Diamonds and Dogs
8/13/12Oil and gas making moves in both directions
Quicksilver Resources Inc. (KWK)
Quicksilver Resources is struggling today, down 10.92% at $4.08. The oil and gas company saw its shares get drilled after announcing it lost $673 million in the second quarter. The loss equates to a loss of $3.96 per share; compared to net income of $109 million, or 61 cents per share, a year earlier. Revenue fell 32 percent to $169 million, well below analysts' forecast of $181.2 million. To address this huge loss, Quicksilver stated that it would cut its capital spending. Full-year capital spending was reduced to $360 million from a previously planned $410 million through reduced drilling. The company also said it made changes to its credit facility. Quicksilver dug its way downward, much closer to its 52-week low.
Tesoro Corporation (TSO)
Tesoro Corporation rallied higher today, up 9.49% at $38.87. The oil refining company "struck oil" today as its shares bounced after news was released that Tesoro would buy a California oil refinery from BP. Tesoro is buying BP's California oil refinery and 800 gas stations for $1.8 billion, plus about $1.3 billion for inventory. According to analysts, the company is paying below market value which will help Tesoro boost its earnings for very low cost. Management expects the deal to be immediately accretive to earnings and expects it can save $250 million per year through synergies with its other plants. Tesoro reached a new 52-week high, rewarding its patient investors.
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