Unless you're David Tuer, being the CEO of an oil and gas company has been the most fun you can have with your boots on.
Indeed, the good times are rollin' in the Calgary oilpatch, where brash CEOs are swaggering down Stephen Avenue with a jingle in their jeans and grinning through teeth flossed with $100 bills.
Meanwhile, investors have been observed holding conventions at BMW dealerships, at least those that haven't been crushed by the collapse of shares in Hawker Resources (TSX:HKR), the struggling company headed by Tuer.
A scan of those dizzying charts of oil and gas stocks can set your head spinning. Many resemble Mount Everest, which may not be a good thing.
The S&P/TSX energy index has soared 45 per cent over the past year and the royalty trusts, which aren't included in the energy index, have performed almost as well. The energy index has boot-stomped most other indexes. The only thing even close is the S&P/TSX metals and mining index that has surged 33 per cent over the past year.
Remarkably, there isn't a single stock in the energy index that has lost ground over the past year. All 27 have been surging year to date and all are trading at or near 52-week highs except one, Ivanhoe Energy (TSX:IE).
Although it may seem like energy stocks are immune to normal corrective phases and will go up forever, the sharp moves of many of these energy plays in recent weeks have been nothing short of breathtaking and should be watched closely for a break in the trend.
Centurion Energy (TSX: CUX) has been the oilpatch's cleanup hitter with a stunning one-year return of 350 per cent. But Centurion, an upstart international play, has plenty of company in the oil-slick stratosphere.
Paramount Energy (TSX: POU) is up 248 per cent, First Calgary Petroleum (FCP) is up 200 per cent and Canadian Natural Resources (TSX:CNQ) is up more than 100 per cent.
Even EnCana (TSX:ECA), once a laggard, has joined the Everest party in recent months. Canada's largest natural gas producer boasts a six-month gain of more than 30 per cent as an increasing number of investors recognize the company's phenomenal strength in the industry. Shares of EnCana have rocketed recently on financials that showed fourth-quarter earnings of $2.58 billion or $5.55 a share (including a $1.1-billion sale of assets).
And with commodity prices on fire and many analysts conceding that sky-high oil prices are a long-term phenomenon, nothing seems to be able to stop this runaway train.
Of course, conventional stock market wisdom - now, there's an oxymoron if I've heard one - tells us to sell, sell, sell when a sector starts to make headlines.
However, oil stocks can't read. Oil has been a line story for over a year now and the stocks continue to pick up steam. If you sold on those headlines, you'd have given up considerable upside.
Yet, there are signs that the arrogance of the oilpatch may be setting itself up to be knocked down a notch or two.
How brash is the 'patch these days?
Watching a recent interview with EnCana CEO Gwyn Morgan on Report On Business TV drove that point home. You could have muted the interview and still be struck at Morgan's almost childlike giddiness. Obviously feeling smug about his company's knockout financials, he grinned and giggled throughout the interview as if someone were tickling him.
So one can't help wondering ... Are oil and gas stocks close to being giggled out and overdue to catch their breath, or perhaps even undergo a nasty correction some time this year?
What's sure is that the easy money has been made.
But not quite every oil and gas company has been enjoying the fruits of a booming marketplace.
These days, if you dig really deep, you can unearth the odd loser.
Most notable among a handful of companies whose shares are down in the past year is Hawker Resources, which is run by Tuer, who, quite ironically, was CEO of PanCanadian Energy before it merged with Morgan's Alberta Energy Co.
While all has come up roses for Morgan since that merger three years ago, shares in Tuer's Hawker have been pounded over the past few months as the company has underperformed and disappointed shareholders with a lowering of production guidance.
Hawker shares have plunged from a 52-week high of $5.30 to a recent price of $3.10 and the company is now considering a restructuring that may include conversion into an income trust or a sale. Peters & Co. has been retained as Hawker's financial adviser.
Ironically, Hawker was born from a conversion of a once high-flying Calgary biotech company, Synsorb Biotech.
In the first few months after the conversion, Hawker shares doubled as speculators placed huge bets on Tuer, the superstar jockey with the stellar track record.
Which goes to show you - nothing's a sure thing, even in the charmed world of the oilpatch.
* STREET TALK: California fund manager Ken Gerbino recently provided some sage advice on how to spot the proverbial "moose pasture" mining plays.
In an interview with Mineweb.com, the portfolio manager of Kenneth J. Gerbino & Co. said investors should be wary of early-stage exploration companies that "don't give you enough information, talk about very sparse geological data and blow everything way out of proportion."
Gerbino is bullish on metals and precious metals that aren't moose pastures, bearish on U.S. stocks and forecasts long-term global inflation.
Among his favourite mining stocks is Southwestern Resources (TSX:SWG).
He predicts the Canadian company will eventually be acquired by Newmont Mining (TSX:NMC) for its monster gold prospects in China.
* NORTEL URANIUM COMPANY? Peter Grandich, editor of Grandich Publications, has a surefire cure for the lacklustre performance of shares in Nortel Networks (TSX:NT).
Writes Grandich: "Just about anything with uranium is seeing increased interest. Now, if I can only figure out how to get Nortel Networks into uranium ..."
* SAGE WORDS: "Fortunes are not easily made in Wall Street. Some professionals give their lives to the market and die poor."
- Frank Williams, author of If You Must Speculate, Learn The Rules
HOT STOCK: UTS Corporation
TSX:UTS $2.70 Up 91 cents (+50.8%) on 98 million shares
(Based on week ending March 4.
On the day the news broke that UTS had scored a deep-pocketed partner in PetroCanada (TSX:PCA) for its Fort Hills oilsands project, shares in UTS made a surprisingly modest rally, trading just over $2. At that stage, ROB-TV's technical whiz Lou Schizas suggested the stock was overdone based on a brisk pre-news rally. In the next three days, UTS shareholders saw nothing but blue sky as the stock roared another 30 per cent on massive volume. Turns out the market was wearing ear plugs.
COLD STOCK: Aspen Group Resources
TSX:ASR 46.5 Cents
Down 26.5 cents (-36.3%) on 15 million shares
(Based on week ending March 4)
For two weeks, Aspen and its partner, Westchester Resources (TSXV:WSR), were the twin towers of the junior oil and gas sector with their stocks exploding by about 300 per cent on preliminary drilling results of a North Dakota well. So, when the companies released disappointing production test results on that well, reality set in and shares in the two companies were promptly cut in half. Oklahoma City-based Aspen took a one-day plunge from $1 to 46.5 cents on 9.6 million shares. Ouch!
(Gyle Konotopetz can be reached at gyle@businessedge.ca)
