NEW YORK (AP) - Following is a summary of top stories in the energy sector
Thursday afternoon.
Stimulus Package Gives Oil a Boost
Oil futures jumped more than $2 a barrel after the Bush administration and
congressional leaders agreed to an economic stimulus plan that will hand out tax
rebates of $600 to $1,200.
Prices rose after the government reported a drop in heating oil supplies.
But futures took off, posting their largest gains in over three weeks, when the
agreement was announced.
Light, sweet crude for March delivery rose $2.42 to settle at $89.41 a
barrel on the New York Mercantile Exchange.
The weekly inventory report from the Energy Department's Energy Information
Administration showed supplies of distillates -- including heating oil and
diesel fuel -- fell 1.3 million barrels last week.
Gasoline inventories expanded by 5 million barrels, and crude inventories
rose by 2.3 million barrels.
February gasoline added 3.2 cents to settle at $2.2828 a gallon on the
Nymex, and February heating oil gained 5.32 cents to settle at $2.4763 a gallon.
In London, March Brent crude rose $2.45 to settle at $89.07 a barrel on the ICE
Futures exchange.
February natural gas rose 18.1 cents to settle at $7.802 per 1,000 cubic
feet on the Nymex.
Natural Gas Supplies Shrink
Natural gas in storage in the U.S. fell last week but is about 7.4 percent
above the five-year average for this time of year.
The Energy Information Administration said in its weekly report that
natural-gas inventories in the lower 48 states fell by 155 billion cubic feet to
nearly 2.54 trillion cubic feet. That was slightly below the analysts' consensus
for a draw of 158 billion cubic feet.
The inventory level was above the five-year average of about 2.36 trillion
cubic feet in underground storage, but below last year's storage level of more
than 2.78 trillion cubic feet, according to the government data.
Allis-Chalmers Bronco Buyout Expands International Markets
Allis-Chalmers Energy Inc., which provides oil and natural gas exploration
services and equipment, plans to buy Bronco Drilling Co.
The total purchase price includes $280 million in cash and $157.8 million in
stock. The $16.33 per-share price represents a 22 percent premium to Bronco's
closing price on Wednesday.
Calyon Securities analyst Mark Urness thinks the price is right and will
give both companies long-term strategic advantages. For Bronco, it means
international diversification. The deal "is expected to facilitate the
relocation of many rigs to Latin America and North Africa," he said in a note to
investors.
It also brings Allis-Chalmers more exposure to the land rigs business.
"Although the land drilling business has seen recent weakness with margins
declining from the 2006 peaks, they are still very attractive with average
return on investment capital for Bronco expected to be close to 47 percent for
2007," Urness said.
SunPower Outlook Darkens Investors' Mood
SunPower shares sank after the solar company issued a first-quarter earnings
outlook below analysts' forecasts. SunPower lost $5.04, or 6.8 percent, to
$69.21. The company's fourth-quarter results exceeded Wall Street forecasts, but
SunPower gave a range for first-quarter earnings that falls below analysts'
estimates.
"SunPower has beaten estimates/raised guidance every quarter and we expect
this trend to continue in 2008," Lehman Brothers analyst Vishal Shah said in a
note to investors. "However, we do not expect this market to tolerate even a
slight miss for a company that trades at a premium valuation."
Noble Investors Look to Jackups and New CEO
Noble Corp. shares surged after the oil drilling contractor reported a 74
percent jump in profit last quarter, driven by sharply higher drilling revenue.
The stock added $1.34, or 3 percent, to $46.07.
"We maintain that Noble's fleet is well positioned in strong geographic
jackup markets," said Friedman, Billings, Ramsey analyst Robert MacKenzie.
Jackup rigs are drilling platforms that are towed out to sea and than jacked up
from legs on the seabed. They represent the largest part of Noble's fleet.
Investors and Noble's customers also want to know if new Chief Executive
David Williams keeps the company on the path set by his predecessors. If nothing
else, they might settle for the status quo. "In our most recent study, the
company rated number one in both international markets and deepwater
applications, two of the industrys most high-profile and high-growth areas,"
said Doug Sheridan, managing director of EnergyPoint Research, which tracks
customer satisfaction with oil services companies.
OGE Suspends IPO Plans
OGE Energy Corp., parent company of utility Oklahoma Gas and Electric Co.,
will delay the planned initial public offering of spin-off OGE Enogex Partners
LP because of market volatility.
The IPO of 7.5 million common units was expected to price this week between
$18 and $20 per unit. OGE Energy expects to proceed with the IPO in the future,
when it thinks the timing is right.
OGE Enogex was formed by OGE Energy to further develop natural-gas midstream
assets and operations. OGE Enogex owns and operates about 2,283 miles of
intrastate natural-gas transportation pipelines and two natural-gas storage
facilities with about 23 billion cubic feet of total working gas capacity,
according to filings with the Securities and Exchange Commission.
The company also owns and operates about 5,474 miles of natural-gas
gathering pipelines and six natural-gas processing plants with about 720 million
cubic feet per day of total inlet capacity.
Iraq Oil Exports Increase
Iraq's oil exports rose 9.2 percent last year, the country's oil ministry
said, largely because improved security allowed pumping to resume through a
pipeline from northern oil fields.
The rise in exports reached nearly 600 million barrels, or an average of 1.6
million barrels per day. Iraq pumped about 2.5 million barrels a day before the
U.S.-led invasion in 2003.
Part of the export rise came from the repair of a key northern pipeline from
the Kirkuk oil fields to Turkey's Ceyhan terminal on the Mediterranean Sea. The
line was damaged by sabotage five years ago.
--Compiled by AP Business Writer Greg Stec. Questions or comments can be
directed to gstec@ap.org.
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