Third-quarter reporting season for Canadian Edge Portfolio Holdings wrapped up in decent fashion last month.

Once again we can report just one announced payout increase, as Vermilion Energy Inc (TSX: VET, NYSE: VET) highlights this month’s Portfolio Update with a 7.5 percent boost, effective with the January 2014 dividend due in February 2014, to go alongside the 11.5 percent uplift from TransForce Inc (TSX: TFI, OTC: TFIFF) reported in this space last month.

Fellow Oil and Gas Holdings Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF), Enerplus Corp (TSX: ERF, NYSE: ERF) and Peyto Exploration and Development Corp (TSX: PEY, OTC: PEYUF) all posted solid production and funds from operations growth.

We do have a 50 percent dividend cut from another of our energy producers, but this move was coming for a long time. In fact we had the Aggressive Holding, Lightstream Resources Ltd (TSX: LTS, OTC: LSTMF) on our Dividend Watch List since the September 2013 issue.

Please note that we address Lightstream Resources, which announced its 50 percent dividend cut on Nov. 22, 2013, in greater depth in this month’s Dividend Watch List feature.

We’ve finally said goodbye to Atlantic Power Corp (TSX: ATP, NYSE: AT), which was a Conservative Holding until it slashed its dividend in February 2013 and was sold from the Aggressive Holdings in a Nov. 11, 2013, Flash Alert due to management’s not-so-subtle hints at another possible payout reduction to come in early 2014 during its conference call to discuss what otherwise were solid results for the third quarter.

Conservative Holding Bird Construction Inc’s (TSX: BDT, OTC: BIRDF) backlog has grown to CAD1.1 billion, as third-quarter results were impacted by the poor performance of a single contract but were otherwise in line with management expectations.

EnerCare Inc (TSX: ECI, OTC: CSUWF) continues to report improving attrition and retention numbers, and its cause will be significantly aided by legislation passed in Ontario this month.

TransForce’s fellow Transport Student Transportation Inc (TSX: STB, NSDQ: STB), for example, posted double-digit revenue growth and a narrower-than-expected net loss during its seasonally weak fiscal 2014 first quarter, which included the summer vacation months of July and August.

As for our last two Canadian real estate investment trusts (REIT) to report third-quarter results, Artis REIT (TSX: AX-U, OTC: ARESF) and RioCan REIT (TSX: REI-U, OTC: RIOCF), their numbers confirm their solid portfolios and their ability to support distributions for the long term.

On the Aggressive side of the ledger, Ag Growth International Inc (TSX: AFN, OTC: AGGZF) posted results that confirm its position as the dominant grain-handling equipment company in North America with a solid kicker in its burgeoning international presence. Sales reached a record in the aftermath of the 2011-12 drought that hampered results for the past year.

Chemtrade Logistics Income Fund (TSX: CHE-U, OTC CHEUF), though its third-quarter results were unspectacular, has agreed to a deal that will basically double its size and expand its business capabilities.

Noranda Income Fund’s (TSX: NIF-U, OTC: NNDIF) zinc production, sales and premiums all improved, and its sulfuric acid results were also solid.

Parkland Fuel Corp (TSX: PKI, OTC: PKIUF) posted a steep earnings decline due to pressure on refiner margins. But recent acquisition and expansion efforts drove a 62 percent increase in volumes sold.

On the whole financial and operating numbers continue to support current dividend rates, while management teams continue to lay foundations for payout growth for the long term.

The Good News

Joining TransForce Inc (TSX: TFI, OTC: TFIFF) among Portfolio Holdings that announced dividend increases during third-quarter reporting season is Vermilion Energy Inc (TSX: VET, NYSE: VET).

As we reported last month, TransForce bumped its payout up by 11.5 percent.

Vermilion will pay CAD0.215 per share per month beginning with the January 2014 dividend payable in February 2014. That’s up 7.5 percent from the current level of CAD0.20 per share.

It’s Vermilion’s third overall increase and the second during the trailing 12 months. Vermilion has never cut its dividend since it was instituted in 2003.

Vermilion also finalized an agreement to acquire GDF Suez’s (France: GSZ, OTC: GDSZF, ADR: GDFZY) 25 percent non-working interest in four producing natural gas fields and a surrounding exploration license northwest Germany for approximately USD170 million in cash at closing, which is targeted for Dec. 31, 2013.

