By Steve Gelsi
Energy stocks fell Thursday as a stream of earnings reports from Occidental Petroleum, Diamond Offshore, Noble Corp. and others failed to ignite buying in the sector as oil prices pulled back.
Pressuring crude futures, OPEC's secretary general was quoted as saying as cartel may formally raise some of its production quotas at its December meeting. Crude futures fell 72 cents to $80.65 in recent action.
"If this price continues, if we see the stocks go back to the normal level, if we see there is a real world economic growth, I am sure our member countries will take the decision to increase production," Abdalla Salem el-Badri told reporters. He subsequently said another condition to increased output would be an end to floating storage.
The NYSE Arca Oil Index fell 0.8% to 1,101.
The NYSE Arca Natural Gas Index dropped 1.6% to 528.
The Philadelphia Oil Service Index fell 0.6% to 206.
Among energy stocks in the spotlight, Occidental Petroleum (OXY) fell 1.5% to $80.34. The oil major said its net income fell by more than half, but it managed to boost production as its recently discovered oil field in Kern County, Calif., increased its output.
Diamond Offshore (DO) rose 0.3% to $106.15. The offshore driller beat managed to grow its earnings by 17% despite the recession, while surpassing Wall Street expectations.
Among other earnings by energy names, Ensco International Inc. (ESV) said net income fell to $149.7 million, or $1.05 a share, from $282.3 million, or $1.97 a share, in the year-ago period. Revenue fell to $425.4 million from $619.5 million. Analysts expected earnings of $1.15 a share on revenue of $453 million, according to an average calculated by FactSet Research. Shares fell 0.4% to $47.37.
Meanwhile, Noble Corp. (NE) said third-quarter net income rose to $1.63 a share from $1.42 in the year-earlier quarter. The latest quarter reflects a tax benefit of 5 cents a share to settle tax assessments and for other items. Revenue rose 5.1% to $905.6 million. Analysts had estimated Noble would make $1.55 a share on $910.1 million of sales, according to the FactSet survey. Shares rose 1% to $43.05.
Finally, Range Resources Corp. (RRC) said it swung to a third-quarter loss of $29.8 million, or 19 cents a share, from net income of $285 million, or $1.81 a share in the year-ago period. Revenue fell to $202 million from $347.7 million.
The Fort Worth, Texas oil and gas producer booked a loss of $53 million on mark-to-market unrealized derivatives, compared to a gain of $294 million in the year-ago period.
Range Resources boosted natural gas production by 13% over the year-ago period to 437 million cubic feet equivalent a day. Range's average realized price including all derivative settlements for oil and gas was $6.35 per million cubic feet equivalent in third quarter, compared to $9.02 per mcfe in the third quarter. Shares fell 2.2% to $57.15.
-Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com