BG 1Q Profit Down on Lower Production

LONDON - BG Group PLC said Thursday its first-quarter net profit was down 0.8% on lower production and increased costs in exploration and production, but said it had delivered three key milestones on projects in Brazil and the U.K. 

The company, which last year surprised the market by downgrading its production targets, said it was on track to meet its project milestones for this year. 

The U.K.'s third-largest oil and natural gas company by market value said net profit for the three months ended March 31 totaled $1.21 billion, compared with $1.22 billion for the first quarter of 2012. 

"We have made a good start to the year, delivering the three key milestones for the first quarter, whilst also making progress with our project execution program for the year," said Chief Executive Chris Finlayson. 

Excluding gains or losses from one-off items, such as asset sales, the company's profit was $1.18 billion, down 3.4% from $1.23 billion in the same period a year earlier. This was 6.1% above average expectations of $1.12 billion in a Dow Jones Newswires poll of six analysts. 

Total oil and gas production was 659,000 barrels of oil equivalent a day, a 1.5% fall from the same period a year ago, but slightly above analysts' expectations of 648,000 barrels of oil equivalent a day. 

Revenue for the quarter was up 0.6% to $4.91 billion from $4.88 billion a year ago. 

Diluted earnings per share were 35.3 cents compared with 34.2 cents the previous year.

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Baker Hughes' Reports Lower Profits, Revenue for 1Q 2013

Oilfield services provider Baker Hughes Inc. reported lower profits and revenue for the first quarter amid higher activity levels in Canada and improved utilization in its pressure pumping business.

The company's net income fell to $267 million, or $.60 per share, from $379 million, or $.086 per share last year. Revenue for the first quarter of 2013 was $5.23 billion, down 2 percent compared to $5.33 billion for the fourth quarter of 2012 and down 2 percent compared to $5.36 billion for the first quarter of 2012.

"Our first quarter results reflect improvement in our North America segment," said Martin Craighead, Baker Hughes' president and chief executive officer, in a released statement. "The increased revenues and profit margins in North America are due to higher activity levels in Canada, along with improved utilization in our pressure pumping business despite a 3 percent decline in the U.S. onshore rig count since last quarter. Following five consecutive quarters of declines in the U.S. rig count, we are now forecasting a modest increase for the remainder of the year."

The company also reported that adjusted net income for the first quarter of this year excludes a foreign exchange loss of $23 million before and after-tax ($.05 per diluted share) on the devaluation of Venezuela's currency in February.

Baker Hughes' revenue decreased 9 percent in North America to $2.603 billion and slipped 4 percent in Europe/Africa/Russian Caspian to $854 million.

"We believe Baker Hughes' 1Q13 earnings release has positive implications for the stock," noted analyst James West in Barclays Earnings at a Glance analysis. "Results in North America improved sequentially with higher revenue and stronger operating margins and the company showed solid growth, especially for margins, in the Middle East/Asia Pacific region as well."

Baker Hughes' cash increased roughly 8 percent from last quarter to $1.1 billion and its capital expenditure for the quarter was $490 million, compared to $727 million in 4Q 2012, West reported. Additionally, Baker's debt increased from $176 million to more than $5 billion.

An area worth noting in the company's lineup is the Middle East/Asia Pacific region. Revenue for this segment, $894 million, improved 1 percent sequentially and was higher than Barclay's forecast of $864 million.

"Operating income of $116 million rose 45 percent from the previous quarter and far exceeded our $77 million estimate," West stated. "The margin at 13 percent expanded from 9 percent in the prior period and was well above our 8.9 percent forecast."

"Offset was impressive in the Middle East/Asia Pacific region, which suggests BHI is making progress in Iraq," Tudor Pickering Holt also noted in its daily Energy Thoughts analysis.   

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Baker Hughes' Reports Lower Profits, Revenue for 1Q 2013

Oilfield services provider Baker Hughes Inc. reported lower profits and revenue for the first quarter amid higher activity levels in Canada and improved utilization in its pressure pumping business.

The company's net income fell to $267 million, or $.60 per share, from $379 million, or $.086 per share last year. Revenue for the first quarter of 2013 was $5.23 billion, down 2 percent compared to $5.33 billion for the fourth quarter of 2012 and down 2 percent compared to $5.36 billion for the first quarter of 2012.

"Our first quarter results reflect improvement in our North America segment," said Martin Craighead, Baker Hughes' president and chief executive officer, in a released statement. "The increased revenues and profit margins in North America are due to higher activity levels in Canada, along with improved utilization in our pressure pumping business despite a 3 percent decline in the U.S. onshore rig count since last quarter. Following five consecutive quarters of declines in the U.S. rig count, we are now forecasting a modest increase for the remainder of the year."

The company also reported that adjusted net income for the first quarter of this year excludes a foreign exchange loss of $23 million before and after-tax ($.05 per diluted share) on the devaluation of Venezuela's currency in February.

