Energy Sector Review: PetroQuest Production, Exxon Not Cutting Back

Petroquest Energy Inc (NYSE:PQ) recently initiated production from 10 additional operated Woodford wells. This group of wells had an average maximum 24 hour gross rate of 5,133 Mcf per day. Four of these wells encountered natural gas liquids in the gas stream resulting in approximately 1,200 BTU gas. These facilities are projected to be operational by Q2. The company expects to drill approximately 20 operated Woodford wells during 2012 targeting liquids rich gas. In northern Oklahoma, the company continues to acquire Mississippian Lime acreage. During 2012, the company plans to drill approximately 10-15 Mississippian Lime wells. In East Texas, the company recently completed two non-operated horizontal Cotton Valley wells. During 2011, the company drilled three operated horizontal Cotton Valley wells that averaged 5.7 Bcfe of estimated proved reserves per well. The company expects to drill six operated horizontal Cotton Valley wells during 2012. The company recently completed its first Bossier Shale well (NRI – 20%) in Panola County, Texas. The well is currently flowing at a restricted rate of approximately 6,000 Mcf per day on a 14/64th inch choke. Early flowback data indicates a 1050 BTU gas stream that is not expected to generate a substantial pricing uplift. In South Texas, the company completed two non-operated Eagle Ford Shale wells (NRI – 19 %) located in La Salle County. The wells achieved 24 hour maximum gross daily production rates of 725 Boe/d (70 % oil) and 505 Boe/d (69% oil), respectively. The company expects to drill two to three Eagle Ford Shale wells during 2012 in La Salle County. The company continues to construct surface facilities for its La Cantera #1 well (NRI 17%) and expects first production to commence in approximately 30-45 days.

The shares closed at $5.97, down $0.45, or 7.01%, on the day. Its market capitalization is $383.04 million.

Exxon Mobil Corporation (NYSE:XOM) said it has no intention of reducing natural gas production even as analysts predict prices for the fuel could remain at low levels through 2013.

The shares closed at $83.97, up $0.23, or 0.27%, on the day. Its market capitalization is $397.51 billion.

Chevron Corporation (NYSE:CVX): U.S. refiners and the United Steelworkers reached a tentative agreement on contracts just before a deadline last night, averting a strike that could have brought a significant amount of refining capacity offline, reports the Wall Street Journal.

The shares closed at $102.79, down $0.33, or 0.32%, on the day. Its market capitalization is $204.70 billion.

ConocoPhillips (NYSE:COP): The tentative deal on a new three-year contract covering Shell’s (RDS.A) U.S. refinery workers, that was reached with the United Steelworkers union Tuesday night, could be a model for other refiners like Exxon Mobil (NYSE:XOM), Marathon (NYSE:MRO), Valero (NYSE:VLO) and ConocoPhillips (NYSE:COP), reported Associated Press.

The shares closed at $69.32, up $1.11, or 1.63%, on the day. Its market capitalization is $89.56 billion.

BP plc (NYSE:BP): Canadian Oil Recovery and Remediation Enterprises announced that SAR AS a leading Norwegian oil waste management operating company that has previously entered into a strategic MENA operating partnership with CORRE, has signed a contract to clean and treat drill cuttings for BP Plc. in Jordan. SCM’s contract with BP is currently for two years with an optional one year extension if elected by BP. Including charges for asset mobilization and demobilization, over two years the contract has a value of approximately $7M increasing to approximately $10M if a third year is elected

The shares closed at $45.55, down $0.36, or 0.78%, on the day. Its market capitalization is $143.94 billion.

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To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com