24/7 Wall St. » PCZ

Top Analyst Upgrades (BBBY, MAPP, ISLE, OMX, PCZ, RF, SPLS, SYMC)

247wallst — Wed, 27 May 2009 11:58:56 +0000

These are the top pre-market analyst upgrades and positive research calls we have seen from Wall Street firms this Wednesday morning:

Bed Bath & Beyond (BBBY) Started as Outperform at Oppenheimer.
MAP Pharmaceuticals (MAPP) Raised to Buy at Deutsche Bank.
Isle of Capri (ISLE) Raised to Outperform at oppenheimer.
OfficeMax (OMX) Started as Outperform at Oppenheimer.
Petro-Canada (PCZ) Raised to Overweight at Barclays.
Regions Financial (RF) Raised to Buy at Deutsche Bank.
Staples (SPLS) Started as Outperform at Oppenheimer.
Symantec (SYMC) Raised to Outperform at Morgan Keegan.

JON C. OGG

Posted in Analyst Calls Tagged: BBBY, ISLE, MAPP, OMX, PCZ, RF, SPLS, SYMC

French Company Surrenders in Takeover Battle (TOT, SU, PCZ, TCK)

247wallst — Tue, 28 Apr 2009 13:44:50 +0000

French supermajor oil company Total SA (NYSE:TOT) has let its offer for Canada’s UTS Energy Corporation expire. Total failed to get tenders for two-thirds of UTS’s shares, and has directed the tender depositary to return all deposited common shares of UTS.

Total last week raised its offer for UTS to CDN$1.75/share. The initial offer was made in late January at about CDN$1.30 (CDN$617 million). Total had hoped to add to its position in the Canadian oil sands play, but the proposed merger between Suncor Energy Inc. (NYSE:SU) and Petro-Canada (NYSE:PCZ) makes this offer for UTS less important.

UTS owns 20% of the Fort Hills project in Alberta, and Total was surely hoping to use that to lever an additional stake from either Petro-Canada, which owns 60% of the project and is the operator, or from Teck Cominco (NYSE:TCK), which owns the remaining 20%. It is now highly unlikely that Suncor will give up Petro-Canada’s share, and Teck’s share isn’t enough to give Total control of the project.

Total shares are off less than 1% in early trading today. The company’s 52-week range is $42.60-$91.34.

Paul Ausick
April 28, 2009

Posted in ADR, Mergers and Buy Outs, Oil & Gas Tagged: PCZ, SU, TCK, TOT

Oil Sands Universe Just Got Simpler (SU, PCZ, TOT, ENY)

247wallst — Mon, 23 Mar 2009 12:33:12 +0000

Two of the largest players in the Canadian oil sands, Suncor Energy Inc. (NYSE: SU) and Petro-Canada (NYSE:PCZ) announced that Suncor will acquire Petro-Canada in a deal valued at $15.5 billion. Shareholders of Petro-Canada will get 1.28 shares of the new company for each share of Petro-Canada they hold, and Suncor shareholders will get one share for each share of Suncor they hold.

According to the joint press release, the deal represents a 25% premium over the 30-day weighted average of Petro-Canada stock. Once the share exchange is completed, Suncor shareholders will hold 60% of the new company and Petro-Canada shareholders will hold the remaining 40%. The new company will retain the Suncor name, as well as the Petro-Canada brand in the refining and marketing end of the business.

Suncor’s president and CEO said, “The combined portfolio boasts the largest oil sands resource position, a strong Canadian downstream brand, solid conventional exploration and production assets, and low-cost production from Canada’s east coast and internationally.” Petro-Canada’s president and CEO, who will become the Executive Vice Chairman of the new company, said, “The merger will be good for shareholders of both companies with reduced capital requirements, operating efficiencies and complementary integration opportunities between upstream and downstream assets. The increased scale provides more stability in volatile markets, plus the financial and organizational capability to successfully take on large-scale projects in the future.”