Baker Hughes' revenue decreased 9 percent in North America to $2.603 billion and slipped 4 percent in Europe/Africa/Russian Caspian to $854 million.

"We believe Baker Hughes' 1Q13 earnings release has positive implications for the stock," noted analyst James West in Barclays Earnings at a Glance analysis. "Results in North America improved sequentially with higher revenue and stronger operating margins and the company showed solid growth, especially for margins, in the Middle East/Asia Pacific region as well."

Baker Hughes' cash increased roughly 8 percent from last quarter to $1.1 billion and its capital expenditure for the quarter was $490 million, compared to $727 million in 4Q 2012, West reported. Additionally, Baker's debt increased from $176 million to more than $5 billion.

An area worth noting in the company's lineup is the Middle East/Asia Pacific region. Revenue for this segment, $894 million, improved 1 percent sequentially and was higher than Barclay's forecast of $864 million.

"Operating income of $116 million rose 45 percent from the previous quarter and far exceeded our $77 million estimate," West stated. "The margin at 13 percent expanded from 9 percent in the prior period and was well above our 8.9 percent forecast."

"Offset was impressive in the Middle East/Asia Pacific region, which suggests BHI is making progress in Iraq," Tudor Pickering Holt also noted in its daily Energy Thoughts analysis.   

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Baker Hughes' Reports Lower Profits, Revenue for 1Q 2013

Oilfield services provider Baker Hughes Inc. reported lower profits and revenue for the first quarter amid higher activity levels in Canada and improved utilization in its pressure pumping business.

The company's net income fell to $267 million, or $.60 per share, from $379 million, or $.086 per share last year. Revenue for the first quarter of 2013 was $5.23 billion, down 2 percent compared to $5.33 billion for the fourth quarter of 2012 and down 2 percent compared to $5.36 billion for the first quarter of 2012.

"Our first quarter results reflect improvement in our North America segment," said Martin Craighead, Baker Hughes' president and chief executive officer, in a released statement. "The increased revenues and profit margins in North America are due to higher activity levels in Canada, along with improved utilization in our pressure pumping business despite a 3 percent decline in the U.S. onshore rig count since last quarter. Following five consecutive quarters of declines in the U.S. rig count, we are now forecasting a modest increase for the remainder of the year."

The company also reported that adjusted net income for the first quarter of this year excludes a foreign exchange loss of $23 million before and after-tax ($.05 per diluted share) on the devaluation of Venezuela's currency in February.

Baker Hughes' revenue decreased 9 percent in North America to $2.603 billion and slipped 4 percent in Europe/Africa/Russian Caspian to $854 million.

"We believe Baker Hughes' 1Q13 earnings release has positive implications for the stock," noted analyst James West in Barclays Earnings at a Glance analysis. "Results in North America improved sequentially with higher revenue and stronger operating margins and the company showed solid growth, especially for margins, in the Middle East/Asia Pacific region as well."

Baker Hughes' cash increased roughly 8 percent from last quarter to $1.1 billion and its capital expenditure for the quarter was $490 million, compared to $727 million in 4Q 2012, West reported. Additionally, Baker's debt increased from $176 million to more than $5 billion.

An area worth noting in the company's lineup is the Middle East/Asia Pacific region. Revenue for this segment, $894 million, improved 1 percent sequentially and was higher than Barclay's forecast of $864 million.

"Operating income of $116 million rose 45 percent from the previous quarter and far exceeded our $77 million estimate," West stated. "The margin at 13 percent expanded from 9 percent in the prior period and was well above our 8.9 percent forecast."

"Offset was impressive in the Middle East/Asia Pacific region, which suggests BHI is making progress in Iraq," Tudor Pickering Holt also noted in its daily Energy Thoughts analysis.   

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Crude Oil Settles Lower on Weak Demand; Brent falls to 9-Month Low

Crude-oil futures prices fell sharply Friday, hit by growing worries over rising U.S. oil supplies and slowing growth in global oil demand.

ICE North Sea Brent crude-oil futures, a key global benchmark, dropped for a third straight day, settling at a nine-month low.

Traders said Brent is under pressure from continued worries about weakness in European economies and reduced demand caused by refinery maintenance in Europe and Asia, along with growing competition from rising U.S. oil output.

U.S. benchmark oil futures settled at five-week lows as crude oil inventories have risen to their highest level since July 1990, even as domestic refiners have lifted crude oil processing rates to the highest early April level in eight years. Those busy processers are increasing supplies of gasoline, erasing concerns about tight supplies ahead of the peak spring-summer driving season, which looks to be stuck in reverse this year due to weak demand.

Government forecasters, while warning of a slowdown in the growth of global oil consumption, expect demand for gasoline --the most widely used petroleum product in the world's biggest oil consumer--to slip to a 12-year low in the peak season. The EIA said U.S. vehicles' increased miles per gallon more than offsets the expected rise in miles traveled, the EIA said.

