Higher exploration spending will pay off

Article Excerpt

BIRCHCLIFF ENERGY $7.27 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Units outstanding: 142.8 million; Market cap: $1.1 billion; No dividends paid) develops, produces and explores for oil and natural gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 81% of its output is gas. The remaining 19% is oil. In the three months ended September 30, 2013, Birchcliff’s production rose 15.1%, to 24,662 barrels of oil equivalent per day (including gas) from 21,426 barrels a year earlier. Cash flow per share gained 50.0%, to $0.30 from $0.20, on the increased production and higher oil and gas prices. Last year, Birchcliff completed Phase III of its gas plant expansion in Pouce Coupe, Alberta. This project doubled the facility’s capacity and is helping the company bring the additional gas it is producing to market. Birchcliff expects to exit 2013 with production of 30,000 barrels a day. Next year, it plans to spend $275 million on exploration and…