The merged companies expect to save $300 million a year in operating expenses. Combined production totals 680,000 barrels of oil equivalent annually, and refining capacity totals 433,000 barrels/day. The merged companies will control approximately 7.5 billion barrels of oil equivalent proved and probable reserves, along with nearly 19 billion equivalent barrels of “contingent” reserves.

It’s no secret that low prices for crude have hit the oil sands hard. Suncor had approved a capital spending budget of C$20.6 billion for the four-year period beginning in 2009. In October, that budget was cut by C$6 billion, and was further cut early this year by another C$3 billion. Per barrel prices of $40 only barely cover costs of production from the oil sands. Suncor’s cash operating costs per barrel were $38.50 in 2008 and the costs are projected in the range of $33-$38/barrel for 2009. And new build projects need prices of more than double that amount to be economically viable.

The oil sands development centered around a little town named Fort McHenry, Alberta, has produced a boom-town environment over the past few years. Costs for employees, materials, and equipment have skyrocketed, although prices have moderated somewhat in recent months. Consolidation is expected to slow the number of competing projects planned for the region.

France’s Total SA (NYSE:TOT) launched a $478 million hostile takeover bid for Canada’s UTS Energy Corporation in January. UTS Energy has agreed to join Petro-Canada in a major oil sands project that has now been delayed. Will the new company honor that agreement? The project, known as the Fort Hills project, is really the only big, new project on either Suncor’s or Petro-Canada’s plate.

Overall, the Canadian merger makes a lot of sense. The outlook for operational savings seems a bit rosy, but there’s no question that costs will come down, if for no other reason than the new company will rein in spending.

Petro-Canada shares are trading up more than 25% before the market opens this morning.

The ETF which covers the Canadian oil sands sector is the Claymore/SWM Canadian Energy Income (NYSE: ENY). It closed at $9.94 Friday, down from a high of over $36.00 last year.

Paul Ausick

March 23, 2009

Posted in ADR, Mergers and Buy Outs, Oil & Gas Tagged: ENY, PCZ, SU, TOT

Energy Watch Part III: Big Oil Well Off Highs (XOM, COP, RDS.A, CVX, BP, MRO, PCZ, APA)

247wallst — Mon, 18 Aug 2008 09:05:03 +0000

Even with oil prices well off of recent highs, these are still very much considered as above historical highs. The large integrated oil companies have experienced either declines or very small gains in value over the last year, and these are generally well off of their 52-week highs. Exxon Mobil (NYSE:XOM) has declined almost 4.5% over the last year but is down about 20% from its 52-week highs. BP (NYSE:BP) has fallen over 25% from its highs; Royal Dutch Shell (NYSE:RDS.A) is down 22% from its highs. ConocoPhillips (NYSE:COP) is off about 18% from its highs and Chevron (NYSE:CVX) is off almost 20% from its highs. Among smaller companies, the losses from recent highs are even worse. Apache (NYSE:APA) is down more than 28% from recent highs, Marathon (NYSE:MRO) is down about 28% from its recent highs%, and PetroCanada (NYSE:PCZ) is down about 31% from its recent highs. As you will see below, there are many reasons for these exaggerated drops and perhaps some underlying opportunities as well.

Refining and marketing have had a serious impact on earnings for allthese companies, with the exception of Apache, which is strictly anexploration and production operation. Refining margins are either waydown or non-existent. As we’ve noted before, gasoline inventories areat the top of their historical ranges, primarily because US drivers arekeeping their cars parked. What’s selling at premium prices are dieseland jet fuel, and refineries are aggressively seeking light, sweetcrude that yields as much as 30 gallons of distillates per 42-gallonbarrel. Production declines in Nigeria have reduced supplies of thistype of crude by as much as 400,000 b/d.

The refineries are forced to turn to heavy, sour crude which yieldsonly about 20 gallons of distillates per barrel. This has driven up thecost of diesel and jet fuels, and put a serious crimp in major oilcompany valuations. The situation is unlikely to change untilrefineries increase their capacity to produce distillates from theheavier crudes. Most are working on the issue, but it will take sometime and some serious investment.

A final word about Apache. It’s second quarter earnings and revenuesbeat analysts’ expectations, but production declines cast a chill overthe good news.