The deal brings to Vermilion free cash flow-generating, low-decline assets as well as near-term development inventory in addition to longer-term, low-permeability gas prospects.

Exxon Mobil Corp (NYSE: XOM) is the operating partner in a consortium that also includes Wintershall Holding GmbH and BEB Erdgas und Erdöl GmbH, a joint venture between Exxon Mobil and Deutsche Shell AG.

A 0.4 percent interest in an affiliated gas transport, processing and marketing gas in northwest Germany will allow Vermilion’s proportionate share of produced volumes to be processed, blended and delivered to designated consumers through an existing network of approximately 2,000 kilometers of pipeline.

It’s Vermilion’s first venture in Germany, which has a long history of oil and gas development, low political risk and strong marketing fundamentals. The acquired assets expand Vermilion’s European focus and its exposure to the strong fundamentals and pricing of the European natural gas market.

The assets are expected to produce at an average rate of approximately 18 million cubic feet per day (MMcf/d) net in 2013 and have estimated proved-plus-probable reserves of 10.1 million barrels of oil equivalent net as of year-end 2013.

The effective decline rate is estimated at approximately 16 percent annually, while the reserve life index is approximately 9.2 years.

Management expects after-tax cash flow of approximately USD27 million for 2014 based on current natural gas prices.

Vermilion still has financial flexibility, with approximately CAD250 million of available borrowing capacity under its credit facility and a net debt-to-fund flows from operations ratio of approximately 1.3 times post-acquisition.

Vermilion reported average production of 41,510 barrels of oil equivalent per day (boe/d) for the third quarter and record nine-month production of 41,020 boe/d.

Management also forecast that 2013 average production will be at the upper end of its guidance range of 40,500 to 41,000 boe/d.

Vermilion raised its estimate for 2013 capital guidance from the original CAD485 million to CAD530 million, due primarily to the foreign exchange impact of a weaker Canadian dollar than at the time of original guidance.

Although the weaker loonie has driven up capital spending, it’s also resulted in higher Canadian fund flows from operations (FFO) from its foreign business units. And Vermilion remains on track to fully fund dividends and CAPEX, excluding the Corrib project, from FFO.

Vermilion continued to benefit from strong pricing based on its significant exposure to oil and European gas. This exposure, coupled with steady production and execution, generated third-quarter FFO of CAD165.6 million, or CAD1.63 per share. Year-to-date FFO was up 21 percent to CAD503.4 million as of Sept. 30, 2013.

Regarding Corrib, management revised upward its peak production estimate for the natural gas project offshore Ireland from 54 MMcf/d, or 9,000 boe/d, to approximately 58 MMcf/d, or 9,700 boe/d, following successful subsea well operations completed during the third quarter of 2013.

On the back of recent acquisitions and in view of a potential delay in timing of first gas at Corrib, Vermilion plans CAPEX of CAD555 million for 2014, focused on oil and liquids projects and high-netback European natural gas development. Management expects to see organic production growth of 4 percent to 6 percent in 2014. Combined with its recent acquisition in the Netherlands and the proposed acquisition in Germany, management forecast 2014 average daily production of between 45,000 and 46,000 boe/d, representing annual production growth of approximately 10 percent to 12 percent compared to 2013.

Its European exposure providing a spectacular complement to its solid Canadian operation, Vermilion Energy is now a buy under USD56 for long-term growth and income.

Too Late the Goodbye

Atlantic Power Corp’s (TSX: ATP, NYSE: AT) cash available for distribution was up 33.9 percent for the third quarter, 8.8 percent on a year-to-date basis and has already surpassed full-year guidance of USD85 million to USD100 million.

Management expects a negative figure in the fourth quarter due to the timing of interest payments and stepped-up capital expenditures. And approximately USD37 million of cash available for distribution this year is from discontinued assets and won’t recur in 2014.

The quarterly payout ratio was 29 percent, down from 120.1 percent a year ago. For the first nine months of 2013 the payout ratio was 42.9 percent, down from 98.1 percent for the prior corresponding period. The full-year payout ratio is tracking to 65 percent to 75 percent.

As for operations, Atlantic reported an availability factor of 94.9 percent for the third quarter and 94.3 percent for the year to date, both down slightly compared to 2012. But on a year-to-date basis generation from Atlantic’s wind, hydro and thermal facilities are slightly ahead of expectations.

