By Steve Gelsi
Energy stocks fell back from recent gains Tuesday as oil prices
cooled off, while oil service firm Cameron International drew
praise from analysts on plans to buy Natco Group for $780 million
in stock.
The Amex Oil Index (XOI) dropped 0.6% to 1,014. The gauge of
major petroleum producers and refiners had jumped 9% to 1,020 in
three straight days of powerful gains on May 28, 29 and June 1.
The Amex Natural Gas Index (XNG) dropped 1.3% to 455.
The Philadelphia Oil Service Index (OSX) subtracted 1% to
183.
Crude futures fell 81 cents to $67.77.
Cameron International Corp. (CAM) said it would buy Natco Group
(NTG) for 1.185 shares of stock for each share of Natco. The price
valued the smaller firm at a 24% premium to its Monday close.
Shares of Natco rose 15% to $35.53 a share. Cameron dropped 4.3% to
$31.05.
Analysts at Pritchard Capital Partners said Cameron will benefit
from Natco Group's research and development in the emerging area of
sub-sea processing of raw petroleum products to remove water and
other matter.
"Cameron is acquiring NTG's strategically positioned
manufacturing facilities/distribution network in Southeast Asia,
the Middle East, South America and West Africa plus manufacturing
capabilities in processing and separation products," Pritchard
analysts said in a note to clients.
"This is a major positive for Cameron as it trailed FMC
Technologies, Inc.'s (FTI) market leading subsea processing
solutions technologies," Pritchard said.
Royal Dutch Shell Plc (RDSA) Chief Executive Jeroen van der Veer
said Tuesday he's seen costs come down in recent months after
re-working contracts with its oil service firms.
"As far as projects are concerned and normal operating costs, we
see a lot of our renegotiations ... enter with lower costs at this
moment," he said at an industry conference in Abu Dhabi, according
to a Reuters report.
Among analyst actions, Citigroup downgraded French integrated
oil giant Total SA (TOT) to hold from buy. Total SA shares fell
1.3% to $58.71.
Atlas Pipeline Partners (APL) said it's closed a joint venture
with Williams (WMB) called Laurel Mountain Midstream LLC, which
plans to develop Atlas' presence in the southwestern Pennsylvania
portion of the Marcellus Shale. Shares of Atlas Pipeline Partners
fell 1.3% to $5.34.
Atlas Energy Resources, LLC (ATN) will become the anchor tenant
on the system. As part of the deal, Williams will pay approximately
$90 million in cash to Atlas, which will hold a 49% equity interest
in Laurel Mountain.
-By Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com
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