Spurred by the weak outlook and news that inventories in the key East Coast region now top five-year averages, traders slashed gasoline futures by 14 cents as gallon over the past three sessions, leaving prices at a three-month low on Friday.

"It's simply a supply-demand situation," said Dan Flynn, an analyst at Price Futures. "We've basically got more supply here than we know what to do with."

Light, sweet crude oil for May delivery on the New York Mercantile Exchange settled 2.4%, or $2.22 lower, at $91.29 a barrel, the lowest price since March 6.

ICE North Sea Brent for May delivery settled 1.1%, or $1.16 a barrel lower, at $103.11 a barrel, after an intraday low of $101.09 a barrel.

Forecasts this week from the U.S. Energy Information Administration, the Organization of the Petroleum Exporting Countries, and the International Energy Agency call for demand in the current quarter to drop by 180,000 to 400,000 barrels a day from the first-quarter level. That compares with a quarter-to-quarter rise at this time last year of 300,000 barrels a day, according the IEA, the energy watchdog of the major industrialized nations.

Tim Evans, analyst at Citi Futures, said prices have been hit hard by a "relatively consistent gloomy picture that is weighing on market sentiment."

Weak seasonal demand in the current quarter means, "there's simply no reason to anticipate a quick recovery," Mr. Evans said. "Demand and prices may rebound in the third quarter, but it will likely begin from a lower price level."

Analysts at Barclays said current oil-price weakness is "transient" and demand will pick up in coming months, as European refiners return from maintenance by late May and boost crude oil demand. Asian refiners are expected to wrap up seasonal work in June, providing a further lift for crude prices.

Lower global refiner demand for Brent comes as imported crudes are losing market share in the U.S. due to rising domestic output. PBF Energy Inc. said this week it plans to process up to 70,000 barrels a day of crude oil from North Dakota's Bakken shale oil region at its 190,000 barrels-a-day refnery in Delaware, a move which analyst said will lower crude imports, adding to pressure on Brent crude prices.

Gene McGillian, broker and analyst at Tradition Energy noted that U.S. crude prices have fallen by more than more than $7.50 a barrel since the April 1 high of $97.80, and said good part of the worries about the global economy may be factored into current prices.

"We may see a test of $90 a barrel, but I don't think the bears will get much more ferocious unless we get signs a further downturn," he said.

May reformulated gasoline blendstock futures settled 1%, or 2.92 cents, lower at $2.8018 a gallon, the lowest price since Jan. 18.

May heating oil futures fell 2.73 cents, to settle at $2.8719 a gallon, the lowest price since March 19.

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Crude 16 Cents Lower; Brent Climbs 1%

Global benchmark oil prices diverged sharply Monday, with North Sea Brent crude gaining on concerns over the shutdown of a U.S. pipeline in the key Gulf Coast refining region.

U.S. crude oil futures on the New York Mercantile Exchange settled 16 cents lower, at $97.07 a barrel, on profit taking after a 5.2% gain over the previous five sessions.

Traders, meantime, bid up the price of North Sea Brent crude oil futures on the belief that oil imports that compete with Brent will be strongly sought after by U.S. Gulf Coast refiners after the closure of Exxon Mobil's Pegasus Pipeline.

The 95,000 barrels a day pipeline that brings Canadian crude oil from Patoka, Ill. to Nederland, Texas was closed Friday after a leak on a section in Arkansas. The company hasn't given a likely date for restarting the line yet.

Analysts said the closure of the pipeline means that crude oil inventories will continue to build up at bottlenecks in the middle of the country, such as the Cushing, Okla. terminal that is the delivery point for the Nymex crude oil futures contract. Refiners have in recent week increased the volumes of oil that they move from Cushing, using shipments by rail and truck to augment stunted pipeline flows.

Expectations of a strong and steady draining of inventories at Cushing have brought strong pressure to bear on Brent prices in recent week and lifted the value of the Nymex benchmark contract. Greater moves of oil out of Cushing would make Gulf refiners less dependent on crude oil imports, which are priced against Brent, a global benchmark and would bolster U.S. crude oil prices. "Brent has dropped so much recently that we are seeing a turnaround in that now," said Gene McGillian, analyst and broker at Tradition Energy.

ICE North Sea Brent for May delivery was up $1.07, or 1%, at $111.09 a barrel late Monday. Brent posted a premium of $14.02 a barrel to the Nymex contract, the most since March 21. Brent ended March at $12.79 a barrel above the Nymex contract, down from a premium at the end of February of $19.33 a barrel.

Mr. McGillian said prices of U.S. oils were also undermined by indications of slower than expected growth in the manufacturing sectors in both the U.S. and China, the world's top two oil consumers.

Meantime, traders also are concerned about rising oil inventories in the U.S.

U.S. crude oil inventories rose 1.9 million barrels in the week ended March 29, according to early estimates from five analysts surveyed by Dow Jones Newswires. A rise of that size would put crude stocks at their highest level since July 1990 and at their highest end March level since 1931.

