTI ($38.10), unchanged. Natural gas for March lost 14 cents to $2.86. The TSX energy index gained a fraction to 185.49.

B.C. Montney gas producer Painted Pony Energy Ltd. (PONY) lost 15 cents to $2.19 on three million shares, after announcing that it produced 52,500 barrels of oil equivalent a day in the fourth quarter of 2017. This result is up from 42,350 barrels a day in the third quarter and from 23,200 barrels a day in the full year 2016. In the fourth quarter of 2017, Painted Pony was forced to shut in production of 8,000 barrels a day because of low gas prices. It is now producing 60,000 barrels a day.

Despite boosting production, Painted Pony's stock has fallen to today's $2.19 from about $8 in the past year. Surely, one factor has been the persistently low Canadian gas prices. As well, shareholders likely did not appreciate the ambitious company's lowering of its production target and capital budget several times last year. Painted Pony also increased its debt to $279.6-million as of Sept. 30, 2017, from $228.5-million at the end of 2016. (Longer-term shareholders will remember that in early 2015, the company had no debt, and it looked forward to boosting production to 100,000 barrels a day by 2018. Now, Painted Pony aims to produce between 61,000 and 63,000 barrels a day for the year.) Finally, in May, 2017, Painted Pony completed an unpopular acquisition, that of its Montney neighbour, UGR Blair Creek. The acquisition and a related financing raised Painted Pony's share count to more than 160 million from 100 million.

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