ADVFN - Advanced Financial Network.
HOME» NYSE » Q » KWK Stock Price » KWK Stock News

Quicksilver Share News

 Quicksilver Resources, Inc. Stock Price
KWK Stock Price
 Quicksilver Resources, Inc. Stock Chart
KWK Stock Chart
 Quicksilver Resources, Inc. Stock News
KWK Stock News
 Quicksilver Resources, Inc. Company Information
KWK Company Information
 Quicksilver Resources, Inc. Stock Trades
KWK Stock Trades

Exxon Mobil's Natural-Gas Push Could Hit Small US Producers

--Exxon's natural-gas drive could prompt consolidation in the sector, analysts say --Deutsche Bank sees Exxon becoming the Wal-Mart of U.S. natural-gas sector --Some analysts say Exxon doesn't control enough rigs to significantly influence prices By Isabel Ordonez Of DOW JONES NEWSWIRES HOUSTON -(Dow Jones)- Exxon Mobil Corp.'s (XOM) decision to leave its U.S. natural-gas output untouched despite low commodity prices may push some smaller producers out of the business, force consolidation in the industry and make the oil company an even more powerful force in the oilpatch. The biggest U.S. natural-gas producer puzzled some analysts and investors Tuesday when during its earnings report, it said it had no plans to curtail its output despite that a glut has driven the price of the commodity to its lowest level in more than a decade. Other companies including Chesapeake Energy Corp. (CHK), the second-largest U.S. natural-gas producer, recently have announced drilling cutbacks as natural-gas production in some areas becomes a money-losing business. The Irving, Texas, company argued although it is doing its best to switch drilling to oil-rich areas, it still needs to keep drilling for natural gas to meet previously agreed-to contractual terms that let it retain expensive land leases. Raising some market observers' eyebrows, it also said drilling for natural gas in some areas is still profitable even at current prices. Natural gas recently was trading at $2.53 per million British thermal units, sharply down from the nearly $14 per MMBtu it traded at in July 2008. Regardless of the reasons behind the company's decision, some analysts noted Exxon's move has the potential to put smaller competitors out of business, contributing to a second-hand production decline and an eventual recovery for natural-gas prices in years ahead. The decision could "drive out marginal operators, perhaps consolidate the industry and rationalize long-term production," Paul Sankey, an analyst at Deutsche Bank, said in a note to clients. That could turn Exxon into the Wal-Mart Stores Inc. (WMT) of the U.S. natural-gas sector, he added, referring to the strategy of the world's largest retailer to keep sales prices lower than competitors' by reducing profit margins. It is highly unlikely Exxon Mobil's main motivation to keep the foot on the gas pedal is "to bankrupt" rivals in the natural-gas sector, but intentionally or not the company's decision could put a strain on small rivals that can't compete with its deep pockets, Fadel Gheit, an analyst with Oppenheimer & Co., said. "Small companies are learning that drilling next door to the world's largest oil company has consequences," Gheit said. "While they are scrambling with low natural-gas prices, Exxon is digging in its heels." Natural-gas companies such as Quicksilver Resources Inc. (KWK), Goodrich Petroleum Corp. (GDP) or EXCO Resources Inc. (XCO)--which are trying to turn themselves into oil companies--are among the most vulnerable, said Subash Chandra, an analyst with Jefferies & Co. "Unfortunately, they are finding that doing the switch is expensive and that it takes a long time," Chandra said. "They may need to merge between themselves or try to get a buyer in order to survive because this is not a sellers' market for natural-gas producers," Chandra said. Exxon Mobil spokesman Alan Jeffers said the company's decision to keep drilling for natural gas is a response to the company's "positive long-term view" of natural-gas markets. "Our conclusion remains that natural gas is expected to be one of the fastest-growing demand segments, despite the near-term supply-and-demand situation," he said. Faced with the possibility of a longer period of depressed natural-gas prices due to unchanged production from giants such as Exxon, smaller companies will continue to switch their drilling rigs toward oil-liquid areas to avoid going out of business, Jeff Eshelman, spokesman for the Independent Petroleum Association of America, said. The organization represents thousands of independent oil-and-gas producers across the U.S. Other analysts don't think Exxon's decision will greatly influence the natural-gas market despite the company being the biggest kid on the block in the U.S. natural-gas business. "The number of rigs it has running is not enough to significantly influence the market," Jason Gammel, an analyst with Macquarie Capital, said. Gammel estimated about 30 of the 70 drilling rigs Exxon said it plans to run across U.S. shale areas this year are focused on natural-gas production. "That is a small number to really affect supply to the degree that will change prices," Gammel said. There were more than 700 rigs drilling for gas in the U.S. as of last week, according to Baker Hughes Inc. (BHI). Gammel noted Exxon may have other motivations to keep drilling for gas. Unlike shale pioneers such as Chesapeake that already have mastered the development and production of shale gas and now are switching to oil, Exxon needs to keep learning. The company said Tuesday a significant part of its drilling is aimed at understanding the geology of the properties it acquired in 2010 when it paid $25 billion for XTO Energy. The oil giant also needs to utilize the many engineers that came with the acquisition. "Certainly Exxon's cash flow is very robust and it will keep drilling to keep them busy," Gammel said. -By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; isabel.ordonez@dowjones.com

