SAGD stands for steam assisted gravity drainage;it is the most frequently used method of mining heavy oil.The idea is to drill two parallel wells about five to six metres apart.Steam goes into the top well and bitumen goes into the bottom well.The heat from the steam turns tar into bitumen.The bitumen is them pumped to the surface.
Southern Pacific Petroleum has a SAGD system in Fort Mackay, Alberta and one in Senlac, Saskatchewan.It has three well pairs for each.It has four well pairs that are in conversion to the production phase and five others that are in the pre-conversion stage.But from the three in the production stage at Mackay in September Southern Pacific got only 850 barrels per day in order to repair the steam chambers in the top well.Production climbed slowly in November, December and January.The company at first used high pressure steam stimulation (HPSS) to increase daily production.But this was found to be not effective enough although it did stimulate production.Then Southern Pacific turned to another method called inflow control device(ICD) and production has responded. Production from the Mackay facility is now up to 2187 barrels per day and total production is now almost 4300 barrels per day.It is still down from production in the third quarter of 5000 barrels per day.Southern Pacific reports that the flow form one of their well pairs now is even 200 barrels per day higher at the peak rate .Also the four new well pairs will soon be ready to come onstream.
The next quarter
During this hiatus, production at Senlac, Saskatchewan has remained stable.But Southern Pacific needs production now to rise at Senlac.But ,of course, the bigger problem is at Mackay.Production figures which are given every month(in an operational update) needs to be close to 2300 barrels per day at Mackay ; then total quarterly production will be close to or exceed the September 2013 figures.If that happens and Southern Pacific management thinks it will then STP should trade at October levels of about $.70 per share.The price per share now is less than $.30 and this blog expects the price to move slowly up to September levels.At this point it seems like STP is only experiencing growing pains and needs (ICDs) in a few more well pairs until the new well pairs come onstream.
Saturday, 22 March 2014
Wednesday, 19 March 2014
Putting out a shingle
In previous blogs I told about getting my Master's degree in Economics and most of my M.B.A.However I still encountered difficulties and left my job in the federal civil service.My last job was as a senior economist.I left Ottawa and worked for awhile in real estate.I decided that I needed more practical education and enrolled in a program to get a C.M.A (chartered management accountant).I met a C.M.A administrator and he told me that I had to take my courses at an university. In this case he suggested Wilfrid Laurier University;it had a pretty good business school and offered night courses.
Education
I told the administrator that I had obtained a Master's degree in Economics and most of a M.B.A at the university of Ottawa.He told me that I would have to be tested to see if my level was high enough to get credit for the courses I took at the C.M.A.level.Like I had done for my M.B.A credits;I had to pass a course in Statistics at the 70% level at Sir Wilfrid Laurier University.I took it and passed at the required level.I believe that there were about 15 courses to get your accreditation.I think I now had credit for about 10 courses, including my economic courses which were obligatory.Next I had to take Advanced Management Accounting..I had a hard time here because the homework was supposed to be done on a computer spreadsheet;however the exam could be done by hand.I barely passed it but I passed.Now I had only about four courses to go to get my accreditation.The next course was Advanced Finance and I enrolled.Here I found out that you were expected to own a computer and everything was done on computer spreadsheets(including the exam).I dropped out after three classes.However I did get a taste of what was required to be a C.MA.This experience along with my M.B.A.(minus one course) and my Master's in Economics made me ready to do some consulting I felt.
Experience
These course should qualify me for many(but not all) management consulting jobs, especially in the immediate region I am in.It certainly was handy using it to write my blogs.I have a variety of tasks that I do on my blogs;I offer clarification on technical quarterly performance reports and financial events relating to a number of companies( many of which I own and have a keen interest).I offer advice on technical and financial problems that these companies (listed on the T.S.X) have to improve earnings and the price of shares.However the hope is that regional companies will read my blogs and comment or email me to ask for advice through texting or in person.This is my goal.So far I have no comments nor emails from interested companies.The kind of project I would like is improving efficiency,increasing revenues(organically or through mergers or acquisitions).I have most of my experience in doing this through my blogs but I do have some consulting experience in the federal civil service also.
