This energy producer beat its last quarter estimates by a penny, and earnings are trending up on higher production.
Birchcliff Energy (BIR.TO)
from Market Insider Bulletin
Birchcliff Energy (BIR.TO) is a growing mid-sized energy company with total production weighted 83% to natural gas. In fiscal 2013, the average annual production was 25,800 boe/day. In the quarter ending June 30/14, average production of 31,178 boe/day was up by 29% from the same quarter in 2013. Over the same period, Funds Flow increased by 79% and net income by 171% to $0.52/sh. and $0.19/sh. respectively.
In addition to the higher production volume, and 15% higher average price received, lower operating, general and administrative costs contributed to the rise in Funds Flow Netback to $26.57/boe from $19.03 a year ago. BIR expects 2014 exit production to reach 40,000 boe/day.
The Funds Flow for fiscal 2014 is expected to reach $2.24/sh. The 2014 total debt/annual cash flow ratio of 1.4 will be close to the sector average.
At the end of June’14 BIR had 152.6 million of fully diluted shares, 5% more than a year ago. Approximately 46 million was held by Insiders with Schulich Seymor holding 40 million shares. Over the last 7-8 years Insiders of BIR have been quite active buyers. The latest Insider purchases have been executed following the slide from the June’14 high of $14.97. That top nearly matched the previous major all-time tops of July 2008 and November 2011. Five Insiders bought 16,500 shares in July, August and September paying $10.70 - $11.44 per share. The CFO bought 2000 shares to hold 204,600 shares.
BIR is technically weak, though oversold and close to the major support zone of $9-$10. Like other gas producers BIR should benefit from any seasonal recovery in gas prices. The chart of open net interest in gas futures and futures options shows Producers & Users being marginally net long. In the past, that typically, was a bullish signal for natural gas prices.
Tony Jasansky, Market Insider Bulletin, 106 Neighbourly Lane, Richmond Hill, Ontario L4C 5L7; ajasansky@yahoo.ca, October 2014