Oil and gas cos output soars on favorable weather
(Reuters) - Oil and gas companies like Denbury Resources Inc (DNR.N) and Oasis Petroleum Inc (OAS.N) said a mild winter in the Dakotas helped them produce more liquids in the first quarter, as they continued to shift away from dry gas.
Oil producers and explorers are increasingly directing their spending towards liquids-rich fields including the Bakken in North Dakota and the Eagle Ford in Texas as low natural gas prices force companies to cut output.
"(We) are increasingly optimistic about our 2012 production outlook," Denbury Chief Executive Phil Rykhoek said.
The Texas-based company, which saw lower prices in the first quarter, said it continues to see production growth from the Bakken field.
Oasis Petroleum, whose production more than doubled in the first quarter, said weather in the Williston Basin was much milder than last year, leading to higher drilling.
Smaller rival Magnum Hunter's (MHR.N) output tripled during the period. The company, like its peers QEP Energy (QEP.N) and Goodrich Petroleum (GDP.N), is allocating a larger portion of its budget towards oil and liquids drilling.
Natural gas, which was trading around $11.00 per million British thermal units (mmBtu) in mid-2008, is now languishing at about $2.00, as production from shale fields flood the market.
Denbury's first-quarter production is estimated at 71,532 barrels of oil equivalent per day (boepd), up 12 percent from last year.
Oasis Petroleum completed and brought 26 gross wells to production during the quarter, up from eight wells last year.
Magnum Hunter's sequential proved reserves rose 13 percent during the quarter.
Denbury and Oasis Petroleum shares rose about 5 percent, while Magnum Hunter shares were up more than 3 percent on Monday on the New York Stock Exchange.
(Reporting by Vaishnavi Bala in Bangalore)