But we’re dealing now with an investment thesis that’s dramatically different than the one that Atlantic Power supported as recently as November 2012, when CEO Barry Welch indicated the then-current annualized dividend rate of CAD1.15 was sustainable, based on the company’s ability to re-contract now-sold Florida projects.

In February 2013, along with its announcement of 2012 results, management cut its 2013 project-adjusted EBITDA guidance and eviscerated its dividend.

This is a turnaround story for aggressive investors who either have a long time horizon or are trading to profit from short-term bounces. This is no longer a reliable income generator for dividend-focused, conservative investors.

Atlantic made good on four of the five benchmarks we’ve been using to guide our analysis of the stock since late February 2013. But the failure to announce a new project is an indication of management’s heightened focus on debt reduction and balance sheet repair.

There is not likely to be a new project announcement anytime soon. Management’s focus is on “optimizing” performance at existing projects. Atlantic plans to invest approximately USD20 million during 2013 and 2014 on these initiatives and expects an EBITDA contribution on a run-rate basis in 2015 of at least USD6 million.

The costs of optimization are likely to drive the 2014 payout ratio above 100 percent. Re-contracting in New York for Selkirk and in Ontario for the Tunis project remains problematic. Power-purchase agreements covering both projects expire in 2014.

During its third-quarter conference call management noted that one or more of the options being considered as it seeks to reduce debt and strengthen the balance sheet would result in a “significantly” higher 2014 payout ratio. Any further asset sales will also result in reduced cash flow.

And “these or other actions” it may take to achieve its financial objectives “could have an adverse impact on the dividend level.”

Cutting the dividend again may help Atlantic Power survive as a going concern for the long term. But I think it’s time for dividend-focused investors to move on from the company.

There are simply too many unanswered questions right now, and this will be reflected in a volatile share price in the near term. Atlantic Power is a sell.

Conservative Roundup

Artis REIT (TSX: AX-U, OTC: ARESF), which owns and operates a diversified portfolio of commercial assets, posted third-quarter same property net operating income (NOI) growth of 3.8 percent.

Property NOI was up 23.7 percent compared to the third quarter of 2012 to CAD78.6 million and 27.7 percent on a year-to-date basis to CAD221.9 million.

Funds from operations (FFO) per unit rose 15.2 percent to CAD0.38, while year-to-date FFO per unit was up 15.6 percent as of the end of the third quarter to CAD1.11.

The payout ratio for the third quarter based on FFO was 71.1 percent; for the first nine months of the year it was 73 percent, down from 84.4 percent for the prior corresponding period.

Portfolio occupancy increased 70 basis points from the end of the second quarter to 95.8 percent as of Sept. 30, 2013.

Artis’ interest coverage ratio improved to 2.93 times from 2.49 a year ago, while total debt-to-gross book value was 48.7 percent as of Sept. 30, 2013, down from 51.5 percent at the end of 2012.

During the third quarter Artis acquired two commercial properties for USD109.6 million, reaching a gross book value of CAD5.1 billion, up from CAD4.4 billion as of Dec. 31, 2012.

Artis had CAD86.7 million of cash and cash equivalents on hand and CAD80 million available on it revolving term credit facility as of Sept. 30, 2013, sufficient to sustain operations and is well-positioned to take advantage of accretive investment opportunities.

The unit price has recovered from its mid-2013 low but remains under pressure due to lingering fears of the impact rising interest rates will have on REIT operations as well as investors’ desire to hold them as opposed to government bonds with yields that now look more attractive on a relative basis.

Artis, for its part, continues to build its book of assets and to generate solid income for unitholders. At current levels it’s yielding 7.6 percent. Buy Artis REIT under USD16 if you don’t already own it.

RioCan REIT (TSX: REI, OTC: RIOCF), enduring the same pressure in the equity market as its fellow Canadian REITs, has also posted solid operating and financial results for the third quarter.

Operating funds from operations (FFO) increased by 8 percent compared to the third quarter of 2012 to CAD124 million. On a per-unit basis operating FFO were up 3 percent to CAD0.41.

Operating FFO for the first nine months of 2013 were up 13 percent compared to the prior corresponding period to CAD368 million.

RioCan’s concentration in Canada’s six major markets increased to 72.2 percent as of Sept. 30, 2013, from 67.5 percent as of Dec. 31, 2012. Overall occupancy was 97 percent at the end of the quarter, up slightly from 96.7 percent at the end of the second quarter.

