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
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