Nexen Inc. and Talisman Energy Inc. stand to benefit most from a sizeable uptick in oil and natural gas prices last quarter, according to Blackmont Capital. A handful of Canada’s senior producers are set to roll out fourth quarter earnings, starting Wednesday with EnCana Corp. and Nexen. Talisman and Canadian Natural Resources Ltd. report in two weeks.
Trends that shaped results include oil prices rallying 20% from the third quarter and a 12% lift in natural gas prices. Benchmark West Texas Intermediate oil averaged US$90.48 last quarter, a full 51% higher than the same quarter in 2006, Blackmont’s energy team said in a research note.
Countering gains from those higher prices was the loonie’s appreciation next to the U.S. dollar, which cuts into price realizations for Canadian producers. Other negatives include the usual decline in demand and pricing for heavier oil blends over the winter months and a similar seasonal decrease in refining margins.
Blackmont is forecasting earnings per share (fully diluted) for Nexen will jump 43% from 62 cents in the third quarter to 89 cents, while earnings per share (fully diluted) for Talisman should rise 36% between quarters, from 24 cents to 32 cents.
As for EnCana, Blackmont expects earnings per share (fully diluted) of $1.23 in the quarter, down 3% from $1.27 in the previous quarter.
Trends that shaped results include oil prices rallying 20% from the third quarter and a 12% lift in natural gas prices. Benchmark West Texas Intermediate oil averaged US$90.48 last quarter, a full 51% higher than the same quarter in 2006, Blackmont’s energy team said in a research note.
Countering gains from those higher prices was the loonie’s appreciation next to the U.S. dollar, which cuts into price realizations for Canadian producers. Other negatives include the usual decline in demand and pricing for heavier oil blends over the winter months and a similar seasonal decrease in refining margins.
Blackmont is forecasting earnings per share (fully diluted) for Nexen will jump 43% from 62 cents in the third quarter to 89 cents, while earnings per share (fully diluted) for Talisman should rise 36% between quarters, from 24 cents to 32 cents.
As for EnCana, Blackmont expects earnings per share (fully diluted) of $1.23 in the quarter, down 3% from $1.27 in the previous quarter.
Canadian Natural said Tuesday costs to build the first phase of its Horizon oilsands project have risen for a third time in 12 months and will come in almost $2-billion higher than original projections of $6.8-billion.
The company, which like all the others except EnCana has sizeable oil and gas assets outside of North America, should generate earnings per share (fully diluted) of $1.11, down almost 5% from $1.17 in the third quarter, Blackmont said.
The company, which like all the others except EnCana has sizeable oil and gas assets outside of North America, should generate earnings per share (fully diluted) of $1.11, down almost 5% from $1.17 in the third quarter, Blackmont said.
Source: National Post|by Jon Harding
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