The closely watched government inventory data from the Energy Information Administration is due to be released at 10:30 a.m. EDT Wednesday. The American Petroleum Institute, a trade group, releases its data at 4:30 p.m. EDT on Tuesday.

Gasoline stocks are expected to drop by 300,000 barrels, while distillate stocks, comprising heating oil and diesel fuel, were expected to fall 400,000 barrels. Refiners, returning from maintenance work, are expected to boost capacity utilization by 0.4 percentage point to 86.1%.

Elsewhere, May heating oil settled up 2.17 cents, at $3.0687 a gallon, while May reformulated gasoline blendstock futures were 0.91 cent lower, at $3.1015 a gallon.

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Crude 16 Cents Lower; Brent Climbs 1%

Global benchmark oil prices diverged sharply Monday, with North Sea Brent crude gaining on concerns over the shutdown of a U.S. pipeline in the key Gulf Coast refining region.

U.S. crude oil futures on the New York Mercantile Exchange settled 16 cents lower, at $97.07 a barrel, on profit taking after a 5.2% gain over the previous five sessions.

Traders, meantime, bid up the price of North Sea Brent crude oil futures on the belief that oil imports that compete with Brent will be strongly sought after by U.S. Gulf Coast refiners after the closure of Exxon Mobil's Pegasus Pipeline.

The 95,000 barrels a day pipeline that brings Canadian crude oil from Patoka, Ill. to Nederland, Texas was closed Friday after a leak on a section in Arkansas. The company hasn't given a likely date for restarting the line yet.

Analysts said the closure of the pipeline means that crude oil inventories will continue to build up at bottlenecks in the middle of the country, such as the Cushing, Okla. terminal that is the delivery point for the Nymex crude oil futures contract. Refiners have in recent week increased the volumes of oil that they move from Cushing, using shipments by rail and truck to augment stunted pipeline flows.

Expectations of a strong and steady draining of inventories at Cushing have brought strong pressure to bear on Brent prices in recent week and lifted the value of the Nymex benchmark contract. Greater moves of oil out of Cushing would make Gulf refiners less dependent on crude oil imports, which are priced against Brent, a global benchmark and would bolster U.S. crude oil prices. "Brent has dropped so much recently that we are seeing a turnaround in that now," said Gene McGillian, analyst and broker at Tradition Energy.

ICE North Sea Brent for May delivery was up $1.07, or 1%, at $111.09 a barrel late Monday. Brent posted a premium of $14.02 a barrel to the Nymex contract, the most since March 21. Brent ended March at $12.79 a barrel above the Nymex contract, down from a premium at the end of February of $19.33 a barrel.

Mr. McGillian said prices of U.S. oils were also undermined by indications of slower than expected growth in the manufacturing sectors in both the U.S. and China, the world's top two oil consumers.

Meantime, traders also are concerned about rising oil inventories in the U.S.

U.S. crude oil inventories rose 1.9 million barrels in the week ended March 29, according to early estimates from five analysts surveyed by Dow Jones Newswires. A rise of that size would put crude stocks at their highest level since July 1990 and at their highest end March level since 1931.

The closely watched government inventory data from the Energy Information Administration is due to be released at 10:30 a.m. EDT Wednesday. The American Petroleum Institute, a trade group, releases its data at 4:30 p.m. EDT on Tuesday.

Gasoline stocks are expected to drop by 300,000 barrels, while distillate stocks, comprising heating oil and diesel fuel, were expected to fall 400,000 barrels. Refiners, returning from maintenance work, are expected to boost capacity utilization by 0.4 percentage point to 86.1%.

Elsewhere, May heating oil settled up 2.17 cents, at $3.0687 a gallon, while May reformulated gasoline blendstock futures were 0.91 cent lower, at $3.1015 a gallon.

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Crude Settles Lower on Cyprus Worries

Crude-oil futures prices settled weaker Thursday, knocked lower by concerns over the ongoing debt crisis in Cyprus and worries it could spread further into Europe.

Traders said high U.S. oil inventories and weak demand in the world's biggest oil consumer also kept prices down.

The European Central Bank has warned it won't extend beyond Monday the emergency funding that has kept Cypriot banks in operation while a bailout plan was being negotiated. The Cypriot Parliament rejected an earlier package that included a tax levy on bank accounts in the island nation, fueling fears of a run on banks, which have been ordered to close this week.

Worries about Cyprus sparked fears debt problems could flare anew elsewhere in Europe and have weighed on the euro, sending the common currency down against the dollar. In times of dollar strength, some investors using foreign currencies avoid dollar-based investments such as oil futures as they become pricier due to currency issues.

"Cyprus is completely unresolved" and people are becoming "a little more cautious" about buying crude-oil futures, said Peter Donovan, vice president at Vantage Trading.

Mark Waggoner, president of Excel Futures, said the oil market was overbought and in need of a correction. But he expects prices will recover once the market is no longer "spooked" over Cyprus. That front-month Nymex crude held above its 20-day average on trading charts of $92.29 a barrel signaled potential for recovery, he said.

