Sector Update: Energy

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Energy stocks are narrowly higher this afternoon with the NYSE Energy Sector Index rising about 0.2% while shares of energy companies in the S&P 500 are ahead about 0.3% as a group. Crude oil for February delivery is up $1.19 at $99.25 per barrel while January natural gas is up 19 cents to $4.44 per 1 million BTU.

In company news, Cobalt International Energy ( CIE ) is down 8% at $14.35 a share, earlier sliding to a new 52-week low of $13.75 and extending a 32% decline since Nov. 22 through last night's close after announcing plans to plug and abandon an exploratory wellbore in the Gulf of Mexico.

CIE and partner Total SA ( TOT ) had drilled the Aegean No. 1 exploratory well in the Keathley Canyon exploration block around 300 miles off the Louisiana coast to a total depth of 34,701 feet through the inboard Lower Tertiary formation without encountering commercial levels of hydrocarbons. CIE, as operator of the project, owns a 60% interest while TOT holds the remaining 40% stake.

The dry hole stands in contrast to other deepwater operators in the region recently announcing major discoveries. ConocoPhillips ( COP ) yesterday said it found significant oil discovery at its Gila prospect in the Keathley Canyon, joining recent discoveries at its Tiber, Shenandoah and Coronado prospects in Lower Tertiary trend.

COP holds a 20% working interest in the Gila well, operated by BP plc ( BP ). BP has said more drilling is necessary to determine how big - and potentially how valuable - the new discovery may be. COP shares are down 0.4% today while BP is ahead around 0.9%.

In other sector news,

(-) SM, (+1.7%) Forecasts 16% year over year increase in 2014 production to 51.0 mln to 53.5 mln barrels of oil equivalent, with liquids comprising 53% of yearly production. Approves $1.9-bln capital program, up about 15% over year-ago levels.

(-) ROSE, (-6.7%) Approves $1.1-bln capital budget for 2014, with roughly two-thirds spent in the Eagle Ford shale formation in southern Texas. Full year production seen in a range of 60,000 to 65,000 barrels per day - up at least 9.1% over expected Q4 levels.



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.

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This article appears in: Investing , Commodities

Referenced Stocks: BP , CIE , COP , TOT

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