RioCan renewed 708,000 square feet in the Canadian portfolio at an average rent increase of 11.2 percent. That’s down from the 12.9 percent average for the same period in 2012. The renewal retention rate in Canada for the quarter was 91.1 percent.

Development highlights include zoning approval for a 1 million square foot project in Toronto, the condominium portion of which is 90 percent pre-sold based on the aggregate dollar value of the 623 units. Work on the project will commence in 2014.

The 386,000 square foot Sage Hill new format retail center in Calgary, Alberta, is 72 percent leased and remains on track for completion in 2016.

During the third quarter the REIT acquired interests in seven income properties in Canada and the US totaling 409,000 square feet at an aggregate purchase price of approximately CAD97 million. Thus far in 2013 RioCan has acquired interests in 29 income properties in Canada and the US totaling 2.8 million square feet at a total purchase price of approximately CAD783 million.

RioCan also established near-total control over its US portfolio this year, which should provide a platform for organic growth. A steady stream of finished developments over the next few years should drive continued FFO growth. RioCan REIT, currently yielding 5.8 percent, is a solid buy under USD27.

Bird Construction Inc (TSX: BDT, OTC: BIRDF), though it suffered a mini-slump in early November following the release of its third-quarter numbers, has rebounded from the 2013 low that attended management’s report of second-quarter financial and operating numbers.

On Aug. 29, 2013, Bird closed at a two-year low of CAD11.20 on the TSX; today it’s trading around CAD12.55.

The factor that caused the mid-summer selloff–the recognition of a loss on one fixed-price construction project that had a number of execution issues–drove third-quarter net income to CAD3.6 million on construction revenue of CAD367.3 million, compared to CAD18.1 million and CAD396.8 million, respectively in the third quarter of 2012.

Adjusted net income for the three months ended Sept. 30, 2013, was CAD4.2 million, compared to CAD19.3 million in 2012.

Bird’s backlog at the end of the quarter was CAD1.104 billion, up from CAD1.074 billion as of Dec. 31, 2012. The company was awarded several construction contracts totaling approximately CAD275 million during the quarter. The new work involves both civil and building construction projects for industrial customers in northern Alberta.

Bird declared a monthly dividend rate at CAD0.0633 per share for December 2013 and January and February 2014.

Setting aside the single, troublesome contract, results for the third quarter and 2013 to date would have been in line with management’s expectations. These expectations of course include current market conditions.

Growth in the backlog, with significant contract awards in the industrial segment, is a good sign for Bird heading into 2014. Bird Construction remains a buy under USD14.50.

EnerCare Inc (TSX: ECI, OTC: CSUWF) reported an 8 percent increase in third-quarter revenue to CAD77.6 million. Earnings before interest, taxation, depreciation and amortization (EBITDA) grew by 4 percent to CAD38.5 million, as management noted that the attrition rate in its rentals portfolio declined by 14 percent.

EnerCare posted its best third-quarter retention performance since 2007.

EnerCare should benefit from passage in the Ontario Legislature of Bill 55, a direct response to aggressive and deceptive door-to-door waterheater rental sales, which ranked second on the Ontario Ministry of Consumer Services’ consumer complaints list in both 2011 and 2012.

The bill doubles the “cooling-off” period after a consumer’s decision to switch waterheater providers and disallows delivery of any equipment during the now 20-day period.

It also requires a supplier to reimburse the customer for all cancellation, return or removal fees when the 20-day cooling-off period isn’t observed and gives enhanced authority to the Minister of Consumer Services to make regulations governing supplier conduct and agreement content, such as a requirement that companies confirm sales by making scripted and recorded telephone calls to the customer.

This effort to bolster consumer protections should help EnerCare’s efforts to combat attrition in its waterheater business.

EnerCare’s all-in payout ratio rose to 75 percent for the quarter from 61 percent a year ago due to higher CAPEX, higher taxes and higher dividend payments.

EnerCare’s key metrics continue to improve, as it expands its rentals business to include value-added facets such as heating, ventilation, air conditioning and cooling products.

Sales for the core rentals business grew by 1.4 percent to CAD47.2 million, primarily due to a January 2013 rate increase. Submetering revenue increased by 19 percent to CAD30.3 percent on the strength of increased commodity charges and more installed units.

Building a foundation for another dividend increase in early 2014, EnerCare is a buy under USD10.