Light, sweet crude oil for May delivery on the New York Mercantile Exchange settled 1.1%, or $1.05 lower, at $92.45 a barrel. May ICE North Sea Brent crude oil fell $1.25 to $107.47 a barrel.

For the second time this week, Brent's premium to the U.S. benchmark narrowed to the lowest level since last July. The spread was $15.02 a barrel Thursday.

Brent crude supplies have been rising after output snags have been resolved, and are facing increased competition from higher flows of similar grades of oil from West Africa. Shell said Thursday it was restoring shipments of Bonny Light crude after a pipeline was shut earlier this month after being damaged in an attempted oil theft.

At the same, more U.S. outlook is making its way to the U.S. Gulf refining region by pipeline and rail, where it competes directly with imports, putting further pressure on Brent and similar crudes.

The Energy Information Administration reported Wednesday U.S. crude-oil stocks fell by 1.3 million barrels last week, while analysts expected a 1.7-million barrel rise. The surprise decline followed nine straight weeks of increases that plumped up inventories by 24 million barrels.

But even with the decline, crude stocks, at near 383 million barrels, are unusually high and 12% above the five-year average for this time of year, the biggest surplus in two months. At the same time, the EIA said U.S. oil demand dropped last week to its lowest level since January.

April-delivery reformulated blendstock gasoline futures settled 4.57 cents lower, at $3.0706 a gallon, while April heating oil rose 0.42 cent, to settle at $2.8963 a gallon.

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Crude Settles Lower on Cyprus Worries

Crude-oil futures prices settled weaker Thursday, knocked lower by concerns over the ongoing debt crisis in Cyprus and worries it could spread further into Europe.

Traders said high U.S. oil inventories and weak demand in the world's biggest oil consumer also kept prices down.

The European Central Bank has warned it won't extend beyond Monday the emergency funding that has kept Cypriot banks in operation while a bailout plan was being negotiated. The Cypriot Parliament rejected an earlier package that included a tax levy on bank accounts in the island nation, fueling fears of a run on banks, which have been ordered to close this week.

Worries about Cyprus sparked fears debt problems could flare anew elsewhere in Europe and have weighed on the euro, sending the common currency down against the dollar. In times of dollar strength, some investors using foreign currencies avoid dollar-based investments such as oil futures as they become pricier due to currency issues.

"Cyprus is completely unresolved" and people are becoming "a little more cautious" about buying crude-oil futures, said Peter Donovan, vice president at Vantage Trading.

Mark Waggoner, president of Excel Futures, said the oil market was overbought and in need of a correction. But he expects prices will recover once the market is no longer "spooked" over Cyprus. That front-month Nymex crude held above its 20-day average on trading charts of $92.29 a barrel signaled potential for recovery, he said.

Light, sweet crude oil for May delivery on the New York Mercantile Exchange settled 1.1%, or $1.05 lower, at $92.45 a barrel. May ICE North Sea Brent crude oil fell $1.25 to $107.47 a barrel.

For the second time this week, Brent's premium to the U.S. benchmark narrowed to the lowest level since last July. The spread was $15.02 a barrel Thursday.

Brent crude supplies have been rising after output snags have been resolved, and are facing increased competition from higher flows of similar grades of oil from West Africa. Shell said Thursday it was restoring shipments of Bonny Light crude after a pipeline was shut earlier this month after being damaged in an attempted oil theft.

At the same, more U.S. outlook is making its way to the U.S. Gulf refining region by pipeline and rail, where it competes directly with imports, putting further pressure on Brent and similar crudes.

The Energy Information Administration reported Wednesday U.S. crude-oil stocks fell by 1.3 million barrels last week, while analysts expected a 1.7-million barrel rise. The surprise decline followed nine straight weeks of increases that plumped up inventories by 24 million barrels.

But even with the decline, crude stocks, at near 383 million barrels, are unusually high and 12% above the five-year average for this time of year, the biggest surplus in two months. At the same time, the EIA said U.S. oil demand dropped last week to its lowest level since January.

April-delivery reformulated blendstock gasoline futures settled 4.57 cents lower, at $3.0706 a gallon, while April heating oil rose 0.42 cent, to settle at $2.8963 a gallon.

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Norway Reports Lower Hydrocarbon Production for February

Oil and gas production on the Norwegian Continental Shelf declined in February, according to the latest figures from the Norwegian Petroleum Directorate.

Production of oil, natural gas liquids and condensate was down some 88,000 barrels per day at 1.79 million barrels per day during February, while total gas sales for the month fell by 60 billion cubic feet to 310 billion cubic feet.

The NPD explained that the Oseberg, Skarv, Troll and Valhall field had reduced production during February due to a range of technical problems. The Grane field had reduced production during the month because of maintenance work.

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Norway Reports Lower Hydrocarbon Production for February

Oil and gas production on the Norwegian Continental Shelf declined in February, according to the latest figures from the Norwegian Petroleum Directorate.

