BANGALORE, Nov 5 - Independent oil and gas firms EOG Resources (EOG.N), Petrohawk Energy (HK.N), Plains Exploration (PXP.N) and Continental Resources (CLR.N) all reported sharply lower quarterly profits due to a slump in prices.
The global economic slowdown has reduced demand for natural gas and crude oil, swelling inventories in the third quarter and hammering prices, which cut into the producers' profits.
It is also hammering prices, which cut into the producers' profits. But a dramatic recovery in crude prices in recent months has seen companies gear up for more production.
EOG, the fourth-largest independent U.S. oil and gas company, increased its production outlook after reporting a sharp drop in third-quarter profit. [ID:nN05136688]
Eighth-ranked Petrohawk reported late on Wednesday quarterly earnings below expectations, increased its fourth-quarter production forecast, and said 2010 production would rise 43 percent on a pro forma basis. [ID:nWEN6139]
And lower production costs drove better-than-expected profits at the two smaller companies. Continental reported a 21 percent fall in production expenses, while costs at Plains Exploration & Production fell 9 percent. [ID:nBNG547697] [ID:nBNG501424]
Given the steep drop in commodity prices from a year ago, when oil and gas prices hit record highs, average realized prices at both those companies halved.
Shares of Plains and Petrohawk rose more than 1 percent, while Continental rose by 0.3 percent.
A rebound in oil and gas prices off lows is leading exploration and production companies to lift production plans.
Continental upped its 2009 capital expenditure budget to $415 million from $390 million, saying 2009 production of 13.3 million barrels of oil equivalent would top its prior outlook.
The company forecast 2010 capex of $650 million, which it expects to drive 2010 production growth of 10 percent.
"Most of our plays are very strong and we are very excited about gas prices starting to move up," Chief Executive Harold Hamm said in a conference call with analysts. "We feel that in 2010 we can have significant movements in gas price and definitely in 2011."
Continental has sizable acreage position in the Bakken shale with financial capacity to convert into cash flow, Jefferies analyst Subash Chandra wrote in a note to clients.
Plains forecast a 2010 capital budget of $900 million to $1.1 billion, versus a 2009 forecast of $1.55 billion, and said it continued to target 20 percent reserve growth through 2011 and production growth of 8 to 10 percent in 2010 and 2011.
"The 2010 capital investment is focused on continued development of our Haynesville Shale acreage, our large California oil business and our Texas Panhandle, South Texas and Gulf of Mexico asset areas," Plains Chief Executive James Flores said in a statement.
Separately, natural gas pipeline company Spectra Energy Corp (SE.N) posted a 35 percent drop in quarterly profit due to the energy price slump, but it topped Wall Street forecasts.
The global economic slowdown has reduced demand for natural gas and crude oil, swelling inventories in the third quarter and hammering prices, which cut into the producers' profits.
It is also hammering prices, which cut into the producers' profits. But a dramatic recovery in crude prices in recent months has seen companies gear up for more production.
EOG, the fourth-largest independent U.S. oil and gas company, increased its production outlook after reporting a sharp drop in third-quarter profit. [ID:nN05136688]
Eighth-ranked Petrohawk reported late on Wednesday quarterly earnings below expectations, increased its fourth-quarter production forecast, and said 2010 production would rise 43 percent on a pro forma basis. [ID:nWEN6139]
And lower production costs drove better-than-expected profits at the two smaller companies. Continental reported a 21 percent fall in production expenses, while costs at Plains Exploration & Production fell 9 percent. [ID:nBNG547697] [ID:nBNG501424]
Given the steep drop in commodity prices from a year ago, when oil and gas prices hit record highs, average realized prices at both those companies halved.
Shares of Plains and Petrohawk rose more than 1 percent, while Continental rose by 0.3 percent.
A rebound in oil and gas prices off lows is leading exploration and production companies to lift production plans.
Continental upped its 2009 capital expenditure budget to $415 million from $390 million, saying 2009 production of 13.3 million barrels of oil equivalent would top its prior outlook.
The company forecast 2010 capex of $650 million, which it expects to drive 2010 production growth of 10 percent.
"Most of our plays are very strong and we are very excited about gas prices starting to move up," Chief Executive Harold Hamm said in a conference call with analysts. "We feel that in 2010 we can have significant movements in gas price and definitely in 2011."
Continental has sizable acreage position in the Bakken shale with financial capacity to convert into cash flow, Jefferies analyst Subash Chandra wrote in a note to clients.
Plains forecast a 2010 capital budget of $900 million to $1.1 billion, versus a 2009 forecast of $1.55 billion, and said it continued to target 20 percent reserve growth through 2011 and production growth of 8 to 10 percent in 2010 and 2011.
"The 2010 capital investment is focused on continued development of our Haynesville Shale acreage, our large California oil business and our Texas Panhandle, South Texas and Gulf of Mexico asset areas," Plains Chief Executive James Flores said in a statement.
Separately, natural gas pipeline company Spectra Energy Corp (SE.N) posted a 35 percent drop in quarterly profit due to the energy price slump, but it topped Wall Street forecasts.