Student Transportation Inc’s (TSX: STB, NSDQ: STB) results for the first quarter of fiscal 2014–for the period Jul. 1, 2013, through Sept. 30, 2013–reflect the normal seasonality of the school bus transportation industry. It’s basically summer vacation, and July and August include low revenues due to schools being closed but higher costs due to the company’s growth.

Nevertheless, first-quarter operating results exceeded internal expectations.

Student Transportation posted an 18.7 percent increase in revenue for the first three months of fiscal 2014 to USD73.1 million.

The company reported a net loss of USD8.8 million, or USD0.11 per share, compared to a net loss of USD7.6 million, or USD0.10 per share, a year ago. Management, due to recent efforts to expand the business and prior experience under similar circumstances, expected higher losses.

Student Transportation’s loss on an adjusted EBITDA basis narrowed to USD1.5 million from USD3.5 million a year ago.

Summer revenues did tick up, and there were more operating days during the back-to-school month of September. Price increases and new bus additions also contributed.

For the first time these factors more than offset the higher offseason costs naturally associated with the startup of school operations and additional staff associated with the growth secured for the new school year.

Management noted firming prices for a number of contracts, a reduction in fuel costs due to lower prices and the impact of alternative fuels as well as some momentum for its SchoolWheels.com business.

CFO Patrick Walker described the quarter as “one of, if not the best, start we have had entering a new year from an operating and financial standpoint.”

Student Transportation secured many new contracts and renewals of existing contracts, some that now stretch out 10 to 15 years, supporting contracted revenue visibility. Student Transportation is a buy under USD7.

Aggressive Roundup

Shares of Ag Growth International Inc (TSX: AFN, OTC: AGGZF) have been in a solid uptrend since early May 2013, when management noted that the effects of an historic 2011-12 drought would begin to wear off and the US Dept of Agriculture first started talking about a record crop year.

Results for the three months ended Sept. 30, 2013, confirm that farmers are again stocking up on grain-handling, storage and conditioning equipment, as sales grew 40 percent over the prior corresponding period to a quarterly record of CAD116.5 million.

Quarterly adjusted EBITDA surged by 86 percent to surpass CAD23 million for the first time in company history. Net profit of CAD12.7 million for the quarter marked a 96 percent increase over the third quarter of 2012. Earnings per share of CAD0.95 were 83 percent higher than in the year-ago quarter.

The numbers reflect a return to normal market conditions in North America as well as management’s efforts to maintain the business and position it to rebound once the drought passed.

It’s significant that Ag Growth’s year-to-date results for 2013 surpassed the prior corresponding period despite the fact that it had only one drought-free quarter this year compared to two drought-free quarters last year at this time.

Ag Growth is sitting a record backlog for this time of year as well as a record quote log and record crop production in North America. The main business driver for Ag Growth is volume of grain grown, not grain prices.

Progress on the international front has been substantial, as third-quarter sales for the unit were up 76 percent year over year. With the drought behind it, Ag Growth should now enjoy solid earnings and dividend growth due to its expanding global profile rather than merely rely on it to mitigate depressed North American activity.

Ag Growth is currently involved in a review by the Canada Revenue Agency (CRA) of the company’s corporate conversion transaction completed in June 2009.

As part of the ongoing review Ag Growth has received notification that the CRA intends to challenge the tax consequences of the conversion transaction.

Ag Growth “remains confident in the appropriateness of its tax filing position and the expected tax consequences of the corporate conversion and intends to vigorously defend such position.”

The company’s response to the proposal letter, which describes the CRA’s objection on the basis of the acquisition of control and general anti-avoidance rules of the Income Tax Act (Canada), is due in late December.

Ag Growth has expressed confidence “in the appropriateness of its tax filing position and the expected tax consequences of the corporate conversion,” noting its belief “that the acquisition of control or the general anti-avoidance rules do not apply to [its] corporate conversion and intends to file its future tax returns on a basis consistent with its view of the outcome of the corporate conversion.”

Following receipt of Ag Growth’s response to the proposal letter, the CRA may then proceed with the Notice of Reassessment process. Ag Growth will have 90 days from any Notice of Reassessment to prepare and file a Notice of Objection, which would be reviewed by the CRA’s appeals division.

At that time Ag Growth would be required to pay 50 percent of the resultant tax liability and interest. For the period from the June 2009 conversion through Sept. 30, 2013, Ag Growth had utilized approximately CAD27 million of the tax attributes related to the conversion. If reassessed on all tax periods through Sept. 30, 2013, the 50 percent deposit would total approximately CAD13.5 million, excluding interest.