Fees
My fees would be similar to most lawyers (on a contingency basis).The more complex the project, the higher the fee but no fee until the problem is solved.Many small projects would require only 5% of the money involved.Bigger and more complicated projects would earn 20 to 25 % of the return to the customer. send inquiries to workathon or to daleandmac@gmail.com
Education
I told the administrator that I had obtained a Master's degree in Economics and most of a M.B.A at the university of Ottawa.He told me that I would have to be tested to see if my level was high enough to get credit for the courses I took at the C.M.A.level.Like I had done for my M.B.A credits;I had to pass a course in Statistics at the 70% level at Sir Wilfrid Laurier University.I took it and passed at the required level.I believe that there were about 15 courses to get your accreditation.I think I now had credit for about 10 courses, including my economic courses which were obligatory.Next I had to take Advanced Management Accounting..I had a hard time here because the homework was supposed to be done on a computer spreadsheet;however the exam could be done by hand.I barely passed it but I passed.Now I had only about four courses to go to get my accreditation.The next course was Advanced Finance and I enrolled.Here I found out that you were expected to own a computer and everything was done on computer spreadsheets(including the exam).I dropped out after three classes.However I did get a taste of what was required to be a C.MA.This experience along with my M.B.A.(minus one course) and my Master's in Economics made me ready to do some consulting I felt.
Experience
These course should qualify me for many(but not all) management consulting jobs, especially in the immediate region I am in.It certainly was handy using it to write my blogs.I have a variety of tasks that I do on my blogs;I offer clarification on technical quarterly performance reports and financial events relating to a number of companies( many of which I own and have a keen interest).I offer advice on technical and financial problems that these companies (listed on the T.S.X) have to improve earnings and the price of shares.However the hope is that regional companies will read my blogs and comment or email me to ask for advice through texting or in person.This is my goal.So far I have no comments nor emails from interested companies.The kind of project I would like is improving efficiency,increasing revenues(organically or through mergers or acquisitions).I have most of my experience in doing this through my blogs but I do have some consulting experience in the federal civil service also.
Fees
My fees would be similar to most lawyers (on a contingency basis).The more complex the project, the higher the fee but no fee until the problem is solved.Many small projects would require only 5% of the money involved.Bigger and more complicated projects would earn 20 to 25 % of the return to the customer. send inquiries to workathon or to daleandmac@gmail.com
Sunday, 2 March 2014
About Me
Most blogs have an About Me section displayed prominently beside the blog itself.I have added to the profile but blogger will not take the adjustments I make.So I have added this blog to explain about me.I have in various blogs on Workathon told about professors and courses that I took getting my master's degree in economics.The chairman for economics at the University of Ottawa was a professor called De Kuiper;he had been a former Chief Statistician from Statistics Canada and the chairman of graduate studies in the department was a man called Willy Sellekaerts who had won a Fullbright scholarship at William and Mary University.Fullbright scholarships are more rare and harder to get than Rhodes scholarshiops;he was a very studied man.
In addition, I got my M.B.A (in finance) at the university of Ottawa.In fact, I did not get a diploma because I didn't complete one introductory course in personnel management.
Better information
I discovered reading company reports (quarterly reports and information reports) that many of these reports were too technical and not clear.I thought many shareholders would not be able to understand them.This is what many of the blogs in my other blog(calledBlogdaleupsome) does;it explains more clearly these reports and reads between the lines.I figure that this might be worth something to quite a few shareholders and so my blog would be well read.The blog(Blogdaleupsome) also forecasts revenues and earnings,including earnings per share. Shareholders who have lots of information on forecasted earnings may read my blog and decide for themselves if my forecasts are accurate or not.However I never just forecast I always provide information on some aspect that is not covered by other brokers such as an interesting investment the company could make.
Arbitrage
I also look at value pricing;I find companies that,for example,have very low earnings and the price of the shares does not properly reflect it.I ,in that case, may point out that the proper value of the lower-priced stock should be more in line with other higher-priced stocks.There are many examples of this on the T.S.X.For example, the P/E ratio for one stock may be well below the industry or the index average.My blog would try to point out this situation.This might reduce the shareholder equity for the over-priced stock but more likely will raise the price of the lower-priced one.In other words I am counting on this blog to make better investors of at least a few shareholders and increase the equity of a few companies.That is the raison d'etre of both blogs and that is something About Me.
