Saturday, August 16, 2008

Weekend Beach Reading: August 18, 2008

Despite record energy prices in the second-quarter, Anadarko Petroleum (APC-$57.61) said its net income for the three-months ended June 30 fell 98 percent to $23 million, due to $1.6 billion in derivative losses.

Although a $250 million cash infusion is good news, if sellers can contract higher liquefied natural gas prices in Europe and Asia, where will Cheniere Energy (LNG-$4.89)
find suppliers willing to ship LNG to its U.S. terminals?

process of digging fossil fuels out of the ground is getting more expensive. Natural gas producer EXCO Resources (EXC-$22.58) said drilling and development capital expenditures alone increased almost 34 percent to $136 million for the second-quarter ended June 30, compared with the prior year quarter.

Rentech (RTK-$2.33) said it lost $54 million in the nine-month period ended June 30, much of it due to R&D expenses, However, the coal-to-liquid fuel company
is finally producing liquid synthetic fuel at its $45 million Product Demonstration Unit in Commerce City, Colorado, using natural gas as the feedstock.

Ethanol producer VeraSun Energy (VSE-$7.20) said net sales from ethanol increased $710.4 million to $852.7 million for the second-quarter ended June 30, driven by additional production from new capacity and higher ethanol prices. Nonetheless,
escalating prices of corn and natural gas continue to depress gross profit margin, which declined 121 basis points to 7.1 percent as a percentage of sales.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

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