EOG Resources Inc., Anadarko Petroleum Corp. and other gas producers with concentrations of assets in the Rocky Mountain region may report “ugly” third-quarter results because of low fuel prices and idling of wells, a Wachovia Capital Markets analyst said.
“Expect weak pricing and potential production shortfalls in the Rockies,” David Tameron, a Wachovia analyst in Denver, said Tuesday in a note to clients. “We expect every Rockies producer will report some level of production shut-in.”
Chesapeake Energy Corp. and other natural-gas producers slowed production last month because of slumping prices for the heating and power-plant fuel. Gas prices are lower in the Rockies region than elsewhere in the U.S. because of a lack of pipeline capacity. In the third quarter, prices averaged $2.71 per million British thermal units at Opal, Wyo., a major Rockies hub, compared with $6.18 at Louisiana’s Henry Hub.
Tameron cut his estimate for third-quarter earnings per share at Houston-based EOG to 82 cents from $1.04. He lowered his estimate for Anadarko, based near Houston, to 81 cents from 86 cents.
Another company cited in the report was Oklahoma City-based Devon Energy Corp. Tameron said Devon earned an estimated $1.45 a share, rather than the $1.49 he predicted earlier.
Shares of EOG, Anadarko and Devon all rose Tuesday.
