WRAPUP 3-Independent E&P cos post Q1 loss on lower prices

* Cimarex, W&T, Denbury and PetroQuest swing to Q1 loss

* Cimarex, W&T Offshore forecast lower Q2 production

* Cimarex, W&T back 2009 production view

* PetroQuest cuts lower end of '09 capex forecast range

* PetroQuest shares fall 23 pct, W&T, Denbury down 9 pct (Adds details, analysts' comments, updates share movement)

By Shradhha Sharma

BANGALORE,May 5 (Reuters) - Independent oil and natural gas companies Cimarex Energy Co (XEC.N), W&T Offshore Inc (WTI.N) and Denbury Resources Inc (DNR.N) swung to quarterly losses, hurt by writedowns and charges resulting from lower oil and gas prices.

Quarterly production at W&T and Cimarex fell and they forecast lower production for the second quarter. However, they backed their 2009 production views.

The energy sector has been hit hard by the collapse in oil and gas prices, forcing many exploration and production companies to slash spending and trim output to protect profit margins.

Commodity prices are expected to decline further, especially natural gas prices, which should fall below the $3 level, Natixis Bleichroeder anlayst Curtis Trimble said by phone.

Shares of W&T and Denbury fell 9 percent, while Cimarex shares slid 8 percent Tuesday on the New York Stock Exchange.

Houston-based W&T Offshore's first-quarter production dropped 31 percent to 21.4 billion cubic feet equivalent (bcfe) and it forecast lower second-quarter production.

On a conference call with analysts, the company said it had already spent about half of its current 2009 capital budget as it was drilling more in the first half of the year.

"Our activity levels will start to slow down toward the end of the second quarter," W&T said during the call.

"Looking forward, expectations should be relatively low from the company, primarily because of low drilling activity," analyst Trimble said.

Citing a slowdown in drilling activity, Cimarex forecast second-quarter production of 444 million cubic feet equivalent (mmcfe) per day to 456 million mmcfe per day, down from 488.4 mmcfe per day, a year earlier.

CONSERVING CASH

The deterioration in commodity prices forced PetroQuest Energy Inc (PQ.N) to cut the lower end of its 2009 capital expenditure forecast range by $20 million to between $60 million and $90 million.

"We just don't see the value in producing a lot of gas in a $2 and $3 environment," the company said during a conference call with analysts, adding that if conditions did not improve it would lower its capital expenses budget further to about $50 million.

"They are being pretty prudent. They are really watching their money and believe it or not they'll generate free cash flow this year," Capital One Southcoast analyst Richard Tullis said by phone. On its conference call, W&T also said that "it would prefer to remain flexible, build cash, and maintain the ability to pursue other strategic options such as drilling opportunities, corporate acquisitions or asset purchases."

Trimble said that given W&T's substantial liquidity position and generally positive history of executing and extracting value from acquisitions, he wouldn't be surprised to see the company make an acquisition prior to the onset of the hurricane season.

"W&T has always been an acquire and exploit entity, they have always been one to make acquisitions that are accretive so, its no big surprise at all," RBC Capital Markets analyst Scott Hanold said by phone.

LOWER PRICES HURT Q1

The investment community erroneously thought that most of these reserve writedowns would be taken in the fourth quarter of 2008, Natixis's Trimble said.

While W&T reported a first-quarter loss on an impairment charge resulting from lower realized natural gas prices, Denver-based Cimarex swung to a quarterly loss, hurt by a $501.8 million asset writedown. [ID:nWNAB3084] [ID:nWNAB3085]

Smaller peer PetroQuest posted a quarterly loss as lower gas prices resulted in a $104 million writedown. [ID:nWNAB3086]

"With (oil and natural gas) prices continuing to trend down, companies will remain susceptible to negative reserve revisions in the future as well," Trimble said.

At Denbury, charges on derivates contracts resulted in a net loss of 7 cents a share. [ID:nBNG306554]

A ceiling test writedown led to a net loss of $3.14 a share at oil and gas producer Unit Corp (UNT.N). [ID:nBNG300366]

W&T Offshore shares were trading down 87 cents at $9.96, Denbury's were down $1.18 at $17.30 and Cimarex shares were down $1.81 at $28.16 Tuesday afternoon on the New York Stock Exchange.

Shares of PetroQuest fell as much as 23 percent to $3.35, but later recouped some of their losses and were down 62 cents at $3.77 Tuesday afternoon on the New York Stock Exchange. (Additional reporting by Arup Roychoudhury and Sakthi Prasad; Editing by Himani Sarkar, Anil D'Silva)