Tuesday, June 23, 2009

Energy stocks end higher on upbeat Chevron comments

Energy stocks end higher on upbeat Chevron comments

By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) -- Energy stocks ended in the green Tuesday, with shares of petroleum producers and oil drillers leading the way on bullish comments on Chevron and ConocoPhillips sustained shares of oil producers.
The NYSE Arca Oil Index /quotes/comstock/10t!xoi.x (XOI 900.31, +12.22, +1.38%) of major oil firms rose 1.4% to 900. The NYSE Arca Natural Gas Index /quotes/comstock/10t!xng.x (XNG 404.57, +0.28, +0.07%) rose fractionally to 405. The Philadelphia Oil Service Index /quotes/comstock/10y!i:osx (OSX 156.55, +2.16, +1.40%) rose 1.4% to 157.
Crude oil futures regained their footing and rose $1.21 to $68.71.
ConocoPhillips /quotes/comstock/13*!cop/quotes/nls/cop (COP 41.25, +0.82, +2.03%) rose 2% to $41.25 after Bernstein Research upgraded shares of the oil major to outperform from market perform.
Analyst Neil McMahon set a price target of $54 a share, about 25% above the stock's current level, and praised the company's wildcat prospects..


ConocoPhillips and Karoon Energy recently announced a successful wildcat well in the Browse basin in offshore Australia. The next well in the three well program will test the Kontiki prospect, also in Australia.
"ConocoPhillips expects to be able to produce these resources through its Darwin LNG facility, significantly improving the project profitability, and increasing the company's future LNG exposure," McMahon said in a note to clients.
Chevron /quotes/comstock/13*!cvx/quotes/nls/cvx (CVX 65.96, +0.20, +0.30%) rose 0.3% to $65.96 after it said it drew its first significant oil from the Frade Field in Brazil, with the target of 90,000 barrels of crude oil a day in 2011.
Deutsche Bank analyst Paul Sankey said he met recently with Chevron management, who were touting the company's new energy projects and tame costs.
"Management were upbeat, because operations are running well; massive new developments -- Tengiz Sour Gas injection, Agbami -- are ramping successfully, and their start ups are on time and on budget, with oil due from Gulf of Mexico Tahiti and Brazil's Frade over the coming months," Sankey said in a note to clients. "Look for a 2009 volume target raise and cost control comments on their second-quarter call."
Meanwhile, Petroleos de Venezuela is inquiring about the circumstances surrounding Chevron's control of the Boscan oil field, one of the most important oil blocks in the country, Dow Jones Newswires reported.
Steve Gelsi is a reporter for MarketWatch in New York.

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