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Feb. 22, 2010, 4:11 p.m. EST

Energy stocks fall as Schlumberger weighs

Ethanol producers rise after Green Plains Renewable swings to profit

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By Steve Gelsi, MarketWatch

NEW YORK (MarketWatch) -- Energy stocks moved lower on Monday despite a big merger in the oil service sector, as shares of Schlumberger fell.

The NYSE Arca Oil Index dropped 0.9% to 1,035. The NYSE Arca Natural Gas Index dropped 1.6% to 537. The Philadelphia Oil Service Index /zigman2/quotes/210598360/realtime OSX +2.03% slipped 0.3% to 205.

Schlumberger /zigman2/quotes/201012972/composite SLB +3.26% fell 4% to $61.57 after it said it would pay about $11 billion in stock to buy Smith International /zigman2/quotes/204130711/composite SII +0.44% . Shares of Smith International rose 9% to $41.03. See full story.

Total SA CEO Christophe de Margerie on Monday said he'll continue to work to resolve a conflict surrounding a move to cut costs at one of the oil major's French refineries.

French labor leaders have called for the continuation of a Feb. 16 walkout in protest to Total SA's move last Sept. 15 to suspend operations at its Flanders refinery near Dunkirk in northern France.

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Hot Stocks: M&A in Oil Patch

Shares of Schlumberger and Smith International make big moves on merger news, but analysts say the bid price is higher than expected. Steve Gelsi reports.

Meeting with reporters on Monday, De Margerie said no other refining operations will be affected in France.

The conglomerate is reacting to difficult conditions in the refining business, he said.

"We don't close things just to close them," he said. "You need to adapt and if you don't do it, you're not responsible."

Despite the red ink in the energy sector, shares of some small-cap ethanol makers rallied after Green Plains Renewable Energy Inc. /zigman2/quotes/204775795/composite GPRE +2.22% swung to a fourth-quarter profit.

The Omaha, Neb. company earned $23 million, or 91 cents a share in the three months ended Dec. 31, compared to a loss of $1.8 million, or 8 cents a share, in the year-ago period. Revenue rose to $437 million from $183 million.

"During 2009 and more recently, we have continued to see demand for ethanol increase driven by expanded mandates and positive blend margins," the company said. "This combined with a record corn harvest resulted in an improved margin environment in late 2009 and early 2010."

Green Plains shares shot up 20% to $16.99. Pacific Ethanol rose 18% to $2.25. BioFuel Energy Corp. /zigman2/quotes/209013335/delayed BIOF +14.87% rose 8% to $2.99.

In an interview with MarketWatch, Green Plains CEO Todd Becker said demand for ethanol is increasing, partly because of rising federal standards requiring renewable fuels in the nation's gasoline.

Helped by lower corn prices, ethanol now costs about 38 cents a gallon less than gasoline, not counting an additional boost from a tax credit for wholesalers that blend the fuel with gasoline, he said.

US : Nasdaq
+1.65 +2.03%
Volume: 44,954
May 27, 2022 5:16p
$ 48.21
+1.52 +3.26%
Volume: 13.95M
May 27, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$68.14 billion
Rev. per Employee
$ 36.64
+0.16 +0.44%
Volume: 55,573
May 27, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$943.04 million
Rev. per Employee
US : U.S.: Nasdaq
$ 33.08
+0.72 +2.22%
Volume: 518,343
May 27, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$1.78 billion
Rev. per Employee
US : U.S.: OTC
$ 0.22
+0.03 +14.87%
Volume: 275,006
May 27, 2022 2:56p
P/E Ratio
Dividend Yield
Market Cap
$60.77 million
Rev. per Employee

Steve Gelsi is a reporter for MarketWatch in New York.

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