Barrick Gold (ABX) will issue $3B in stock to eliminate all of its fixed-price gold hedges and a portion of its floating hedges, taking a $5.6B hit to third-quarter earnings.

To get an idea of the magnitude of this event, let us look at a few key facts:

Wood is one of the first known sources of heat and energy. We seem to have come back a full circle to where it all started from. The company that takes us back to this primitive fuel, albeit with modern technology is We Energies, a subsidiary of Wisconsin Energy Corporation (NYSE: WEC).

As gas prices have fallen to levels that equal production costs (including sunk cost), gas companies should look to curtail production. The rationale here is that the sunk cost (exploration and development cost) is written-down (depleted) on a unit-of-production basis.

Newfield Exploration Company (NFX) has announced a curtailment of production for the quarter-ending Sep-09 by 2.5 Bcfe. This is approximately 4% of the earlier guided production levels of 62.9-70 Bcfe.

Despite a loss in the 2nd quarter ended 30^th June 2009, Cytec Industries (CYT) stock has moved up 10% as investors seem be positive about the future.

Patterson-UTI Energy, Inc. (PTEN) reported a operating rig count of 60 for the month of May'09 and an average of 64 for the April-May'09. This is the lowest rig count reported by the company in the Gridstone Research coverage period beginning Mar'03.

From the oil and gas exploration and production industry perspective, the sharp decline in number of rigs for PTEN is not a very positive indicator for the future. Oil and gas fields have limited lives and lower spend on finding new reserves and developing existing reserves will lead to lower production in the future.

Cameron Enterprises (CAM) and Natco Group (NTG) boards reportedly have approved a merger proposal of 1.185 shares of Cameron common stock in return for each of Natco's approximately 20.3 million shares outstanding, giving Natco shareholders about 10% ownership of Cameron's outstanding shares.

The deal seems to be skewed in favour of Natco's shareholders based on the stock performance today and order backlog and net income for the recent periods.

Cemex (CX) is a leading global building materials player based in Mexico. The company has over the years diversified its revenue base smartly into other countries with Mexico accounting for only 18% of its revenues in 2008 from 37% in 2003.

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Potash Corporation of Saskatchewan Inc. (POT) reported 1st quarter profits of $308 million – down 46% y/y. This was triggered by a 51% decline in revenues to $923 million. Net income received a boost from tax writeback of $113 million. Pre-tax profits were down 74% at $195 million.

Revenue decline is despite a sharp rise in Potash prices – up 112% y/y to $640 per tonne for the North American market and up 79% y/y to $493 per tonne for the export market. Higher prices of potash and other fertilizers restricted usage as farm economics weakened in 4Q08 with farm product prices of peaks.

Halliburton (HAL) and Weatherford Intl (WFT) reported y/y drop in profits of 33% and 46% respectively for 1Q09. A drop in profit was expected as capital expenditure by their customers have been scaled down.

Margins for both companies have dipped sharply as revenues have dipped. What is surprising is that their margins seem to move in tandem across regions.

Marathon Oil Corporation (MRO) announced the completion of the sale of its wholly owned subsidiary, Marathon Oil Ireland Limited (MOIL) to PSE Ireland Limited, a subsidiary of Petronas for $180 million.

Source: Gridstone Research