* Ensco, Rowan results please market; outlook less assured
* Seadrill hit by writedowns, sees strength ahead
* Continental, Linn, W&T miss estimates, scale back plans
* U.S. oil price up, poll finds little room to rise in '09
* Ensco shares up 9 pct, Rowan up 12.5 pct
(Recasts first sentence, adds Ensco, Rowan results, analyst
comment, updates shares)
SAN FRANCISCO, Feb 26 (Reuters) - Two U.S. rig contractors
posted good results on Thursday, sending their shares surging
even though their outlooks and the scaled-back plans of energy
producers gave investors little to cheer about for 2009.
Both Ensco International Inc (ESV.N) and Rowan Companies Inc
(RDC.N) topped Wall Street's fourth-quarter expectations, and
their shares rose strongly, helped along by a 5 percent rise in
U.S. crude oil prices. CLc1
Ensco expected strong demand for its deepwater rigs that
start coming on line next quarter, but said jackup rig demand in
the Gulf of Mexico was still falling, and day rates softening,
blaming lower natural gas prices and "budget cutbacks by many of
the independents." [ID:nWEN5207]
Also on Thursday, independent energy producers Continental
Resources (CLR.N), W&T Offshore Inc (WTI.N) and Linn Energy
(LINE.O) posted results below estimates, hit by low oil and gas
prices and production issues, and scaled back their production
plans.
Norwegian oil rig company Seadrill Ltd (SDRL.OL) reported a
loss on hefty writedowns, but said it expects strong earnings in
the coming quarters. [ID:nLQ298002]
The relative health of the rig operators reflects a growing
conflict between the energy producers and the companies serving
them over whether oilfield service prices should come down.
"Our customers are being quite vocal about wanting to reset
their costs of operations in this low commodity cost
environment," Rowan's new chief executive, Matt Ralls, told
analysts on a conference call, adding that he was ready to
discuss day rate cuts in exchange for longer contracts.
Rowan reported a quarterly net profit, excluding items, of
$1.28 per share, against an average Reuters Estimates number of
$1.10. Ensco made $2.14 a share, versus an average estimate of
$2.05, a beat analysts said was due to a lower tax rate.
Ensco shares rose 8.7 percent to $26.52, while Rowan jumped
12.5 percent to $12.56. They were helped as crude oil prices
rose to nearly $45 a barrel, though a Reuters poll found U.S.
oil prices are likely to average at just $51.52 over 2009.
[ID:nLP810461]
'STRONG HEADWINDS'
Continental reported break-even earnings for the quarter,
below the average estimate of 18 cents a share. [ID:nWNAB7246]
W&T, after excluding an impairment charge and a derivative
gain, made a quarterly loss of $1.11 a share, wider than the
average estimate of a 42 cent per-share loss. [ID:nWNAB7247]
But shares of Continental rose 14 percent to $17.87, while
W&T Offshore dropped 7.5 percent to $9.51.
Analyst Curtis Trimble at Natixis Bleichroeder put that down
to the fact that Continental did not take a write-down, while
W&T did. "Operationally, Continental posted a very good quarter
despite the strong headwinds created by falling commodity
prices," he wrote in a research report.
Linn posted an adjusted fourth-quarter loss from continuing
operations of $435,000, or break-even per share, below the
average analyst estimate of earnings of 32 cents a share, as it
was hit by a wildfire in its Brea Olinda Field in California and
weak production in the Mid-Continent. [ID:nWNAB7292]
However, the company said production is 100 percent hedged
for 2009, 2010 and 2011, and its shares rose 10.7 percent.
Continental and Linn halved their 2009 capital expenditure
budgets, joining a long list of exploration and production
companies to do so as the sector has been hit hard by the
drastic fall in oil and gas prices and the credit crunch.
(Reporting by Braden Reddall in San Francisco and Hezron Selvi
in Bangalore; Editing by Jarshad Kakkrakandy and Matthew Lewis)
