Canadian small caps sparkle in 2003

Gary Park

Petroleum News Calgary correspondent

It was a big year for the little guys in Canada’s oil patch.

A survey of 61 junior oil and natural gas companies showed an average share price increase of 63.5 percent in 2003, with one in four climbing by 100 percent or more.

The survey by Iradesso Communications listed the big gainers as Vaquero Energy, up 274 percent to C$3.10; Connacher Oil and Gas up 272 percent to C$1.60 and Kensington Energy up 216 percent to C$1.42. The losers were Terraquest Energy and Oiltec Resources, both down 46 percent at C$0.27 and C$1.22 respectively and Redwood Energy, off 29 percent at C$0.17. Companies surveyed had third-quarter 2003 production ranging from 500 to 15,000 barrels of oil equivalent per day.

Of the 17 energy trusts that constituted the intermediate sector, distributions to unit holders averaged 18 percent and unit prices rose an average 31 percent, led by Petrofund Energy Trust with a 91 percent total return. Of the six conventional producers who converted to trusts during the year, Peyto Energy Trust showed the way with a total return of 151 percent. The Toronto Stock Exchange S&P/TSX Energy index grew by 3 to end 2003 at a record high of 161. Ivanhoe Energy, a U.S.-based operator listed on the TSE in December, posted a 574 percent gain for the year to reach C$10.40 before sliding back to C$4.85 on Dec. 31. Husky Energy led the domestic integrated majors with a 43 percent rise to C$23.95, followed by Suncor Energy’s 32 percent jump to C$32.50 and Shell Canada’s 24 percent increase to C$61.25.

Drilling stocks had only moderate gains despite the pace of upstream activity. Ensign Resource Service Group led with a 24 percent return to close the year at C$20.60. Akita Drilling added 15 percent for a year-end trading price of C$24.16 and Precision Drilling, Canada’s largest oilfield service company, gained 11 percent to C$56.75.