El Paso shares rise on production outlook
HOUSTON (AP) — Shares of natural gas producer and distributor El Paso Corp. rose Thursday after the company said it has pre-sold a majority of its oil and gas production this year at above-market prices, even as it set a forecast for net income that was below expectations.
The company said it expects to earn between 90 cents and $1.05 a share in 2011, below Wall Street expectations of $1.07, according to analysts surveyed by FactSet.
But the company said its 2011 guidance assumes commodity prices of $4.25 per million Btu for natural gas and $85 per barrel for oil.
At the same time, El Paso has already sold the vast majority of its production through futures contracts at a higher price. It has sold 75 percent of its domestic natural gas production hedged at $5.95 per million Btu and about 85 percent of its oil production for between $86 and $92 per barrel.
Shares of the company jumped $1.13, or 7.8 percent, to close at $15.58.