In addition, I got my M.B.A (in finance) at the university of Ottawa.In fact, I did not get a diploma because I didn't complete one introductory course in personnel management.
Better information
I discovered reading company reports (quarterly reports and information reports) that many of these reports were too technical and not clear.I thought many shareholders would not be able to understand them.This is what many of the blogs in my other blog(calledBlogdaleupsome) does;it explains more clearly these reports and reads between the lines.I figure that this might be worth something to quite a few shareholders and so my blog would be well read.The blog(Blogdaleupsome) also forecasts revenues and earnings,including earnings per share. Shareholders who have lots of information on forecasted earnings may read my blog and decide for themselves if my forecasts are accurate or not.However I never just forecast I always provide information on some aspect that is not covered by other brokers such as an interesting investment the company could make.
Arbitrage
I also look at value pricing;I find companies that,for example,have very low earnings and the price of the shares does not properly reflect it.I ,in that case, may point out that the proper value of the lower-priced stock should be more in line with other higher-priced stocks.There are many examples of this on the T.S.X.For example, the P/E ratio for one stock may be well below the industry or the index average.My blog would try to point out this situation.This might reduce the shareholder equity for the over-priced stock but more likely will raise the price of the lower-priced one.In other words I am counting on this blog to make better investors of at least a few shareholders and increase the equity of a few companies.That is the raison d'etre of both blogs and that is something About Me.
Sunday, 2 February 2014
Mrs. Spry's legacy
I was in graduate school at the University of Ottawa and my major was business cycles.But my assigned mentor was Mrs.Spry and she gave me two classes in Canadian Economic History.She had her Ph.D from the University of Toronto.She knew what all the staff at U.of T were writing and we had to read most of it.I knew of and read Mel Watkins and James Laxer.They wrote about the branch plant economy.Canada was a country with little of it's own companies;they were merely subsidiaries of American or European companies.Companies like Ford and Siemens.
She taught and we read that these plants were usually smaller than the home plants.They had little economies of scale.Consequently their costs of production were higher than the plant in Detroit or Munich.However there was little competition and so Canadian prices were higher;the consumer paid more.
We also read about Harold Innis and the staple theory.The manufacturing industry was built on the resource sector.Profits from lumber and copper and uranium built the banks and the manufacturers.As they helped to build infrastructure.As a result little research and development was required nor obtained in Canada.
The Governor agreed
Mark Carney,in his speeches, always pointed out to Canadians that our research and development was the lowest of the G-8 countries as a percentage of GDP.He didn't point out that applied research was high in Canada in relation to our G-8 partners.Canada likes to buy or import technology and slightly modify it so that it works better in our workplace.This is a cheap way of getting basic products but it will not get new products nor new processes.
Small caps have new technology
Most of the large Canadian companies have almost the same technology and processes as their G-8partners.There is very little new in companies like Roger's cable or even Bell Canada.Qualcomm has it and so does Vodaphone(in Europe).But the new companies in Canada get started based on new technology.They have no market share to start but they have a new gadget or a new process.Most, at first, have high growth rates but after two or three years only one or two out of twenty-five will survive.So the new technologies that are embedded are lost.
My program combines "small cap" companies and tries to create combinations that have synergies.The newly acquired company will infuse it's technology into the acquiring company and it's cost of doing business will go down even if there is more debt.This results in a "mini-merger".The results will not be obvious as sometimes the company being acquired will start to thrive and sometimes the acquiring company will start to grow.
The Success Rate
Many "small caps" simply fold as new revenues do not cover new expenses. Sometimes one or two workers will get a job with a competititor.In general, much of the new technology and expertise is lost.Many more "small cap" companies grow for one or two years and then stagnate.These are companies with growth rates that plateau and most of the workers have low to medium incomes.There are few highly expert workers and only a little profit.The industry is full of "small cap" companies like this.But once in awhile a "small cap" company becomes a" mid-cap" company.It has started to innovate and make it's own niche and this brings higher growth and higher profits and higher salaries.I believe there are a few small "mid-cap" companies around in this category such as Mitel and Aastra Technology and a few others.
