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Wednesday's Energy Stocks: Gas utilities survive selloff; broad markets mixed

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Wednesday's Energy Stocks: Gas utilities survive selloff; broad markets mixed

Gas utilities deflected a sectorwide selloff while the broader markets ended on different sides of the ledger on Wednesday, Jan. 18. The Dow Jones Industrial Average edged down 0.11% to 19,804.72 though S&P 500 bounced up 0.18% to 2,271.89. The SNL Energy Index fell 0.36% to 285.13.

ONE Gas Inc. saw an increase of 2.73% on more than twice the normal volume to close at $64.37, a trading day after raising its quarterly dividend for the first quarter of 2017 by 7 cents, or 20%, to 42 cents per share. On the same day, the utility company forecast 2017 net income in the range of $152 million to $162 million.

RGC Resources Inc. picked up 1.09% in brisk trading to finish at $25.50, following the approval of a 3-for-2 split of the company's common stock. The split will entitle shareholders to an additional share of stock for every two shares owned.

In other gas utility stocks, Atmos Energy Corp. climbed 0.67% to $75.24, South Jersey Industries Inc. rose 0.75% to $32.42 and New Jersey Resources Corp. ascended 0.55% to $36.25, all in below-average trading. The SNL Gas Utility Index advanced 0.55% to 539.15.

Gulfport Energy Corp. spiked 2.27% in about average trading to settle at $21.14, a trading session after the company said its 2016 oil and gas production was 31% higher than in 2015 despite a deep dip in capital expenditures. Gulfport on Jan. 17 said fourth-quarter 2016 production was 787 MMcfe/d, made up of 87% gas, 9% liquids and 4% oil. For the full year, the company reported 719.8 MMcfe/d.

Shares of Dynegy Inc. relinquished the previous day's gains and receded 5.28% on slightly below-average volume to end at $9.87, following a downgrade from UBS Securities LLC. The brokerage lowered Dynegy's ratings to "sell" from "neutral," citing the company's high leverage and exposure to PJM Interconnection LLC and ISO New England Inc. capacity auctions results.

"We stress that our expectations of disappointing PJM and ISO-NE capacity results in the upcoming auction will hurt DYN the most among [independent power producers] as we estimate the company derives ~75% of its EBITDA from these two regions on a 2019E basis," UBS analyst Julien Dumoulin-Smith said in a note to investors.

Trailing Dynegy's losses, First Solar Inc. lost 2.16% to $34.41, Atlantic Power Corp. declined 2.04% to $2.40 and Calpine Corp. retreated 1.69% to $12.20, all on light volume. The SNL Merchant Generator Index slipped 0.10% to 88.47.

Among coal players, Foresight Energy LP dropped 1.22% on weak volume to settle at $6.99. The partnership hopes to end a lawsuit over the termination of employees at its troubled Deer Run mine with a $550,000 settlement fund for employees and their attorneys.

Alliance Holdings GP LP shed 2.49% to $27.44 and Alliance Resource Partners LP dipped 2.02% to $21.80 while Westmoreland Coal Co. gained 1.05% to $17.29, all on light volume. The SNL Coal Index gave up 0.49% to 75.92.

February natural gas futures added to losses at midweek Wednesday, Jan. 18, as weather forecasts were little changed and priced into the market. The contract attempted gains, reaching an intraday high at $3.437/MMBtu, but returned to the negative side of the ledger, finding a $3.282/MMBtu low and a settle 11.0 cents lower on the day at $3.302/MMBtu.

Market prices and index values are current as of the time of publication and are subject to change.