Aug 2 Oil and gas producer Bill Barrett Corp said it would exit the year with all its rigs drilling for oil, after weak gas prices led to a surprise adjusted loss for the second quarter.
Bill Barrett said it is pulling back the two drilling rigs it has in the Piceance Basin in northwestern Colorado, an area rich in natural gas and natural gas liquids (NGLs), due to the weak prices.
Decade-low natural gas prices sent many exploration and production companies in search of NGLs such as butane, propane and ethane, which can be stripped out and sold for higher prices linked to those of oil.
But excess supplies have sent prices down, erasing a profit edge many companies had their eyes on. NGL prices fell about 15 percent during the second quarter.
"We will now exit 2012 with eight rigs all drilling for oil," Chief Operating Officer Scot Woodall said on a conference call with analysts.
Bill Barrett shares, which fell as much as 14 percent, recovered some of the losses to trade down 6 percent on Thursday afternoon on the New York Stock Exchange.
Denver, Colorado-based Bill Barrett, whose oil production rose 92 percent in the quarter, tightened its full-year production outlook to between 118 and 122 billion cubic feet equivalent (bcfe) from a range of 116 to 122 bcfe.
The company also raised the lower-end of its capital expenditure budget by $50 million. It now expects to spend $850 million to $900 million this year.
Bill Barrett, which is trying to lower the gap between its cash flow and capital expenditure, said it would have a capital expenditure run rate of about $550 million in the second half of the year and going into 2013.
Adjusted second-quarter loss was 5 cents per share. Analysts were expecting a profit of 5 cents per share, according to Thomson Reuters I/B/E/S.
Operating and other revenue fell 19 percent to $160.3 million.