She taught and we read that these plants were usually smaller than the home plants.They had little economies of scale.Consequently their costs of production were higher than the plant in Detroit or Munich.However there was little competition and so Canadian prices were higher;the consumer paid more.
We also read about Harold Innis and the staple theory.The manufacturing industry was built on the resource sector.Profits from lumber and copper and uranium built the banks and the manufacturers.As they helped to build infrastructure.As a result little research and development was required nor obtained in Canada.
The Governor agreed
Mark Carney,in his speeches, always pointed out to Canadians that our research and development was the lowest of the G-8 countries as a percentage of GDP.He didn't point out that applied research was high in Canada in relation to our G-8 partners.Canada likes to buy or import technology and slightly modify it so that it works better in our workplace.This is a cheap way of getting basic products but it will not get new products nor new processes.
Small caps have new technology
Most of the large Canadian companies have almost the same technology and processes as their G-8partners.There is very little new in companies like Roger's cable or even Bell Canada.Qualcomm has it and so does Vodaphone(in Europe).But the new companies in Canada get started based on new technology.They have no market share to start but they have a new gadget or a new process.Most, at first, have high growth rates but after two or three years only one or two out of twenty-five will survive.So the new technologies that are embedded are lost.
My program combines "small cap" companies and tries to create combinations that have synergies.The newly acquired company will infuse it's technology into the acquiring company and it's cost of doing business will go down even if there is more debt.This results in a "mini-merger".The results will not be obvious as sometimes the company being acquired will start to thrive and sometimes the acquiring company will start to grow.
The Success Rate
Many "small caps" simply fold as new revenues do not cover new expenses. Sometimes one or two workers will get a job with a competititor.In general, much of the new technology and expertise is lost.Many more "small cap" companies grow for one or two years and then stagnate.These are companies with growth rates that plateau and most of the workers have low to medium incomes.There are few highly expert workers and only a little profit.The industry is full of "small cap" companies like this.But once in awhile a "small cap" company becomes a" mid-cap" company.It has started to innovate and make it's own niche and this brings higher growth and higher profits and higher salaries.I believe there are a few small "mid-cap" companies around in this category such as Mitel and Aastra Technology and a few others.
Friday, 31 January 2014
The "small cap" technology plan
Some time ago I was in Barrie to do research on materials I needed for an upcoming court case.I found a couple of technical magazines and got two different lists of the fastest growing companies over the last five years.I have used them to be added to other companies-companies that have already been listed on the T.S.X .I have found that if you take the ten fastest growing companies in the last year only one or maybe two will last another two or three years.So if they don't accept my offer to sell their shares at a reasonable price they may not survive.My offer gives them a much better chance of thriving in five years as well as some cash.
A spree of buying
About three months ago I bought a bunch of shares for three or four "small cap" companies listed on the T.S.X.These companies acquiring shares included Tecsys,Heroux-Devtek,Mediagrif,and Tucows.All rose on the original purchases but only ones that gained real synergies will stay at these levels.This does however force the acquiring company to look at new ways of doing business.Some like Heroux-Devtek will have new and useful resources.Others not as much.Changes will continue until the right mix of new companies goes with the companies acquiring them.
