Tickers in this Article: APC, GOOG, RIG, SLB, HAL, BJS
Energy earnings season has had some surprises mixed in with the usual plethora of earnings releases, some of which might prove to have an impact on the sector later on. These include a new offshore producing basin, a surprise entrant into the energy business, a large stock buyback and dividend, and a high profile congressional hearing looking into the environmental dangers of hydraulic fracturing.

IN PICTURES:
Learn To Invest In 10 Steps

New Offshore Producing Basin
Anadarko Petroleum Corporation (NYSE:APC) opened up a new basin with a discovery in the deepwater area offshore Mozambique. The company hit net pay of 480 feet of natural gas, and will move on to drill another exploratory well at a prospect 50 miles from this one. Anadarko Petroleum has 6.4 million acres under net lease here and believes that the area has geological features similar to those found in the Gulf of Mexico.

Anadarko Petroleum has concessions in both the onshore and offshore area in Mozambique, and has identified this as a potential future core area for the company.

Google Nation
Google Inc.
(Nasdaq:GOOG) has entered the energy business. The company received approval from the Federal Energy Regulatory Commission (FERC) to purchase electricity at wholesale rates. This is not an uncommon strategy for companies that consume large amounts of power, as it permits them to cut costs. Something tells me that Google has more planned here than just saving money.

Congressional Hearings Announced
Another little noticed bit of news this past week was the announcement by the Energy and Commerce Committee of the U.S House of Representatives that it would hold hearings on hydraulic fracturing, the process that is used to stimulate oil and gas wells, particularly in the shale plays that are taking a larger share of drilling in North America.

Henry Waxman, a Democrat from California, heads this committee, and it would be foolish for the industry to underestimate this growing threat of more regulation of hydraulic fracturing. Companies that received letters asking for information were Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL) and BJ Services (NYSE:BJS).

Big Buyback
Transocean (NYSE:RIG) authorized a huge buyback of shares and a large cash dividend. The stock buyback will total $3.2 billion, or more than 10% of the company's market capitalization. The dividend will be $1 billion or approximately $3.11 per share, and will be paid in four quarterly installments beginning in July 2010.

The Bottom Line
There's never a dull moment in the energy sector and earnings and news for the fourth quarter of 2009 proved that. (For more, see our Oil And Gas Industry Primer.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

comments powered by Disqus

Trading Center