More Ups & Downs in the Oil Patch (APA, MRO, GLF, BP)

Apache Corp. (NYSE:APA) reported net income of $1.02 billion and $3.03 EPS for the first quarter of 2008, more than double same period results for 2007 of $492 million and $1.47 EPS. Revenue jumped to $3.19 billion from $2.02 billion a year ago. Analysts were looking for revenue of $3.06 billion and $3.05 EPS. So far this morning, the stock is taking a beating, down more than $5.00. Because APA is strictly an E&P play, it’s relatively easy to link estimates to the price of crude. There’s no big mystery waiting to be revealed.

That’s not the case with an integrated oil company, like Marathon Oil Corp.(NYSE:MRO), which also reported first quarter 2008 results this morning. MRO showed earnings of $731 million and $1.02 EPS for the quarter, compared with earnings in the same period last year of $717 milliion and $1.03 EPS. First quarter revenues totaled $18.1 billion, compared with $13 billion in the same period a year ago. Analysts were expecting revenues of $22.16 billion and $0.82 EPS. MRO’s refining segment reported a loss of $75 million in the quarter, compared with a gain of $345 million last year. MRO refined more barrels than a year ago, but lost $0.26/gallon of refined product. Losses on derivatives changes cost the company $120 million in the first quarter. MRO stock is trading up nearly a buck in early morning trading. Go figure.

Gulfmark Offshore (NYSE: GLF) is trading down by 5% in the first hour of trading. CapitalOne Southcoast downgraded its rating on the stock to a "Neutral" rating from an "add" rating.

BP plc (NYSE: BP) shares probably would have been lower with thee rest of the sector, but shares are dowm almost 1% at $72.17.  HSBC Securities downgraded its prior "Overweight" rating down to a "Neutral" rating.

Paul Ausick
May 1, 2008