Stock News for Quicksilver (KWK)
DateTimeHeadline
08/15/201417:34:14SUBSCRIBERS: Please Disregard Point72 Headlines Published Thursday...
08/15/201417:31:33REPEAT & CORRECT: Point72 Eliminates Blackberry Stake, Sells...
08/14/201416:45:36Point72 Asset Management Sells Stakes in Sirius, Zynga and Yahoo
03/05/201409:08:23Southwestern Energy to Buy Colorado Assets for $180 Million
11/15/201308:53:19D. E. Shaw & Co. LP 3Q 13F: Largest Eliminations
11/15/201308:53:15D. E. Shaw & Co. LP 3Q 13F: Largest Eliminations -2-
11/15/201308:53:15D. E. Shaw & Co. LP 3Q 13F: Largest Sales
11/15/201308:53:15D. E. Shaw & Co. LP 3Q 13F: Largest Purchases
11/15/201307:10:27AQR Capital Management 3Q 13F: Largest Purchases -2-
11/15/201307:10:23AQR Capital Management 3Q 13F: Largest Sales
11/05/201307:59:59Eni Signs US Unconventional Oil Deal with Quicksilver
06/26/201309:15:10U.S. HOT STOCK FUTURES: HOT STOCKS TO WATCH
03/29/201315:00:29Tokyo Gas To Buy 25% Stake in Shale Gas Project
03/18/201307:30:04U.S. Stocks Seen Posting Losses on Cyprus Bailout
09/24/201211:16:20Quicksilver Agrees To Joint Venture With Shell Unit In Colorado
08/06/201212:19:28Weaker Oil Prices Challenge U.S. Companies' Migration To Crude
08/01/201212:40:07Volatility Rocks U.S. Stock Market, Halts Some Trading
02/10/201208:54:58US STOCK FUTURES: HOT STOCKS TO WATCH
02/03/201214:43:05Exxon Mobil's Natural-Gas Push Could Hit Small US Producers
12/27/201109:23:53US Stock Futures: HOT STOCKS TO WATCH

Quicksilver and other New York Stock Exchange stock quotes are delayed by at least 20 minutes.
All other stock price data is delayed by at least 15 minutes unless otherwise stated.
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Contact Us | Copyright 1999-2007 ADVFN PLC. | Privacy Policy | Investment Warning | Data accreditations | Investor Relations

ADVFNADVFN ItalyADVFN GermanyADVFN FranceADVFN BrazilADVFN JapanADVFN UKADVFN US noad