Markets: News  

Hess up, ConocoPhillips off; energy stocks flatten

NEW YORK (MarketWatch) -- Hess Corp. and Chesapeake Energy turned in solid gains Wednesday, as energy stocks rose from lows earlier in the session on a late-day upturn in crude oil prices.

Crude-oil futures (CLU2) settled higher by 47 cents, or 0.5%, to $88.97 a barrel on the New York Mercantile Exchange, after spending most of the U.S. session in the red on a surprise increase in weekly inventories. See Futures Movers.

Among the major gauges in the energy sector at the closing bell, the NYSE Arca Oil Index (XOI) edged up by 0.1% and the NYSE Arca Natural Gas Index (XNG) ended about flat, while the Philadelphia Oil Service Index (OSX) declined 0.5.%.

The Energy Select Sector SPDR Fund(XLE) , which tracks energy stocks in the S&P 500, reversed course and ended with a slim gain of 0.1%.

Leading the group into positive territory, Hess Corp. (HES) rose about 3.5%.

The company's second-quarter production of 429,000 barrels of oil equivalent a day beat the analysts' consensus targets of 398,000 barrels for daily output, according to data compiled by FactSet Research.

Weighing on the group, Peabody Energy(BTU) dropped 7.3% and CONSOL Energy(CNX) dropped 5.5%. On the up side, Chesapeake Energy Corp. (CHK) rose 2.7%.

Among big cap oil firms Exxon Mobil Corp. (XOM) rose 0.8% as Chevron Corp. (CVX) moved down by 0.2%. The oil majors are components of the Dow Jones Industrial Average, which moved higher by 59 points after three straight days of heavy losses.

Exxon Mobil is on deck to release its second-quarter results on Thursday. Forecasts call for the oil major's profit to fall from year-ago levels. See Exxon's earnings preview.

ConocoPhillips shares dip after production misses target

Shares of ConocoPhillips (COP) dropped 2.6% after the company reported a second-quarter profit that fell to $2.27 billion, or $1.80 a share, from $3.4 billion, or $2.41 a share, in the year-ago period.

On an adjusted basis, profit would have dropped to $1.22 a share from $1.64 a share. Quarterly revenue fell to $15.17 billion from $17.67 billion, while total production fell to 1.54 million barrels a day of oil equivalent from 1.64 million barrels a day.

Analysts had been looking for ConocoPhillips to earn $1.20 a share in the latest quarter, with daily production pegged at 1.57 million barrels, according to the FactSet-derived consensus.

Management also said production's on track for the quarter and that its major growth projects are advancing.

ConocoPhillips' results for the June quarter include one month of earnings from its refining unit, Phillips 66(PSX) , which was spun out of the company on May 1.

Weatherford falls sharply on tax issues

Weatherford International Ltd. (WFT) shares fell 8.8% after the oil service firm's second-quarter profit of 25 cents a share missed the Wall Street estimate of 28 cents a share, according to data compiled by FactSet. Analysts at Tudor Pickering said the results were "ugly," partly because of continuing problems with Weatherford's income-tax accounting.

Weatherford identified $41 million of additional tax expense in the second quarter as part of an accounting review. The company said it may make $15 million in further adjustment related to its income taxes. Weatherford said it won't finish its tax accounts for the six months ended June 30 until it concludes work on the adjustments.

Shell inks deals with Cnooc, CNPC

Royal Dutch Shell(RDS.A) rose 0.4% after it said it signed two offshore production-sharing contracts with CNOOC Ltd. (CEO) and the China National Petroleum Corp. for a new development phase of the Changbei gas field in China.

Shell also signed an agreement with Cnooc to allow it to participate in two Shell exploration blocks off the coast of Gabon in West Africa.