Five hot junior stocks
My last list of five young companies all showed growth rates of 25% to 300% annual growth.Logistec was given new resources in the north and will get more.It's stock price has benefited from the new resources and additional attention it has received.Construction Control has been added at first to the almost stagnant Intrinsyc Software as has Evoco.But this was only a move to show that they "are in play".Both companies have very high annual growth rates and will have to make asjustments.The adjustments have already started. However now their shares have been moved largely to Tecsys which is a far better fit.Tecsys should be able to give some useful advice on growing and eventually getting listed.Another of these five new ones is Vixs Systems.I arranged for Mediagrif to get some equity in order to get them more "seed money".I am not sure what happened to this relationship but now Vixs has been listed and has moved up in price just like Logistec.It is likely that Mediagrif still has a small stake here yet.The last company on my list is called Global Relay and it has not been "in play" yet but it will be.I have seen no news on it recently but I think it may fit with Intrinsyc Software after Tucows has purchased another tranche of shares of Intrinsyc. send comments on consulting advice on "small cap" companies to workathon
A spree of buying
About three months ago I bought a bunch of shares for three or four "small cap" companies listed on the T.S.X.These companies acquiring shares included Tecsys,Heroux-Devtek,Mediagrif,and Tucows.All rose on the original purchases but only ones that gained real synergies will stay at these levels.This does however force the acquiring company to look at new ways of doing business.Some like Heroux-Devtek will have new and useful resources.Others not as much.Changes will continue until the right mix of new companies goes with the companies acquiring them.
Five hot junior stocks
My last list of five young companies all showed growth rates of 25% to 300% annual growth.Logistec was given new resources in the north and will get more.It's stock price has benefited from the new resources and additional attention it has received.Construction Control has been added at first to the almost stagnant Intrinsyc Software as has Evoco.But this was only a move to show that they "are in play".Both companies have very high annual growth rates and will have to make asjustments.The adjustments have already started. However now their shares have been moved largely to Tecsys which is a far better fit.Tecsys should be able to give some useful advice on growing and eventually getting listed.Another of these five new ones is Vixs Systems.I arranged for Mediagrif to get some equity in order to get them more "seed money".I am not sure what happened to this relationship but now Vixs has been listed and has moved up in price just like Logistec.It is likely that Mediagrif still has a small stake here yet.The last company on my list is called Global Relay and it has not been "in play" yet but it will be.I have seen no news on it recently but I think it may fit with Intrinsyc Software after Tucows has purchased another tranche of shares of Intrinsyc. send comments on consulting advice on "small cap" companies to workathon
Sunday, 19 January 2014
Earnings season (part4)
R.E.I.T.s are a relatively new phenomenon that are listed on the T.S.X.They are an accumulation of capital,both debt and equity,that primarily invest in real estate.They trade on their substantial dividends as well as on earnings.Most offer at least a 5%dividend.This year it is expected that interest rates may rise and that tends to bring the price per share for R.E.I.T.s down.But it is contended that interest rates will not be that big a factor in 2014.The Bank of Canada does not seem ready to raise interest rates yet as growth is expected to be at an anemic 2 to 2.4% growth.Bond yields may rise by 25% but the rate on the 10 year Canadian bonds is only at 2.55%.A 25% increase brings the yields to only around 3%.Some marginal investment may move to Canadian bonds but this should not affect R.E.I.T.s that offer a 5% or greater dividend.Especially if earnings are increasing by 20%or more.
Kinds of R.E.I.T.s
There are three main kinds of R.E.I.Ts:reits for hotels,reits for shopping centres and reits for apartment building complexes.There are others but these are the main ones.The dividend rate is almost always higher than for other stocks.Many substantial companies offer dividends like Extendicare and Riocan at 5.6%to 6.83%.The reits for senior residence like Chartwell and Extendicare are expected to have only slight increases in earnings.Other apartment building based reits should have larger gains in earnings.Interrent ,for example,is expecting a 30% increase in earnings. Reits that supply hotel accomodations may not do so well this year.But there is a breakdown;those that offer luxury accomodations wil see small increases in earnings whereas those like Innvest that offer more modest accomodations could see good gains.The prices of reits is harder to predict as it will depend on the movement of the T.S.X.
Winners
I am again picking juniors as those that should have the largest percentage increases.I also like stocks with low price/earnings ratios.So I pick here BTB trust,Innvest,Interrent,Partners Investment units and Artis.All have low price /earnings ratios and most offer dividends above 7%.A 3 % bond yield shouldn't affect these stocks in a substantial way.
