A man looks at an electronic stock indicator of a securities firm in Tokyo, Wednesday, Nov. 19, 2014.Shizuo Kambayashi/The Associated Press
Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This post will be updated throughout the morning.
Parallel Energy Trust announced its 2015 capital budget and said it would cut its distribution to unitholders because of the slide in oil prices.
"Given the current commodity price environment and the Trust's commodity price assumptions for 2015, the current distribution of $0.05 per unit per month no longer results in a forecasted total payout ratio of less than 100 per cent. The Trust believes that in the current volatile commodity price environment, it is in the best interests of its unitholders to maintain a total payout ratio substantially below 100 per cent to provide greater financial flexibility by reducing its bank debt while maintaining a stable production profile year-over-year.
As a result, beginning with the distribution to be announced in December, 2014, the Trust will reduce its monthly distribution to $0.025 per unit per month."
TD Securities analyst John Green took an upbeat view on the news, and he reiterated a "hold" rating and $3.25 (Canadian) price target. "In our opinion, the dividend reduction is a prudent measure for the trust which is a prompt response to the current commodity price reality and staves off further leveraging of its already challenged balance sheet. The reduced distribution now provides Parallel with the financial flexibility to pay down debt and meet 2017 maturing debenture obligations (under our current US$85 WTI outlook)," he said.
Scotiabank, however, downgraded the stock to "underperform" today in the wake of the announcement. It was also downgraded by National Bank Financial, to "sector perform" from "outperform," with a price target of $3 (Canadian).
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Macarthur Minerals Ltd. said it has agreed with ATEC Rail Group Limited to review iron ore acquisition opportunities in the Yilgarn region of Western Australia.
"Acquisition opportunities are emerging as producing iron ore assets are being re-priced on the prevailing spot iron ore price and, for Macarthur, therein lies the opportunity. As an example, within the Yilgarn region of Western Australia, it is reported that Cliffs Natural Resources' Asia Pacific operations (located 80 km from Macarthur's Ularring Hematite project) may be divested. Cliffs' Asia Pacific iron ore reserves are reportedly, estimated to be exhausted by 2020."
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Bonterra Energy Corp. announced that it has resolved issues with Canada Revenue Agency concerning CRA's objection to the tax consequences of the conversion of Bonterra's income trust structure into a business corporation.
This will result in no cash outlay by the company for taxation years 2009 and 2013 and reduced cash outlays for subsequent periods. But there will be a charge in the statement of comprehensive income for the fourth quarter of this year.
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Canadian Overseas Petroleum Ltd., along with its partner, ExxonMobil, remain committed to completing their work program and obligations under a production sharing contract in Ebola-stricken Liberia, the company said.
"The government of Liberia has provided its assurances that it will act under the terms of the PSC to provide ... sufficient time to complete its work program, extending the current exploration period if necessary," the company said.
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Condor Resources Inc. said it has been notified by Mariana Resources Ltd. that Mariana is withdrawing from its option agreement on the Condor de Oro project in northern Peru. "Condor is pleased with the extent and quality of work completed by Mariana, and to have the project returned in good standing with significant value added," the company said.
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WesternZagros Resources Ltd. released its third-quarter operational and financial results.
Darcy Keith