Sharply lower income from crude oil refining and marketing led to a 55% drop in Marathon Oil Corp.’s third quarter 2002 net income to $87 million, or 28 cents per diluted share, compared to $193 million, or 62 cents/share in 3Q2001. Results included a $7 million after-tax loss on the early extinguishment of $144 million of long-term debt, a $61 million one-time deferred tax adjustment related to an increase in tax rates in the UK, a $15 million after-tax gain related to the disposition of production interests in the San Juan Basin, and a $9 million after-tax loss on a contract settlement. Third quarter 2001 results included a $126 million after-tax loss related to the sale of Marathon’s heavy oil assets in Canada. Marathon CEO Clarence P. Cazalot said while the industry continues to be “challenged by difficult refining and marketing conditions, Marathon made progress in delivering on our business strategy. During the third quarter, we had encouraging exploration success while also making significant progress in strengthening our core areas and progressing our integrated natural gas strategy, which is creating a platform for Marathon to deliver sustainable value growth.” Marathon bought Enron’s rights to deliver 54 Bcf/year of liquefied natural gas to El Paso’s Elba Island import terminal near Savannah, GA. Marathon’s third quarter oil and gas sales averaged 384,000 boe/d. Production available for sale averaged 401,000 boe/d in line with guidance issued with the second quarter earnings.
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AGL Posts Sharply Higher 3Q Earnings, Raises 2002 Estimates
AGL Resources Inc. posted better than expected third quarter earnings and raised estimates for the year on Thursday. Net income for the quarter rose 96% to $9.4 million, or $0.17/share, compared with $4.8 million, or $0.09/share. Thomson FirstCall consensus estimates for the quarter were $0.14/share.
AGL Posts Sharply Higher 3Q Earnings, Raises 2002 Estimates
AGL Resources Inc. posted better than expected third quarter earnings and raised estimates for the year on Thursday. Net income for the quarter rose 96% to $9.4 million, or $0.17/share, compared with $4.8 million, or $0.09/share. Thomson FirstCall consensus estimates for the quarter were $0.14/share.
Cash Falls on Weekend Demand Decline, Despite Futures Rally
Cash prices moved sharply lower on Friday for the Columbus Day weekend despite the surprisingly rapid rise in the natural gas futures market. While November futures ended the day up more than 30 cents, mild weekend weather and weak demand left cash with nowhere to go but down. Most points tumbled 10-20 cents, which put many locations back down near bidweek levels.
October Futures Climb Sharply on Technicals, Crude Rally, Storm Shut-ins
The October natural futures contract plateaued at $3.467 at the end of regular trading Friday, up 13.8 cents from the prior day on a major rebound off a key support level on Thursday at $3.19. Observers pointed to a strengthening in the overall petroleum complex Friday due mainly to Iraq’s rejection of renewed United Nations inspections. In addition, Tropical Storm Hanna in the Gulf of Mexico was forcing some minor production curtailments, and some technical factors were helping to channel futures prices higher.
Axe Continues to Fall on Energy Trading Staff at Williams, PNM, Reliant
The body count of lost energy traders and related support staff has climbed sharply in the past two weeks after Williams Cos. downsized its staff by another 210 employees, Reliant Resources Inc. cut close to 135, and Albuquerque-based PNM Resources Inc. eliminated 85 positions. The new cuts followed those by Houston’s UBS Warburg Energy, which fired 100 of its energy trading staff, and Duke Energy Corp. said it was considering reducing its 500-member trading force to “fit” the current conditions.
Mirant Shares Jump After CEO’s Earnings Forecast, Financial Plan
Mirant shares rose sharply last Monday and remained in positive weekly territory on Friday after CEO Marce Fuller said the company would beat earnings forecasts and should have a solution to its credit woes in place before the end of the summer. However, the solution is likely to look a lot different than what was expected a few months ago when the idea was first announced, she said.
EPR: 1Q Trading Results Fall Sharply, Distribution Earnings Flat
The gas and power marketing and trading business put in a poor financial performance in the first quarter compared to the extremely profitable first quarter of 2001, and gas and electric distribution utilities came in with only average results, according to a detailed analysis by Energy Performance Review (EPR), a Maryland-based information services firm. EPR examined aggregate first quarter results for 117 gas and power companies.
Devon Earnings Fall 80%, While Production Jumps 66%
While sharply lower oil and gas prices took an 80% chunk out of Devon Energy’s earnings in the first quarter, the company’s oil and gas production soared, following the additions of Anderson Exploration and Mitchell Energy.
Williams Reports Sharply Lower Earnings, Trading Results
Williams was unable to match its performance from last year’s first quarter when there were significantly higher energy prices. Net income in the first quarter fell 46% as it faced not only lower prices, but also the expected bankruptcy of its former communications unit (WCG filed for Chapter 11 protection last week) and the sale of one of its large pipeline systems to lower its debt and placate the credit rating agencies.