Production of oil, natural gas liquids and condensate was down some 88,000 barrels per day at 1.79 million barrels per day during February, while total gas sales for the month fell by 60 billion cubic feet to 310 billion cubic feet.

The NPD explained that the Oseberg, Skarv, Troll and Valhall field had reduced production during February due to a range of technical problems. The Grane field had reduced production during the month because of maintenance work.

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Norway Reports Lower Hydrocarbon Production for February

Oil and gas production on the Norwegian Continental Shelf declined in February, according to the latest figures from the Norwegian Petroleum Directorate.

Production of oil, natural gas liquids and condensate was down some 88,000 barrels per day at 1.79 million barrels per day during February, while total gas sales for the month fell by 60 billion cubic feet to 310 billion cubic feet.

The NPD explained that the Oseberg, Skarv, Troll and Valhall field had reduced production during February due to a range of technical problems. The Grane field had reduced production during the month because of maintenance work.

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Crude-Oil Futures Settle Lower After Rise in Inventories

Crude-oil futures settled slightly lower Wednesday after a larger-than-expected rise in U.S. inventories stirred concerns about demand.

The federal Energy Information Administration said crude-oil stocks climbed 3.8 million barrels to 381.4 million barrels in the week ended March 1, well above the 500,000-barrel increase analysts expected. The stocks are at the highest level for this time of year in 82 years, as domestic production increased and demand from refiners eased during a period of seasonal maintenance.

"It's the same general theme we've been seeing: crude is plentiful, products are a little tight," said Kyle Cooper, managing partner at IAF Advisors.

The EIA data showed domestic crude production neared 7.1 million barrels a day, or 1.3 million barrels above the same week in 2012.

Refiners cut crude-oil processing by nearly 500,000 barrels a day to the lowest levels in almost two years. At current reduced processing rates of just above 14 million barrels a day, stocks are sufficient to meet nearly four weeks of refiner demand, the highest level in almost 20 years.

Mr. Cooper said seasonal refinery maintenance appears to be running longer than had been expected, and some companies are suffering unplanned outages at units, reducing supply of refined products like gasoline.

Light, sweet crude-oil futures for April delivery on the New York Mercantile Exchange settled 39 cents, or 0.4%, lower at $90.43 a barrel. The contract hit a low of $89.55 a barrel after the EIA data but recovered some losses after failing to break below the 2012 intraday low of $89.33 the front-month contract touched Monday.

Gene McGillian, broker and analyst at Tradition Energy, said he expects prices to consolidate around $90 for the near term, as traders look for clues on the pace of economic recovery and oil demand. U.S. oil use dropped 2.1% to a one-month low last week, EIA data showed.

"We've wiped out $8 from the price and if we continue to see slowing in economies in the U.S. and Europe, prices could go down to the mid-$80s," a level last seen in mid-November, he said.

ICE North Sea Brent for April delivery settled 55 cents, or 0.5%, lower at $111.06 a barrel.

The EIA said U.S. crude-oil imports last week fell by 650,000 barrels a day to 7.3 million barrels a day. Higher domestic flows from shale-oil fields are expected to continue the trend of reducing the need for crude-oil imports.

Gasoline output fell 600,000 barrels a day last week, to a seven-week low, cutting nationwide inventories in the week.

But stocks in Northeast U.S., including the New York Harbor delivery point for the benchmark gasoline futures contract, climbed for an 11th-straight week, as regional supplies continued to recover from effect of Hurricane Sandy. Stocks are 2.6% above year-earlier levels in the region, reversing a mid-December year-on-year fall of 2.5%.

April-delivery reformulated gasoline blendstock futures settled 2.35 cents, or 0.7%, lower at $3.1247 a gallon.

The EIA reported inventories of distillate fuel (diesel/heating oil) fell by a steep 3.83 million barrels, more than five times larger than expectations of a decline of 700,000 barrels. April heating oil gained 0.26 cent, or 0.1%, to settle at a one-week high of $2.9756 a gallon.

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Crude Prices Fall on Lower Expectations for Global Oil Demand

Crude-oil futures edged lower Wednesday after a closely watched industry forecast cut estimates for global crude demand in 2013.

The Paris-based energy watchdog International Energy Administration projected that 2013 global oil consumption would grow by 840,000 barrels a day, or 90,000 barrels a day less than the group's estimate last month. The group pegs global consumption at 90.7 million barrels a day.

The IEA said predictions of higher oil use may be overly optimistic, particularly for China, the world's second-largest oil consumer. The report questioned whether a steep increase in Chinese imports in recent months would translate into higher long-term demand. Chinese crude imports jumped 6.1% in December and 7.4% in January, versus the previous year.

"The Chinese data has been better than expected, but people seem to be getting a little ahead of themselves with the optimism about Chinese demand," said Tariq Zahir, managing member of New York-based commodity fund Tyche Capital Management.

