Rob Black's Energy Stock Report

Oilfield services company Baker Hughes (BHI) said its quarterly profit surged in the face of booming oil prices and strong demand from energy producers.

The number of rigs drilling for oil and natural gas in North America rose by 45 to 2,261, according to a weekly update by Baker Hughes. The quantity of active oil rigs rose by three to 302, while the number of gas rigs increased by 27 to 1,408. The U.S. rig count rose by 31 to 1,714, and the number of Canadian rigs increased by 14 to 547. The quantity of offshore rigs rose three to 96.

Independent oil and gas producer Anadarko Petroleum (APC) said profit surged, boosted by stronger crude oil prices and a tax liability adjustment that added 32 cents per share to its bottom line.

Power company Constellation Energy (CEG), whose acquisition by rival FPL Group (FPL) is in question because of regulatory uncertainty, said earnings fell on rising costs.
FPL Group itself posted a higher second-quarter profit as solid results from new projects offset a weaker performance from its traditional utility business.

The Andersons Inc. (ANDE), a diversified company with interests in grain, ethanol and plant nutrient businesses, said income edged down to $10.3 million, or 66 cents per share.

Comments

[steve pomeranz:]

I wonder how this report lines up with the following report issued recently.
Oil Rigs Stage Exodus From Gulf of Mexico
° Summary: The Energy Information Administration expects the price of natural gas in the US to rise from $6.10 per BTU today to over $10 by the end of 2007, because drilling rigs in the Gulf of Mexico are being transferred to more lucrative markets. That will reduce natural gas production and drive up prices, which are determined by local supply and demand in contrast to oil which is a global market. The number of rigs in the Gulf of Mexico has fallen from 148 in 2001 to 90 now, and the number is expected to fall further as more rigs are sent to the Persian Gulf where oil companies are offering higher day-rates for rigs..
° Comment on related stocks/ETFs: Rig operators mentioned in the article that benefit from the rise in day rates include GlobalSantaFe (GSF), Ensco International (ESV), and Transocean (RIG). Gulf of Mexico oil producers that could be negatively impacted by higher drilling rates include BP (BP) and Apache Corp. (APA). The rise in drilling rates is broadly positive for the energy infrastructure stocks.

2006 Jul 31 03:16 PM