If the CRA is not in agreement with Ag Growth’s Notice of Objection, Ag Growth has the option to file its case with the Tax Court of Canada.

Ag Growth anticipates that legal proceedings through the various tax courts would take between two to four years. If the company is ultimately successful in defending its position any taxes, interest and penalties paid to the CRA will be refunded plus interest. If the CRA is successful any remaining taxes payable plus interest and any penalties will have to be remitted.

Potential financial consequences for Ag Growth are difficult to predict at this time, as the process has only just begun. We will continue to monitor the situation, as there is obviously a potential drag on cash flow.

In the meantime, based on its solid financial and operational rebound–and management’s discipline in making it possible–Ag Growth is a solid buy under USD40.

Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF) reported third-quarter distributable cash flow of CAD23.7 million, or CAD0.57 per unit, down from CAD24.3 million, or CAD0.58 per unit, a year ago.

Revenue slipped by 14.1 percent to CAD206.9 million due to softer results from Chemtrade’s International business, as North American results were in line with 2012 totals.

Earnings before interest, taxation, depreciation and amortization (EBITDA) were CAD37.5 million, up from CAD35.8 million in the third quarter of 2012. Net earnings were CAD20.4 million, nearly double the CAD10.6 million of a year ago due to fair value adjustments on the company’s convertible unsecured subordinated debentures and an income tax recovery.

Management noted that customer demand for product supports its view that economic activity in North America remains firm.

Sulphur Products and Performance Chemicals generated revenue of CAD151.5 million and EBITDA of CAD41.2 million compared with CAD158.1 million and CAD41.5 million, respectively, in 2012. The main reasons for the decrease in revenue were lower volumes of sulphur and sulphuric acid and lower prices of sulphur, partially offset by higher prices for other products within the segment relative to 2012.

Pulp Chemicals reported third-quarter revenue of CAD12 million versus CAD13.4 million in 2012 and EBITDA of CAD2.7 million versus CAD3 million last year. This was due to lower sales volumes of sodium chlorate.

International reported revenue of CAD43.4 million for the third quarter, down from CAD69.3 million in 2012 on lower prices and volumes for sulphur and sulphuric acid caused by the generally weak conditions in international markets. EBITDA for the quarter was CAD1.9 million, down from CAD3 million a year ago.

Chemtrade has also agreed to a deal that will basically double its size, as it will acquire New Jersey-based General Chemical Holding Co for USD860 million. The acquisition also expands Chemtrade’s North American water treatment capacity.

General Chemical manufactures sulphuric acid and other chemicals for customers operating in the water-treatment, pharmaceutical and the pulp and paper industries. The company’s EBITDA for the 12 months ended Sept. 30, 2013, were USD110 million on sales of USD390 million.

Chemtrade has secured a USD1 billion senior secured credit facilities to cover the purchase price and transaction costs. It also plans to raise CAD300 million via an equity issue, though lenders on the facility are “fully committed” to covering the acquisition should the equity raising not be completed prior to closing.

Chemtrade Logistics, which has surged in the aftermath of the announcement of the transformative General Chemicals deal, is now a buy under USD18.

Subsequent to its third-quarter earnings announcement Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF) reported that it surpassed its 2013 exit guidance of 124,000 barrels of oil equivalent per day (boe/d) in November, putting an exclamation point on what’s been a record year for the company.

Crescent Point has exceeded output targets all three quarters so far and is on good pace to beat fourth-quarter forecasts as well.

Much of what Crescent Point has been able to accomplish over the past two years has been driven by technological advancements the company has made in its continuing push to improve completions techniques.

Management has set a CAD1.75 billion capital development budget for 2014. Execution of the budget is expected to increase average daily production to 126,500 boe/d, with a 2014 exit production rate of 135,000 boe/d.

The 2014 capital program is consistent with Crescent Point’s five-year growth models, which forecast long-term production per share growth and dividend sustainability under a variety of commodity price scenarios.

Crescent Point posted average production of 117,963 barrels of oil equivalent per day (boe/d) for the third quarter, a company record, as funds from operations (FFO) surged 44 percent to CAD554.1 million, or CAD1.42 per share.

Crescent Point is a strong buy all the way up to USD48.