Light, sweet crude for March delivery settled 50 cents, or 0.5%, lower at $97.01 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled 6 cents higher at $118.72 a barrel.

The IEA forecasts added uncertainty to the crude market, traders and analysts said. The projections came a day after the Organization of the Petroleum Exporting Countries and the U.S. Energy Information Administration both raised their expectations for 2013 global demand.

"The IEA report was bearish, while the OPEC and EIA reports were both bullish, so what really matters now is Chinese economic data in the next few months," said Dominick Chirichella, an oil analyst at the Energy Management Institute in New York.

Separately, a weekly report from the EIA on Wednesday showed U.S. crude-oil inventories rose by 600,000 barrels last week, below the 2.3 million-barrel increase forecast by analysts surveyed by Dow Jones Newswires.

A smaller-than-expected increase in inventories points to stronger demand, but crude-oil prices fell after the report. Analysts said some in the market had been lulled into thinking the stockpiles would sharply decline after a survey by the American Petroleum Institute late Tuesday. That survey saw crude inventories plunging 2.3 million barrels.

"Given that we saw this huge drawdown from the API figures last night, people had been expecting something more like that," said Matt Smith, energy analyst at Summit Energy.

Also, the EIA report showed a 1.2 million-barrel drop in crude stockpiles at the oil hub of Cushing, Okla., indicating that a glut of oil in the Midwest may be easing.

The glut has put pressure on U.S. oil prices for the last two years as production from shale oil discoveries in the U.S. and Canada has flooded into the Midwest, which lacked adequate infrastructure to transport it elsewhere. That situation was exacerbated last month by problems with the Seaway pipeline, which carries crude from Cushing to key refiners in the U.S. Gulf of Mexico region.

"The bottleneck in the Seaway pipeline may not be as much of a problem as it was a couple weeks ago," Mr. Chirichella said.

Front-month March reformulated gasoline blendstock, or RBOB, settled 1.49 cents, or 0.5%, lower at $3.0354 a gallon. March heating oil settled 1.74 cents, or 0.5%, lower at $3.2188 a gallon.

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Marathon Oil 4Q Net Falls 41% on Lower Exploration, Production Income

Marathon Oil Corp.'s fourth-quarter earnings fell 41%, partly due to write-downs and other charges, and the company fell short of analysts' expectations as high taxes and exploration costs offset increased oil and gas sales.

Marathon Oil spun off its downstream and petroleum assets in 2011, creating Marathon Petroleum Corp., in order to focus its drilling efforts on oil-rich unconventional fields in the U.S. The company's profits from oil and gas operations have risen in recent quarters as its production has exceeded expectations.

In the fourth quarter, the company reported a profit of $322 million, or 45 cents a share, down from $549 million, or 78 cents, a year earlier. Taking out items such as impairment, pension settlement and unrealized gains on crude-oil derivative instruments, earnings from continuing operations fell to 55 cents from 78 cents. Revenue jumped 11% to $4.24 billion. Marathon's fourth-quarter results came in 12 cents under the 67 cents per-share forecast of analysts polled by Thomson Reuters, who had anticipated revenue of $3.93 billion.

The company reported that its exploration-and production segment's income fell 10% to $501 million from the year-before period, as higher costs offset increased production volumes. Since last year, Marathon has seen a more-than-four-fold increase in average net production in the south Texas Eagle Ford formation, from about 15,000 barrels of oil equivalent per day in December 2011 to more than 65,000 BOE/D in December 2012. Output in the oil-rich Bakken formation increased by 45% in the same period. However, higher costs have accompanied the production ramp-up in those areas, the company said.

The fourth quarter also included an $85 million in expenses associated with the Innsbruck well in the Gulf of Mexico, a dry hole, and the company reported another well in Iraq's Kurdistan is being plugged and abandoned.

Raymond James analyst Stacey Hudson said Marathon's production came in ahead of expectations and prices held up well. In a note, Raymond James analysts wrote that the rate at which Marathon's reserves are being replaced through organic growth is "solid." But taxes were also higher than Ms. Hudson anticipated.

"It's taxes eating up the upside," she said. Late last year, Marathon resumed production in Libya, where the company has reported a statutory tax rate of 93%.

Marathon said in December it would bump up this year's capital, investment and exploration budget to $5.2 billion from $5 billion in 2012 and spend most of it in oil-bearing shale formations such as the Bakken in North Dakota, the Anadarko Woodford in Oklahoma and the Eagle Ford in South Texas. The company expects the effort to give it a 6% to 8% production boost this year.

Oil and mining income dropped 70% to $19 million while integrated-gas income climbed 75% to $35 million.

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Marathon Oil 4Q Net Falls 41% on Lower Exploration, Production Income

Marathon Oil Corp.'s fourth-quarter earnings fell 41%, partly due to write-downs and other charges, and the company fell short of analysts' expectations as high taxes and exploration costs offset increased oil and gas sales.

