Sector Update: Energy


Energy stocks are ending mixed today with the NYSE Energy Sector Index declining about 0.1% while shares of energy companies in the S&P 500 are ahead 0.3% as a group. Crude oil for January delivery is up $1.00 at $93.72 per barrel while January natural gas is down a penny at $3.94 per 1 million BTU.

In company news, Cobalt International Energy Inc. ( CIE ) has fallen to some of its worst levels in nearly two years after initial test results from its Lontra No. 1 pre-salt discovery well apparently failed to impress investors.

The new well off the Angolian coast was drilled to a total depth of 4,195 meters, producing a stabilized daily flow rate of 2,500 barrels of condensate and 39 million cubic feet per day of gas. The flow rates were significantly restricted by the surface test facilities on the SSV Catarina drilling rig.

CIE executives acknowledged the well contains more gas than they expected, with CEO Joseph Bryant saying the company believes there is a potentially large emerging market for natural gas in Luanda, Angola's capital city.

Bryant also said CIE already has begun discussion with the project concessionaire on ways for simultaneous commercialization of both the liquids and the gas discovered from the Lontra field.

Shares last traded at around $18.56 each, down 16.51, earlier sliding as low as $18.34 - the lowest price for CIE stock since early 2012.

In other sector news,

(+) MPC, Deutsche Bank upgrade to Buy from Hold and boosts its price target by $28 to $108 a share, citing its best-in-class logistics system and "excellent" operations overall - which it believes is a key criterion for buying a refinery stock.

(-) PBR, Brazilian energy producer tumbles after The Wall Street Journal says the Brazilian government continues to keep a lid on fuel prices. Also, Credit Suisse cut its rating for the stock to Sell from Buy, citing PBR's timid price hike.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: CIE

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