BANGALORE, Aug 4 - U.S. oil and gas exploration and production companies including Bill Barrett (BBG.N) and Denbury Resources (DNR.N) gave upbeat forecasts for the rest of year given continuing strength in oil prices and falling oilfield service costs.
In the second quarter, the price for West Texas Intermediate crude oil averaged just under $60 per barrel, up from $43 per barrel last quarter but less than half the price during the same quarter a year ago.
On Tuesday, EXCO Resources Inc (XCO.N), W&T Offshore Inc (WTI.N), Berry Petroleum Co (BRY.N), and Unit Corp (UNT.N) reported better-than-expected quarterly results, helped by lower costs, and indicated that the market appears to be stabilizing.
"Lower service costs have been a key factor. A lot of the companies have beat because the production is coming back and the costs are coming in lower," Stifel Nicolaus analyst Amir Arif said by phone.
The analyst pointed out that some companies think service costs may still decline by another 5 to 10 percent, adding they may not pick up with the increased drilling activity.
Analyst Jim Byrne of BMO Capital Markets also believes that oilfiled service costs have fallen enough and are approaching a point where they will no longer have a huge impact on the bottom line of exploration and production companies.
RESULTS BEAT STREET
EXCO Resources Inc (XCO.N) posted an adjusted profit of 29 cents a share, compared to Street view of 24 cents a share.
"Although we expect our third and fourth quarter 2009 leasing, drilling and completion activities in East Texas and North Louisiana area to increase, our actual corporate expenditures for 2009 will remain at approximately $500 million," the company said.
EXCO also said it would continue with plans to sell certain non-strategic assets in 2009 and forecast proceeds from asset sales and joint ventures in excess of $1.3 billion in the third quarter.
Houston-based W&T Offshore posted an adjusted second-quarter loss of 7 cents a share, while analysts on average had expected a loss of 49 cents a share.
Berry Petroleum reported an adjusted profit of 38 cents a share for the second quarter, higher than the average analyst estimate of 31 cents a share. [ID:nWNBB8563]
CEO Robert Heinemann said in a statement that the company's 2009 capital program is proceeding as planned and results are in line with expectations.
Unit Corp posted a second quarter net income of 68 cents a share, compared with average analysts forecast of 48 cents a share. [ID:nWNBB8654]
Ultra Petroleum Corp (UPL.N) backed its full-year natural gas and crude oil production view of between 172 and 177 billion cubic feet of natural gas equivalent (Bcfe).[ID:nWNBB8589]
Pioneer Natural Resources Co (PXD.N) also posted a narrower- than-expected quarterly loss. For the latest second quarter, the company reported a loss of 12 cents a share, compared with loss estimate of 21 cents, before items, according to Reuters Estimates. [ID:nWNBB8965]
RESULTS MISS, OUTLOOK POSITIVE
While Bill Barrett and Denbury Resources missed market expectations, they remained upbeat about the second half of the year.
Bill Barrett raised it full-year oil and gas production outlook to 86 Bcfe to 88 Bcfe, up from its prior forecast of 84 Bcfe to 87 Bcfe.
For the second quarter, the company reported an adjusted net income of $15.4 million, or 34 cents a share. Analysts, on average, had expected earnings of 38 cents a share. [ID:nWNBB8429].
Denbury, which came in a cent below analysts view, at 16 cents a share, before items, backed its full-year production outlook. [ID:nWNBB8597]
"Our tertiary production continues to grow and we remain on track to achieve our projected 2009 forecast of 24,500 barrels per day for that period," the company said.
W&T Offshore shares closed up 6 cents at $11.69 while Unit Corp shares closed at $34.28, up 2.2 percent. Shares of Berry Petroleum closed down 13 cents at $25.67 and Denbury shares closed at $17.58 Tuesday on the New York Stock Exchange.
In the second quarter, the price for West Texas Intermediate crude oil averaged just under $60 per barrel, up from $43 per barrel last quarter but less than half the price during the same quarter a year ago.
On Tuesday, EXCO Resources Inc (XCO.N), W&T Offshore Inc (WTI.N), Berry Petroleum Co (BRY.N), and Unit Corp (UNT.N) reported better-than-expected quarterly results, helped by lower costs, and indicated that the market appears to be stabilizing.
"Lower service costs have been a key factor. A lot of the companies have beat because the production is coming back and the costs are coming in lower," Stifel Nicolaus analyst Amir Arif said by phone.
The analyst pointed out that some companies think service costs may still decline by another 5 to 10 percent, adding they may not pick up with the increased drilling activity.
Analyst Jim Byrne of BMO Capital Markets also believes that oilfiled service costs have fallen enough and are approaching a point where they will no longer have a huge impact on the bottom line of exploration and production companies.
RESULTS BEAT STREET
EXCO Resources Inc (XCO.N) posted an adjusted profit of 29 cents a share, compared to Street view of 24 cents a share.
"Although we expect our third and fourth quarter 2009 leasing, drilling and completion activities in East Texas and North Louisiana area to increase, our actual corporate expenditures for 2009 will remain at approximately $500 million," the company said.
EXCO also said it would continue with plans to sell certain non-strategic assets in 2009 and forecast proceeds from asset sales and joint ventures in excess of $1.3 billion in the third quarter.
Houston-based W&T Offshore posted an adjusted second-quarter loss of 7 cents a share, while analysts on average had expected a loss of 49 cents a share.
Berry Petroleum reported an adjusted profit of 38 cents a share for the second quarter, higher than the average analyst estimate of 31 cents a share. [ID:nWNBB8563]
CEO Robert Heinemann said in a statement that the company's 2009 capital program is proceeding as planned and results are in line with expectations.
Unit Corp posted a second quarter net income of 68 cents a share, compared with average analysts forecast of 48 cents a share. [ID:nWNBB8654]
Ultra Petroleum Corp (UPL.N) backed its full-year natural gas and crude oil production view of between 172 and 177 billion cubic feet of natural gas equivalent (Bcfe).[ID:nWNBB8589]
Pioneer Natural Resources Co (PXD.N) also posted a narrower- than-expected quarterly loss. For the latest second quarter, the company reported a loss of 12 cents a share, compared with loss estimate of 21 cents, before items, according to Reuters Estimates. [ID:nWNBB8965]
RESULTS MISS, OUTLOOK POSITIVE
While Bill Barrett and Denbury Resources missed market expectations, they remained upbeat about the second half of the year.
Bill Barrett raised it full-year oil and gas production outlook to 86 Bcfe to 88 Bcfe, up from its prior forecast of 84 Bcfe to 87 Bcfe.
For the second quarter, the company reported an adjusted net income of $15.4 million, or 34 cents a share. Analysts, on average, had expected earnings of 38 cents a share. [ID:nWNBB8429].
Denbury, which came in a cent below analysts view, at 16 cents a share, before items, backed its full-year production outlook. [ID:nWNBB8597]
"Our tertiary production continues to grow and we remain on track to achieve our projected 2009 forecast of 24,500 barrels per day for that period," the company said.
W&T Offshore shares closed up 6 cents at $11.69 while Unit Corp shares closed at $34.28, up 2.2 percent. Shares of Berry Petroleum closed down 13 cents at $25.67 and Denbury shares closed at $17.58 Tuesday on the New York Stock Exchange.
