Oil & gas companies hit by lower prices; see higher spending

(Reuters) - Independent oil and gas companies Concho Resources Inc (CXO.N) and Forest Oil Corp (FST.N) reported lower quarterly profits, hurt by a drop in realized commodity prices.

However, Concho and smaller peers Swift Energy Co (SFY.N) and Comstock Resources Inc (CRK.N) were upbeat about their full-year prospects as all three forecast higher spending and drilling activity for 2009.

The increased forecast comes at a time when a precipitous drop in oil prices has sliced profits across the energy sector, forcing producers to pare their spending plans and cancel new projects.

"To ensure that Swift Energy enters 2010 with an emphasis on growing reserves and production, we are raising our 2009 capital budget from $125 million-$150 million to $160 million-$180 million," Chief Executive Terry Swift said in a statement.

Separately, Swift Energy said it would offer 5 million common shares and use the proceeds to repay debt.

Concho too raised its full-year spending and production forecast. It currently sees 2009 production of 10.6 million barrels of oil equivalent (mmboe), compared with its prior view of 9.7 mmboe.

"Costs to drill and complete wells has fallen since the beginning of the year which will allow Comstock to drill more wells than was anticipated in its original 2009 budget," the company, which plans to spend $360 million for drilling in 2009, said in a statement.

It now expects to drill 37.4 net wells, compared to its earlier forecast of 34.8 net wells.

Forest Oil's adjusted net income for the quarter fell 60 percent to $53.6 million, or 52 cents a share, while Concho's adjusted profit was 34 cents a share, compared with 53 cents a year earlier.

Swift Energy and Comstock reported second-quarter losses as both witnessed a drop in average realized prices.

The price of benchmark U.S. crude averaged just short of $60 per barrel in the second quarter, up from $43 in the first quarter but less than half of year-earlier levels. U.S. natural gas prices remain near seven-year lows.

Shares of Concho and Forest Oil closed at $33.04 and $17.95, respectively, Monday on the New York Stock Exchange.

Shares of Swift fell 7 percent to $19.50 in trading after the bell. Comstock closed at $40.81.

(Reporting by Arup Roychoudhury and Adveith Nair in Bangalore; Editing by Deepak Kannan)