Enerplus Corp (TSX: ERF, NYSE: ERF), meanwhile, continues to build on its already apparent recovery from financial and operating difficulties that culminated in a 50 percent dividend reduction in mid-2012. The main aspect of the company’s turnaround is a shift away from legacy Canadian assets toward Marcellus and Bakken shale plays.

Third-quarter funds from operations (FFO) were up 45.3 percent compared to the prior corresponding period to CAD196.2 million, or CAD0.98 per share. Production for the period was up 7.5 percent to 87,729 barrels of oil equivalent per day (boe/d), as output from its North Dakota assets grew by almost 20 percent and exceeded management expectations.

In a Dec. 3, 2013, update Enerplus revised its full-year output guidance upward to 89,000 boe/d from a prior forecast of 87,500 due to strong performance in October and November.

Fourth-quarter output is tracking to 92,000 boe/d on higher natural gas production.

Management forecast a 2014 production increase of approximately 10 percent to 96,000 to 100,000 boe/d.

Capital spending is forecast at CAD760 million, 11 percent above from 2013 levels, with about two-thirds directed towards crude oil investments.

Crude oil production is expected to increase 12 percent. Growth in production from its Bakken/Three Forks and Marcellus properties will drive volumes attributable to US assets to more than 50 percent of total output. The production mix is expected to remain at 48 percent crude oil and natural gas liquids and 52 percent natural gas.

Enerplus also forecast declines in both operating costs and general and administrative costs per barrel of oil equivalent.

CEO Ian Dundas noted during an interview with Canada’s Business News Network that a payout increase this year is unlikely, though he did say that dividends are an important part of Enerplus’ capital structure. “Dividend increases would be great,” he said, “but they have to make sense financially.”

Enerplus’ focus at present is on boosting production growth on an efficient basis while reducing costs. Success will eventually translate into dividend increases.

Based on its solid production guidance for 2013 and 2014 Enerplus is now a buy under USD17.

Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF) posted a 22 percent increase in third-quarter production to 56,343 barrels of oil equivalent per day (boe/d), as funds from operations (FFO) were up 30 percent to CAD77 million.

FFO per share grew by 25 percent to CAD0.67, despite wet conditions delaying the start of the drilling season and low AECO gas prices.

Still the lowest-cost producer in the North American natural gas exploration and production business, Peyto is a buy under USD33.

Noranda Income Fund (TSX: NIF-U, OTC: NNDIF) reported a 4.6 percent increase in cash from operations. Zinc production grew by 1.2 percent to 61,331 metric tons, while zinc sales were up 9 percent to 66,420 metric tons.

Zinc premiums widened to USD0.084 from USD0.076, and sulphuric acid netbacks slipped some but remained strong at USD73 per metric ton. Noranda is a buy under USD6.

Parkland Fuel Corp (TSX: PKI, OTC: PKIUF), meanwhile, reported a 38 percent decline in adjusted EBITDA to CAD37.8 million due to lower refiner’s margins that fell to the low end of their five-year range and lower commercial activity, partially offset by positive results from the recently acquired Elbow River Marketing unit.

During the company’s presentation to analysts of third-quarter results CFO Michael Lambert noted that Parkland’s volumes are heavily weighted toward gasoline and that “the refiner’s margins on gasoline actually disappeared in the quarter.”

Management also noted that its sales team continues to have significant wins in the field; in the third quarter on the commercial side Parkland won roughly 80 million liters of new business that will positively impact fourth-quarter and 2014 results.

Volumes increased by 62 percent to 671 million liter, primarily due to recent acquisitions.

Parkland also announced the acquisition of SPF Energy Inc for approximately CAD110 million. SPF is anticipated to add CAD20 million in adjusted EBITDA and 1.1 billion liters of refined petroleum product annually.

Including the impact of the SPF acquisition, management’s guidance for adjusted EBITDA for 2014 to 2016 has been increased by CAD10 million.

Notably, all of management’s strategic cost reduction programs remain on track, though general and administrative costs rose 33 percent year over year primarily due to integration of newly acquired companies. Third-quarter operating costs were up largely as the result of the Elbow River Marketing, Sparling’s Propane, TransMontaigne and Magnum Oil acquisitions.

Regarding the “Parkland Penny” plan, introduced in 2012 as a roadmap to management goal of doubling normalized 2011 EBITDA of CAD125 million by 2016, CEO Robert Espey noted that the company is halfway to achieving that benchmark.

Parkland Fuel is a buy under USD18.