Sector Snap-Independent energy sector tumbles

NEW YORK - Shares of independent energy companies sank on Thursday, along with the broader market and crude oil, just two months removed from a quarter where companies reported robust earnings.

Crude oil prices sank $2.97, or 6.2 percent, to $43.84, a near four-year low. The price of oil has shed more than two-thirds of its value since its record peak of $147.27 in July.

Along with the deterioration of crude prices, independent energy companies in the oil services, refinery and production sectors have also fallen from third-quarter glory.

Shares of Schlumberger Ltd., the world's largest oilfield services company, sank $2.53, or 6 percent, to $40. Refiner Holly Corp. saw its shares drop $1.19, or 7.3 percent, to $15.13. Shares of oil producer Noble Corp. fell $2.84, or 12 percent, to $20.91. Since July Schlumberger, Holly and Noble shares have dropped 64, 58 and 68 percent, respectively.

The Energy Information Administration, a section in the United States Department of Energy, on Thursday said third-quarter earnings for the 37 independent energy companies it analyzed grew 33 percent to $7 billion compared with earnings for the same period last year.

The EIA said producers and oil field services delivered the biggest boost in earnings due to higher oil and natural gas prices, along with increased rig activity, while earnings from refiners increased slightly on higher margins.

Third-quarter earnings for independent producers rose 192 percent, compared with the prior-year period while oil services companies saw an earnings lift of 12 percent in the third quarter, compared with the same period last year, due to an 11 percent rise in rig counts to 1,978 rigs. Third-quarter earnings for refiners gained 1 percent compared with the third quarter in 2007, the EIA reported.

Oil companies are facing a completely different environment in the fourth quarter as crude oil prices tumble, rig counts are falling and long-term capital projects are being scaled back or called off.

Other notable independent energy companies that have seen their shares fall since their third-quarter highs are oil services company Baker Hughes Inc., producer Pioneer Natural Resources Co. and Frontier Oil Corp.

On Thursday, Baker Hughes shares fell $2.40, or 8.4 percent, to $26.02. Pioneer shares dropped $2.64, or 14 percent, to $15.87, just after it hit its year-low of $15.41. Shares of Frontier Oil fell 70 cents, or 6.7 percent, to $9.81.

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