Marathon Oil spun off its downstream and petroleum assets in 2011, creating Marathon Petroleum Corp., in order to focus its drilling efforts on oil-rich unconventional fields in the U.S. The company's profits from oil and gas operations have risen in recent quarters as its production has exceeded expectations.

In the fourth quarter, the company reported a profit of $322 million, or 45 cents a share, down from $549 million, or 78 cents, a year earlier. Taking out items such as impairment, pension settlement and unrealized gains on crude-oil derivative instruments, earnings from continuing operations fell to 55 cents from 78 cents. Revenue jumped 11% to $4.24 billion. Marathon's fourth-quarter results came in 12 cents under the 67 cents per-share forecast of analysts polled by Thomson Reuters, who had anticipated revenue of $3.93 billion.

The company reported that its exploration-and production segment's income fell 10% to $501 million from the year-before period, as higher costs offset increased production volumes. Since last year, Marathon has seen a more-than-four-fold increase in average net production in the south Texas Eagle Ford formation, from about 15,000 barrels of oil equivalent per day in December 2011 to more than 65,000 BOE/D in December 2012. Output in the oil-rich Bakken formation increased by 45% in the same period. However, higher costs have accompanied the production ramp-up in those areas, the company said.

The fourth quarter also included an $85 million in expenses associated with the Innsbruck well in the Gulf of Mexico, a dry hole, and the company reported another well in Iraq's Kurdistan is being plugged and abandoned.

Raymond James analyst Stacey Hudson said Marathon's production came in ahead of expectations and prices held up well. In a note, Raymond James analysts wrote that the rate at which Marathon's reserves are being replaced through organic growth is "solid." But taxes were also higher than Ms. Hudson anticipated.

"It's taxes eating up the upside," she said. Late last year, Marathon resumed production in Libya, where the company has reported a statutory tax rate of 93%.

Marathon said in December it would bump up this year's capital, investment and exploration budget to $5.2 billion from $5 billion in 2012 and spend most of it in oil-bearing shale formations such as the Bakken in North Dakota, the Anadarko Woodford in Oklahoma and the Eagle Ford in South Texas. The company expects the effort to give it a 6% to 8% production boost this year.

Oil and mining income dropped 70% to $19 million while integrated-gas income climbed 75% to $35 million.

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Diamond Offshore 4Q Net Falls 17% Amid Lower Day Rates

Diamond Offshore Drilling Inc.'s fourth-quarter earnings fell 17% as lower day rates dampened improved utilization of ultradeep-water and midwater floaters.

Results topped consensus estimates and the contract driller's board once again declared a special cash dividend of 75 cents a share. The board also reiterated its policy of considering the payment of special cash dividends on a quarterly basis.

Diamond Offshore, which is majority owned by Loews Corp. (L), had seen declining revenue over the past year as the offshore-drilling sector struggles with a recovery from 2010's Deepwater Horizon rig explosion in the Gulf of Mexico. U.S. authorities in February 2011 resumed the approval of deep-water drilling programs, which now face heightened scrutiny.

Diamond Offshore reported a profit of $155.7 million, or $1.12 a share, down from $188.5 million, or $1.36 a share, a year earlier. Revenue climbed 0.3% to $750.5 million.

Analysts polled by Thomson Reuters had most recently forecast earnings of $1.10 a share on revenue of $740 million.

Operating margin shrank to 26% from 29.2%.

Day rates for ultradeep-water floaters fell 2.2%, while utilization increased to 89% from 70% a year earlier.

For deep-water floaters, day rates dropped 12% while utilization fell to 85% from 97%.

Meanwhile, midwater floaters saw a 1.1% decline in day rates, with utilization improving to 70% from 60%.

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Rockhopper reports lower losses

3.7 million) in the first half of the year, compared with $20 million a year before as it reduced its exploration expenses, with extensive drilling and seismic campaigns coming to an end.

Exploration and evaluation expenses fell by $25 million, mainly due to a $15 million decrease in an impairment charge and a $10 million reduction in seismic acquisition costs.

The completion of the farm-out of the Sea Lion prospect to Premier Oil (PMO) in October crystallised $14 million of transaction costs and a capital gains tax liability with the Falkland Islands government, the company said.

The exact size of the liability is yet to be agreed but will be payable at 26% of the taxable gain in two installments, with the first trenche due in 2013.

The Sea Lion field is now fully financed. This means that Rockhopper has approximately 142 million barrels of financed oil that, from late 2017, should begin generating cash flow with an estimated value to Rockhopper in excess of $2 billion at a 10% discount factor.

The firm said in a statement: "Having approximately 142 million financed barrels of oil and $270 million of free cash puts Rockhopper into a very strong position.

"The current priority is working with the Falkland Islands government to input into their ongoing 'Oil Readiness Review', particularly in the area of tax where we have already had confirmation that following the review, our tax position in respect of the farm-out will be no worse and may be improved."

Analyst view

Analysts at Panmure Gordon commented: "

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