Shares of oil and natural gas producer Southwestern Energy Inc., which have rallied this year, fell Friday along with oil prices and the company revealed a new venture in unproven territory.
THE SPARK: The company reported late Thursday that net income in the second quarter rose to $167.5 million, or 48 cents per share, from $122.1 million, or 35 cents per share, a year earlier. That beat analysts' expectation of 45 cents per share, according to FactSet.
But average initial production dropped 7 percent from a year ago at new gas wells in the Fayetteville shale formation. The rates were the lowest for new wells since the second quarter of 2009. The company blamed shorter lateral lengths, the increasing number of wells, and new locations.
ANALYSIS: Michael Bodino of Global Hunter Securities LLC said several factors were pushing the stock lower Friday, including concern about the lower initial production rates in the Fayetteville shale wells and a forecast of "limited" production growth in the third quarter compared with the second quarter.
Source: Bloomberg
No comments:
Post a Comment