Energy Stocks Leading Market Advance; Stone Energy Higher, Overcoming Earlier Losses On Deep-Water Dry Hole

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Top Energy Stocks

XOM +0.6%, near 52 week highs.

CVX +0.5%

COP +1%

SLB +0.7%

OXY +0.4%

Energy stocks are leading the U.S. markets higher with the NYSE Energy Sector Index advancing 0.6% while shares of energy companies in the S&P 500 are up nearly 0.8% as a group. Crude oil for February delivery is down 65 cents at $98.64 per barrel while February natural gas is down 15 cents to $4.28 per 1 million BTU.

In company news, Stone Energy Corp. ( SGY ) has recovered after opening at $33.60 and touching a day low $33 and is now up 1.3% at near $34.20 (albeit off a day high $34.69) after the oil and gas company late yesterday reported drilling a dry in the deepwater Gulf of Mexico off the Louisiana coast.

SGY said its 25%-owned San Marcos prospect was drilled to around 28,500 feet without encountering any hydrocarbons. The well will be plugged and abandoned while work on two other deepwater wells in nearby fields in the Gulf of Mexico are set to complete next month.

SGY's Amethyst prospect, located on Mississippi Canyon 26, is roughly 77% complete and is now within 4,700 feet of its 20,000-foot target depth. The deep gas Tom Cat prospect, located on West Cameron 176, has reached 14,000 enroute to a targeted 16,000-foot depth. Like the Amethyst prospect, SGY holds a 100% working interest in the Tom Cat project with both wells expected to finish drilling by late January.

SGY shares recently fetched near $34.20 apiece, up 1.3%. The stock has a 52-week range of $17.34 to $37.96, again trading around $35 a share in recent sessions following a 17% slide off its best levels of the past year in October and early November - a period that included the company floating $775 million of 7.5% senior notes due 2012 in a pair of public offerings.

In other sector news,

(+) PSX, (+3.3%, hit record highs) Sells its Flow Improver unit that makes additives helping crude oil flow through pipelines to Berkshire Hathaway (BRK-A, BRK-B) in exchange for 19 mln of the 27.2 mln shares now held by BRK-A. Overall, the deal is worth about $1.4 bln.

(-) URG, (-1.4%) Uranium miner issues updated preliminary economic assessment for its Lost Creek project in Wyoming, including a 16% increase in measured resources to 4.85 mln pounds of U308. Inferred resources rose 65% to 4.74 million pounds of ore.



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