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Tuesday, August 08, 2006

News From the Energy Patch

By William Trent, CFA of Stock Market Beat


The data coming in from the Energy Information Administration are beginning to look like the recent critical juncture is being resolved by declining days supply of inventory. In other words, we’d look for days of inventory to continue the long-term downtrend rather than the recent swing up. That, in turn, supports our No Conspiracies Needed theory, which says that oil prices are likely to continue rising, and there isn’t much OPEC could do about it if they wanted to.

Earnings reports from the energy industry offered a plea of no contest. Those that missed did so because of production mishaps, which in turn means ever-tighter supply.
Watch List news:

ConocoPhillips: Exceeding Expectaions: Oil Prices, Burlington Deal Q&A: James Mulva, chairman and CEO, ConocoPhillips

Analyst Raises ConocoPhillips Estimates - UBS Investment Research raised its estimates for ConocoPhillips after the energy compnay posted strong second-quarter results, especially in its U.S. downstream operations, which saw earnings rise 48% year-over-year and 362% sequentially.

Headwaters (HW) saw a decline in revenue and profit. The company said it is on track to achieve its earnings guidance of $2.00 to $2.70 per share for fiscal 2006. Analysts have a consensus earnings estimate of $2.13 per share for fiscal 2006. The news caused Wedbush Morgan to lower their price target, though they maintained their buy rating. Motley Fool says the outlook remains choppy.
PG&E (PCG) is feeling the heat:

Unmerciful heat bakes Bay Area

BART running in slower motion

Energy Concerns Continue; Two Found Dead in Hot Home

Heatwave: 12,000 powerless in Fresno

Power supplies stretched to the breaking point

PG&E warns of dropping energy reserves again today

Southwest Bakersfield Without Power

How To File A PG&E Claim Form

20,000 customers seethe as PG&E works on power

At Least 120 Deaths Linked to Record CA Heat

PG&E: Brace yourself for shocking power bills

Thousands without power in Paso Robles

Helix Energy Solutions (HLX) reported record second quarter net income of $69.1 million, or $0.83 per diluted share. This represents an improvement of 166% over last year’s second quarter net income.

Statoil ASA, Norway’s largest oil and gas producer, said second-quarter profit climbed a less-than- expected 44 percent and lowered its full-year production forecast because of maintenance and delays. The shares fell. “Their second-quarter production was very disappointing and it’s negative that they’re cutting their full-year production target just one month after saying they would uphold it'’ at a presentation in June, said John Olaisen, an analyst at Carnegie. “Their production costs are rising sharply and more than expected.'’ He rates the stock “underperform.'’

Norsk Hydro Q2 profit climbs 30 pct, as forecast

Other news:

Oil execs speak on transformed energy industry - High prices, war in the Middle East and global warming concerns have transformed energy from a dull industry taken for granted by many Americans into a top-of-the-mind pocketbook issue for consumers.

Chevron, Like Its Rivals, Reports Higher Profits

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