HOUSTON (Reuters) - U.S. independent oil and gas companies Anadarko Petroleum Corp (APC.N) and Chesapeake Energy Corp (CHK.N) reported sharply lower quarterly profit on a steep drop in prices for natural gas and crude oil.
However, the more diversified Anadarko beat Wall Street expectations while Chesapeake, which is essentially a North American natural gas business, fell short on revenue.
The global economic slowdown has curbed demand for fuel to run power plants and factories. In response, U.S. natural gas stockpiles reached record levels, causing prices to fall 66 percent from the 2008 third quarter.
And U.S. oil prices which are now trading near $80 a barrel for the first time in a year averaged $68 a barrel last quarter, just over half that of a year ago.
Anadarko's third-quarter results were better than expected, and it raised its 2009 output forecast on improved operations and stable weather. Its shares rose 1.3 percent.
Chesapeake's quarterly profit also topped Wall Street estimates, but the company missed analysts' revenue projections and its shares fell 1 percent.
Meanwhile, oil and natural gas company Forest Oil Corp (FST.N) posted third-quarter results that missed market expectations, also hurt by lower commodity prices. [nBNG511894]
Huge supplies of natural gas prompted many energy companies to slow down drilling in North America. But that steep drop in the number of rigs have many analysts, companies and investors looking for a rebound in natural gas prices in 2010.
"It is amazing how much productivity these companies are getting with less money," Ray Deacon, analyst with Pritchard Capital, said. "Every single E&P company is growing production a lot more in 2010, and they are all basing their capex on $6 gas."
Anadarko is more diversified, with more oil production and deepwater operations in other parts of the world like West Africa and Brazil.
"The positive third-quarter results continue to demonstrate the value of Anadarko's portfolio, with strong performance from both our producing assets and deepwater exploration program," Anadarko Chairman and Chief Executive Officer Jim Hackett said in a statement.
Citing its improved operations and the lack of severe weather in the Gulf of Mexico, Anadarko said it now expects 2009 oil and gas output to be about 220 million barrels of oil equivalent, up 7 percent from a year ago.
Chesapeake's quarterly profit fell sharply from a year ago as lower natural gas prices hurt results and the year-ago period was boosted by a large gain related to hedging.
Net profit in the quarter was $186 million, or 30 cents per share, compared with $3.29 billion, or $5.62 per share in the same period a year ago.
Excluding one-time items, the Oklahoma City, Oklahoma company had earnings of $440 million, or 70 cents per share. On that basis analysts on average had expected a profit of 65 cents per share, according to Thomson Reuters I/B/E/S. Continued...
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