Energy Stocks Take Familiar Path Into The Red
16 January 2009 - 3:05AM
Dow Jones News
By Steve Gelsi
Energy stocks took a familiar path lower on Thursday as crude
traded below $37 a barrel and natural gas future slipped under the
level of $5 per thousand cubic feet for the first time in more than
two years.
Shares of oil producers, natural gas producers and drilling
firms also took their cue from the broad market, weighed down by
woes in the financial sector.
The Amex Oil Index (XOI) fell 2% to 902. Component Repsol (REP)
dropped 5% to $18.62.
The Amex Natural Gas Index (XNG) subtracted 1.8% to 356, ahead
of weekly inventory data. In the previous session, natural gas
prices fell below $5 per thousand cubic feet for the first time
since September 2006.
The Philadelphia Oil Service Index (OSXX) rose fractionally at
119. Component Exterran (EXH) fell 4% to $21.15.
Crude prices fell $1.14 to $36.14 a barrel.
Venezuelan President Hugo Chavez is courting Western oil giants'
expertise to help the country boost production in the face of lower
petroleum prices, The New York Times reported Thursday.
Chavez officials have been soliciting bids from Chevron (CVX),
Royal Dutch Shell (RDSA) and Total (TOT) as the country looks to
maintain oil revenue flowing into social programs that help boost
Chavez's support from voters.
"If re-engaging with foreign oil companies is necessary to his
political survival, then Chavez will do it," Roger Tissot, an
authority on Venezuela's oil industry at Gas Energy, told the
newspapers. "He is a military man who understands losing a battle
to win the war."
Chavez nationalized the Western companies' oil fields in 2007.
Exxon Mobil (XOM) and ConocoPhillips (COP) are still engaged in
legal battles over lost projects.
Oil giant BP (BP) said three new non-executive directors,
including former German Chancellor Gerhard Schroeder, will be
appointed to the board of TNK-BP, its Russia joint venture. BP said
the shareholders of TNK-BP agreed to appoint the directors to avoid
the risk of deadlock on the board. The other two non-executive
directors will be James Leng, the chairman-designate of Rio Tinto
and Alexander Shokhin, president of the Russian Union of
Industrialists and Entrepreneurs.
Among small cap energy names, Hiland Partners, LP (HLND) and
Hiland Holdings GP, LP (HPGP) both received a proposal from Harold
Hamm to acquire all of the outstanding common units of each of the
Hiland companies not owned by Hamm, his affiliates or Hamm family
trusts.
Hiland Partners, LP unitholders would receive $9.50 in cash per
common unit and Hiland Holdings GP, LP unitholders would receive
$3.20 in cash per common unit.
Hiland Partners LP shares jumped 8% to $8.53. Hiland Holdings
GP, LP shares rose 14% to $3.
-Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com
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