US Energy-Sector Benchmarks Make Gains; BP, Marathon In Focus

By Steve Gelsi

U.S. energy stocks outpaced the broad market into the green Tuesday as investors looked past a sizable net loss reported by oil major BP and bought into beaten-down shares of some oil and natural-gas producers.

Shares of Cameron International (CAM) stood out among sector decliners, however.

The Amex Oil Index (XOI) rose 1.2% to 931, while the Amex Natural Gas Index (XNG) added 1.6% to 376. The Philadelphia Oil Service Index (OSXX) fell 1.3%.

In energy trading, crude-oil futures rose 22 cents to $40.30.

BP (BP) had a $3.3 billion fourth-quarter loss, a reversal from $4.4 billion earned in the year-earlier quarter, as it adjusted for the falling value of unsold inventory in the face of plunging oil and natural-gas prices. The oil major said it would keep paying its dividend at current levels. U.S.-listed shares of BP rose 60 cents to $42.17.

Also reporting results, Marathon Oil Corp. (MRO) said it lost $41 million, or 6 cents a share, in the fourth quarter, compared with $668 million, or 94 cents, earned in the final three months of 2007. The latest results include a non-cash $1.4 billion impairment of goodwill.

Separately, Marathon said it's cutting its 2009 capital spending budget by 24% to $5.7 billion. Marathon's shares fell 1.4% to $26.53. Also Tuesday, XTO Energy (XTO) said it would monetize some $1.3 billion in gains from commodity hedges to reduce its debt to about $10.25 billion in 2009.

The Fort Worth, Texas, natural-gas producer also reduced its 2009 capital-spending plan to $3.2 billion from its earlier target of $3.8 billion.

"Increasing production too rapidly ... is not a prudent use of our shareholders' resources," the company said.

XTO called the natural-gas markets "currently oversupplied." XTO's shares traded unchanged at $36.03.

Cameron International's shares fell 6% to $20.73 after the oil and gas service provider said fourth-quarter net income was $149.1 million, or 67 cents a share, up from $125.9 million, or 54 cents a share, earned in the year-ago period.

The latest results include a non-cash, after-tax charge of $16.5 million, or 8 cents a share, associated with the termination of its U.S. pension plans.

Analysts surveyed by FactSet Research had estimated, on average, profit of 75 cents a share. The estimates typically exclude one-time charges.

Anadarko Petroleum (APC) rose 5% to $37.70 after it said fourth-quarter net income rose to $824 million, or $1.79 a share, from $264 million, or 56 cents, a year ago.

One-time items, including gains on derivatives and divestitures, added $750 million, or $1.63 per share, to the bottom line after tax. Revenue rose to $3.81 billion from $3.06 billion.

Analysts polled by FactSet Research, whose estimates typically exclude one-time items, predicted earnings of 37 cents a share on $2.59 billion in revenue. Shares of the Houston-based oil and gas producer fell 1.8% to close at $36.09 ahead of the report. The stock is down 40% over the past 12 months

-Steve Gelsi; 415-439-6400; [e-mail]

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