Mid-cap U.S. oil cos loosen purse string to pump up output 08/04 08:51 AM
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* Plains Exploration, Cimarex, PetroQuest boost capex
* Cos aiming to up production of high-premium liquids
By Krishna N Das
BANGALORE, Aug 4 (Reuters) - A number of small and medium-sized U.S. oil and natural gas companies have increased their annual spending budget as they look to produce more of oil and natural gas liquids from their properties.
April-June Natural gas prices rose about 3 percent from year-ago levels to average $4.38 per million British thermal units. U.S. crude oil prices soared 32 percent to average $103.49 a barrel during the period.
Plains Exploration & Production (PXP:$36.2400,$-1.4100,-3.75%) , which reported a near three-fold jump in quarterly profit, raised its capital spending outlook by a fourth to $1.5 billion -- excluding deepwater spending.
"Due primarily to our accelerated drilling activity in the Eagle Ford and a higher than originally planned rig count in the Haynesville, the board of directors approved an increase in 2011 capital spending," Plains Exploration said in a statement.
Denver-based Cimarex Energy Co (XEC:$76.3100,$-4.4900,-5.56%) said its full-year exploration and development capital investment is expected to be in the range of $1.5-$1.6 billion, higher than its earlier view of $1.3-$1.5 billion.
Smaller peer PetroQuest Energy Inc (PQ:$7.28,00$-0.3700,-4.84%) also slightly raised its full-year expenditure view to $120-$130 million.
All of these companies are looking to accelerate drilling activity in areas rich in oil or gas liquids, such as the Permian and Eagle Ford shale fields in Texas.
"We are now seeing the results of having large acreage positions in liquids-rich operating areas where we have leveraged our technical expertise," said Swift Energy Co (SFY:$34.6003,$-2.2897,-6.21%) Chief Executive Terry Swift.
Beside spending on existing assets, some companies are also looking at adding acreage through small acquisitions.
"We (have) pursued future growth through two bolt-on acquisitions that offer existing oil production and reserves with sizable upside potential, located in the Uinta and DJ Basins," said Fred Barrett, the CEO of Bill Barrett Corp (BBG:$48.50,00$-0.4100,-0.84%) .
Shale-related mergers and acquisitions account for 26 percent of announced deals in the oil and gas sector this year alone, according to data from Thomson Reuters. (Additional reporting by Divya Lad; Editing by Joyjeet Das)