Energy Sector Review: Halliburton, Petrobras, and Chesapeake

Range Resources Corp. (NYSE:RRC): For 2011, Range added 1,493 Bcfe of proved reserves through the drill bit. Positive performance revisions added 225 Bcfe despite the Company removing 112 Bcfe of proved undeveloped reserves that are no longer expected to be developed within the next five years under current development plans as the Company continues to redirect capital to the Marcellus Shale and other liquids-rich areas of the Company’s portfolio. Price revisions decreased proved reserves by just 0.4 Bcfe as lower gas prices were mostly offset by higher liquids prices. No reserves were added through purchases as the Company did not complete any proved property acquisitions in 2011. The sale of the Barnett Shale properties and other miscellaneous properties resulted in a reduction of 904 Bcfe of proved reserves. Production for 2011 totaled 202 Bcfe.

The shares closed at $59.00, up $4.98, or 9.22%, on the day. Its market capitalization is $9.51 billion.

EXCO Resources Inc (NYSE:XCO): In it’s Annual Energy Outlook 2012 report, the Energy Information Administration projects the United States as a net exporter of liquefied natural gas in 2016, a net pipeline exporter in 2025, and an overall net exporter of natural gas in 2021. Also in the report, the EIA cut its estimated unproved technically recoverable resource of shale gas for the United States to 482T cubic feet, “substantially below” its previous estimate of 827T cubic feet from a year ago, based mainly on a decrease in the estimate for the Marcellus shale, from 410T cubic feet to 141T cubic feet.

The shares closed at $8.55, up $0.69, or 8.78%, on the day. Its market capitalization is $1.84 billion.

Halliburton Company (NYSE:HAL): In it’s Annual Energy Outlook 2012 report, the Energy Information Administration projects the United States as a net exporter of liquefied natural gas in 2016, a net pipeline exporter in 2025, and an overall net exporter of natural gas in 2021. Also in the report, the EIA cut its estimated unproved technically recoverable resource of shale gas for the United States to 482T cubic feet, “substantially below” its previous estimate of 827T cubic feet from a year ago, based mainly on a decrease in the estimate for the Marcellus shale, from 410T cubic feet to 141T cubic feet.

The shares closed at $35.44, down $0.76, or 2.1%, on the day. Its market capitalization is $32.61 billion.

Petroleo Brasileiro SA (NYSE:PBR), the Brazilian state-controlled oil company, replaced CEO Jose Sergio Gabrielli with Maria das Graas Foster, a company executive with close ties to Brazilian President Dilma Rousseff, according to GloboNews cable TV channel, reports Reuters.

The shares closed at $31.10, up $1.28, or 4.29%, on the day. Its market capitalization is $202.84 billion.

Chesapeake Energy Corp. (NYSE:CHK) plans to further reduce its operated dry gas drilling activity by 50% to approximately 24 rigs by the 2012 second quarter from 47 dry gas rigs currently in use and by 67% from an average of approximately 75 dry gas rigs used during 2011. Chesapeake’s operated dry gas drilling capital expenditures in 2012, net of drilling carries, are expected to decrease to $0.9B, a decrease of approximately 70% from similar expenditures of $3.1B in 2011. Specifically, during the 2012 second quarter, Chesapeake plans to have reduced its drilling activity in both the Haynesville and Barnett shales to six operated rigs each and to 12 operated rigs in the dry gas area of the Marcellus Shale in northeastern Pennsylvania. Second, the company plans to immediately curtail approximately 0.5 billion cubic feet per day, or 8%, of its current operated gross gas production of 6.3 bcf per day, which is about 9% of the nation’s natural gas production. If conditions warrant, the company is prepared to double this production curtailment to as much as 1.0 bcf per day. In addition, wherever possible, Chesapeake plans to defer completions of dry gas wells that have been drilled but not yet completed, and also plans to defer pipeline connections of dry gas wells that have already been completed.

The shares closed at $22.28, up $1.32, or 6.3%, on the day. Its market capitalization is $14.69 billion.

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