Sector Update: Energy Stocks, Crude Oil All Rebounding; Gastar Exploration Sinking on Plans for Stock Offering
Top Energy Stocks
Energy stocks were broadly higher Tuesday, with the NYSE Energy Sector Index jumping nearly 1.6% while shares of energy companies in the S&P 500 were ahead more than 1.7% as a group. Crude oil for October delivery was up $1.74 at $94.66 per barrel while October natural gas was up 4 cents to $3.97 per 1 million BTU.
In company news, Gastar Exploration Inc. ( GST ) was declining Tuesday after the natural gas producer announced plans to sell 17 million shares of its common stock in a public offering, while also forecasting a nearly 95% jump in daily production during FY15 over the now-concluded Q2 ended June 30.
GST shares were down more than 7.5% at $7.07 each, earlier declining to a session low of $6.86 a share. The stock has traded within a 52-week range of $3.90 to $9.10 a share, rising over 69% during the past year through Monday's close.
The company also expects to issue 30-day options to underwriters participating in the deal to buy up to 2.55 million additional shares to cover possible over-allotments. It expects to use net proceeds to repay debt and funding its drilling and development program along with other general corporate purposes.
Separately, the company last night said it has approved a $257.3 million capital budget in FY14, with all but $34.6 million planned for drilling, completion and infrastructure costs.
Based on planned FY15 capital spending and projected drilling, GST is forecasting net average daily production of between 15.5 million to 18.0 million barrels of oil equivalent per day, up from around 9.0 million barrels on average during Q2.
In other sector news,
(+) TNK, (+10.7%) Initiated with Buy rating at Deutsche Bank.
(-) ACI, (-3.2%) Chinese authorities reportedly planning to ban low-grade coal.
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