Kinds of R.E.I.T.s
There are three main kinds of R.E.I.Ts:reits for hotels,reits for shopping centres and reits for apartment building complexes.There are others but these are the main ones.The dividend rate is almost always higher than for other stocks.Many substantial companies offer dividends like Extendicare and Riocan at 5.6%to 6.83%.The reits for senior residence like Chartwell and Extendicare are expected to have only slight increases in earnings.Other apartment building based reits should have larger gains in earnings.Interrent ,for example,is expecting a 30% increase in earnings. Reits that supply hotel accomodations may not do so well this year.But there is a breakdown;those that offer luxury accomodations wil see small increases in earnings whereas those like Innvest that offer more modest accomodations could see good gains.The prices of reits is harder to predict as it will depend on the movement of the T.S.X.
Winners
I am again picking juniors as those that should have the largest percentage increases.I also like stocks with low price/earnings ratios.So I pick here BTB trust,Innvest,Interrent,Partners Investment units and Artis.All have low price /earnings ratios and most offer dividends above 7%.A 3 % bond yield shouldn't affect these stocks in a substantial way.
Tuesday, 14 January 2014
Earnings season (part3)
The shape of the business cycle has been determined;it will be like most of the business cycles since the 1970's.It will probably be a "u" shaped cycle and there will likely be two or more years of low growth before we have a downturn.The growth rate is probably going to be less than 2013 as we approach the top of the"u" curve.But what will be the likely winners?I turn to the teachings of another mentor Irene Spry who got her Ph.D from the university of Toronto.She was apparently a friend of the economist Harold Innis.Mr.Innis's theory was called the staple theory.It stated that the manufacturing and financial industry were built from the profits of staples.This I believe will be just such a year.Growth will come mainly from the staples.I predict a good year for the lumber,coal,natural gas and uranium sectors.Other winners will come from outperformers in sectors with average growth.As I believe this year will have economic growth less than 2013.Investment will not see significant growth;there will be investment for some innovation and for replacement of outdated equipment.There will not likely be a boom in investment.Exports and export earnings will be helped by the falling dollar that may hit $.88 relative to the American dollar.
Winners
The trend for new technology companies in U.S.A. will continue this year.Expect Twitter,Facebook and even Microsoft to move up.There may be one or two winners in this field in Canada but they will come from juniors.Large percentage increases can be expected from juniors like Vixs,Tucows,and maybe Mediagrif.I also expect Cameco,Ur-Energy,and Denison Mines to show increases in the uranium sector.New nuclear plants are coming onstream and old ones refurbished,This includes refurbishing in Ontario also.Natural gas is expected to rise and some LNG exports will help here.This will affect companies such as Peyto,Pengrowth,Birchcliffe and even Perpetual Energy.Air Canada is considered a "wild card".Its' new equipment and stable airline ticket prices may carry it higher.The agreement with Chorus will help Chorus and keep their ticket prices stable also.This indicates that traffic may be up in 2014.Lumber spot prices have moved up in 2013 and should continue in2014.Yet it is clear that the housing boom has peaked in Canada and U.S.A but not in Japan nor China.Look for Interfor,Western Forest and Ainsworth Lumber to show good percentage increases this year.Overall there will not be large increases in demand nor revenues so the emphasis will be on reducing costs to increase profits.
Winners
The trend for new technology companies in U.S.A. will continue this year.Expect Twitter,Facebook and even Microsoft to move up.There may be one or two winners in this field in Canada but they will come from juniors.Large percentage increases can be expected from juniors like Vixs,Tucows,and maybe Mediagrif.I also expect Cameco,Ur-Energy,and Denison Mines to show increases in the uranium sector.New nuclear plants are coming onstream and old ones refurbished,This includes refurbishing in Ontario also.Natural gas is expected to rise and some LNG exports will help here.This will affect companies such as Peyto,Pengrowth,Birchcliffe and even Perpetual Energy.Air Canada is considered a "wild card".Its' new equipment and stable airline ticket prices may carry it higher.The agreement with Chorus will help Chorus and keep their ticket prices stable also.This indicates that traffic may be up in 2014.Lumber spot prices have moved up in 2013 and should continue in2014.Yet it is clear that the housing boom has peaked in Canada and U.S.A but not in Japan nor China.Look for Interfor,Western Forest and Ainsworth Lumber to show good percentage increases this year.Overall there will not be large increases in demand nor revenues so the emphasis will be on reducing costs to increase profits.
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