If you’re looking for the heat and light being generated by Canada’s petroleum companies, the real place to look these days is the stock market. Although oil from Dome Petroleum’s successful drilling in the Beaufort Sea may take months—even years—before delivery to consumers, the announcement of this discovery last week sent Toronto Stock Exchange traders on a buying rampage, and pushed the TSE composite index to its largest recorded gain made in a single day.
Dome’s announcement, coupled with the unexpected revelation by Calgarybased Bluewater Oil & Gas of a relatively large oil find in southern Ontario, made last week’s oil trading particularly active, but it’s really part of an extended boom in energy stocks going back more than a year, during which time share prices have more than doubled. Imperial Oil shares, for
example, trading at about $18 last summer had climbed to about $40 by last week. Gulf Oil shares have moved from just over $27 last December to last week’s price of $91 and Canadian Superior Oil stocks have jumped from $75 to $152 in the past two months alone.
With stock prices climbing, the petroleum companies themselves want to grab as big a piece of the action as possible before the last "bargains” have disappeared. Thus it’s also been a lusty year of mergers and take-overs, with Alberta Gas Trunk Line moving to complete its purchase of Husky Oil, Kaiser Resources snapping up Ashland Oil Canada for $440 million, and Nu-West Development (originally a house-building company) grabbing Voyageur Petroleums for $198 million. There were others and there will be more to come as oil becomes scarcer and scarcer. Said one oil analyst: “There isn’t a man alive who shouldn’t have at least 25 per cent of his investment portfolio in Canadian oil stocks.”
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