Monday, April 16, 2012

McMoRan jumps; energy stocks rise

NEW YORK (MarketWatch) � McMoRan Exploration Co. shares rose on better-than-expected financial results reported Tuesday, while low natural gas prices cast a partial shadow over a positive session for energy stocks.

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Setting a bullish tone for energy stocks, the Dow Jones Industrial Average DJIA �rose 60 points, falling back from a triple-digit gain earlier in the session. !

Within the 30-stock benchmark, energy components Exxon Mobil Corp. XOM � and Chevron Corp. CVX �rose 1% and 0.6% respectively. Crude-oil futures reclaimed $100 a barrel. Natural gas futures fell 7% to $2.52 per million British thermal units. Read more in Futures Movers.

Among the energy-sector equity gauges, the NYSE Arca Oil Index XX:XOI �rose 1.3%, the Philadelphia Oil Service Index OSX �advanced 0.7% and the NYSE Arca Natural Gas Index XX:XNG �moved up 0.1%.

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Among individual advancers, Denbury Resources DNR �rose 4.4%, Rowan Cos. RDC �moved up by nearly 6%, Valero Energy Corp. VLO �rose 4.8% and Noble Corp. NE �advanced by 4%.

Some natural gas firms came under pressure, however, as prices for the fuel fell to a multi-year low. Ultra Petroleum UPL �dropped back by 2.5%, while Chesapeake Energy Corp. CHK �and Consol Energy CNX �both declined 2.8% and Cabot Oil & Gas COG �declined 1.2%.

Hess Corp. HES �rose 1.5% after research firm Howard Weil upgraded the energy company to outperform from perform.

Shares of McMoRan Exploration MMR �jumped nearly 5%.

The company, which has been focusing on oil and gas prospects via drilling extra-deep wells, said it�s moving closer to proving its exploration theories correct.

�We are enthusiastic about the progress of our deep-drilling activities, which has provided confirmation of our geologic model,� the company said.

McMoRan reported a fourth-quarter profit of 19 cents a share, while analysts surveyed by FactSet Research had expected the! company to lose 13 cents a share.

McMoRan also said it expects first-quarter production of 155 million cubic feet equivalent a day, ahead of the consensus estimate of 128.9 million cubic feet equivalent.

Further, the company expects to increase its 2012 production estimates following a test of its Davy Jones well in the Gulf of Mexico during the first quarter.

Provident Energy rallies on $3 billion buyout

U.S.-listed shares of Provident Energy Ltd. �rallied 22% to $11.34 on Tuesday after Pembina Pipeline Corp. CA:PPL � said it would buy Provident in a deal valued at about $3.1 billion.

Calgary-based Pembina said it expects it�ll be able to increase its cash flow per share, increase dividends and reduce its dividend payout ratio, after it closes the acquisition.

The deal, which was announced on Monday, will create a leading North American energy infrastructure company, the companies said.

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