Big oil valuations depend on proved reserves and quarterly production.Production glitches have been covered up by high prices, and provedreserves are not growing. That combination is strong enough to keepstock prices low even when these companies report record earnings. Yes,it’s a mean old world.

Paul Ausick
August 18, 2008

Early-Bird Analyst Upgrades & Downgrades (PHM, TOL, CCOI, LVLT, PCZ, TWB, TWT, WCN, WW)

247wallst — Wed, 13 Aug 2008 06:34:46 +0000

These are not all of the analyst calls out there but these are some of the calls we see having an impact on trading this Wednesday morning with more than two hours to the market open:

Pulte Homes (PHM) Started as Buy at Citigroup.
Toll Brothers (TOL) Started as Buy at Citigroup.

Downgrades or negative calls as follows:

Cogent Communications (CCOI) Cut to Underperform at Oppenheimer.
Level 3 Communications (LVLT) Cut to Underperform at Oppenheimer.
Petro-Canada (PCZ) Cut to Hold at Deutsche Bank.
Tween Brands (TWB) Cut to Sell at Citigroup.
TW Telecom (TWT) Cut to Perform at Oppenheimer.
Waste Connections (WCN) Cut to Market Perform at FBR.
Watson Wyatt Worldwide Inc. (WW) Cut to Neutral at Baird.

Jon C. Ogg
August 13, 2008

Top 10 Pre-Market Analyst Calls (AFL, AW, CPB, MWV, NYX, ODFL, PDLI, PCZ, SPIL, WDFC)

247wallst — Fri, 13 Jun 2008 06:51:04 +0000

There are other calls out there, but these are ten of the early morning analyst calls that we are focused on this Friday 13th:

Aflac (NYSE: AFL) Started as Buy at SunTrust Robinson Humphrey.
Allied Waste (NYSE: AW) Raised To Buy From Neutral at Goldman Sachs.
Campbell Soup (NYSE: CPB) Raised To Overweight from Equalweight at Lehman.
MeadWestvaco (NYSE: MWV) Raised to Buy from Hold at Citigroup.
NYSE Euronext (NYSE: NYX) Started as Neutral at Credit Suisse.
Old Dominion Freight Line (NASDAQ: ODFL) Raised to Outperform from Neutral at Baird.
PDL Biopharma (NASDAQ: PDLI) Cut to Neutral from Outperform at Credit Suisse.
Petro-Canada (NYSE: PCZ) raised to Buy at Banc of America.
Siliconware Precision (NASDAQ: SPIL) Raised to Neutral from Sell at UBS.
WD-40 (NASDAQ: WDFC) Cut to Underweight from Neutral at JPMorgan.

Jon C. Ogg
June 13, 2008

Petro-Canada, New Debt For Old Debt (PCZ)

247wallst — Mon, 12 May 2008 18:04:44 +0000

Petro-Canada (NYSE: PCZ) is selling a total $1.5 Billion in debt to a syndicate of underwriters in the United States. Of the full offering, some $600 million in debt of 6.05% 10-year Notes due May 15, 2018 and $900 million US of 6.80% 30-year Notes due May 15, 2038.

The net proceeds of this debt offering will be used to repay short-term notes payable and existing outstanding debt under its credit facilities. The balance will be used for additional working capital. Citigroup, Deutsche Bank, and HSBC are acting as joint book running managers for the offering, which should close on May 15, 2008.

The offering is being made in the U.S. under the company’s existing base shelf prospectus, which was dated March 31, 2008 and allowed for the issuance of up to $4 billion(U.S.) in debt securities.

The company also said it believes the debt securities are expected tobe assigned a rating of BBB (stable) by Standard & Poor’s RatingsServices and Baa2 (stable) by Moody’s Investors Service.

As noted, new debt for old debt…. same ratings… no real change in either direction.

You can join our open email distribution list to hear about other special financings, mergers, IPO’s, spin-offs, secondary offerings, and other special situations.

Jon C. Ogg
May 12, 2008

Top 10 Pre-Market Analyst Calls (BIG, CSH, CS, ERIC, GT, MRVL, MMR, MNTA, NTRS, PCZ)

247wallst — Mon, 28 Apr 2008 06:33:55 +0000

These are ten of the top analyst calls we see affecting shares in pre-market indications this Monday morning:

Big Lots (NYSE: BIG) Raised to Overweight from Neutral at JPMorgan.
Cash America (NYSE: CSH) Cut to Hold from Buy at Jefferies.
Credit Suisse (NYSE: CS) Raised to Peer Perform at Bear Stearns.
Ericsson (NASDAQ: ERIC) raised to Neutral from to Sell at Goldman Sachs; downgraded to Neutral from Buy at Banc of America.
Goodyear Tire & Rubber (NYSE: GT) cut to Neutral at JP Morgan.
Marvell Tech (NASDAQ: MRVL) raised to Outperform at FBR (stock indicated +2%).
McMoRan Exploration (NYSE: MMR) Cut to Hold from Buy at Jefferies.
Momenta Pharmaceuticals (NASDAQ: MNTA) Raised to Overweight at Morgan Stanley.
Northern Trust (NASDAQ: NTRS) Cut to Hold from Buy at Deutsche Bank.
Petro-Canada (NYSE: PCZ) raised to Outperform at CINC World Markets.

Jon C. Ogg
April 28, 2008

Petro-Canada Tapping Debt Markets (PCZ)

247wallst — Mon, 24 Mar 2008 13:34:05 +0000

It seems that amidst a global tightening of credit standards and many lending spreads have widened out (while rates are easing) doesn’t affect all companies out there. That’s particularly true if you are an oil company. These oil giants were in great shape at $70 oil, but $100 oil has even more benefits. Petro-Canada (NYSE: PCZ) has filed with the US SEC to sell up to $4 Billion in debt securities.

The filing from the integrated oil and gas player was not specific as to maturities or tranches but it will now be able to sell up to $4 Billion over the next 25-month period. These debt securities can be sold in the U.S. or in Canada.

We routinely cover implications for debt and equity offerings, back door plays into IPO’s, special financings and more on our open email distribution list that usually goes out twice weekly.

Petro-Canada currently has a market cap of roughly $20 Billion, and its $41.95 current stock price is at the bottom of its US-traded stock range of $37.40 to $61.18 over the last year. As of the end of 2007, its annual report shows that its total assets are some $23.8 Billion and it listed $3.6 Billion in current liabilities and $3.33 Billion in long-term debt before other liabilities.

Jon C. Ogg
March 24, 2008

Jon Ogg produces the Special Situation Investing Newsletter and can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Top 10 Pre-Market Analyst Calls (ADCT, ADSK, BSX, EL, FFIV, PCZ, TLAB, GTS, VRTX)

247wallst — Wed, 16 Jan 2008 08:07:17 +0000

These are not at all the only analyst calls that 247WallSt.com is looking at today in an active negative market, but these are 10 of the more influential calls that may stand out in an otherwise cautious or negative market:

ADC Telecom (NASDAQ: ADCT) raised to Outperform at Morgan Keegan.
Autodesk (NASDAQ: ADSK) cut to Hold from Buy at Jefferies.
Boston Scientific (NYSE: BSX) raised to BUY from Neutral at Banc of America.
Estee Lauder (NYSE: EL) raised to Neutral from Sell at UBS.
F5 Networks (NASDAQ: FFIV) cut to Hold from Buy at Jefferies.
Intel Corp. (NASDAQ: INTC) upgraded to Equal Weight from Underweight at Morgan Stanley; estimates lowered at Goldman Sachs (and likely many more).
Petro Canada (NYSE: PCZ) downgraded to Neutral from outperform at Credit Suisse.
Tellabs (NASDAQ: TLAB) raised to Buy from Neutral at UBS (large call option buying recently).
Triple S management (NYSE: GTS) started after quiet period: Outperform at Credit Suisse, Outperform at Oppenheimer, and Neutral at UBS.
Vertex (NASDAQ: VRTX) raised to Buy from Neutral at Banc of America.

Jon C. Ogg
January 16, 2008