August 12, 2011 / 1:17 PM / 7 years ago

UPDATE 2-Celtic Exploration backs FY exit rate, Q2 profit up

* Q2 net income C$4 mln vs C$3.2 mln year ago

* Q2 rev down 4 pct to C$54.8 mln

* Lowers FY avg production outlook to 18,400-18,700 boe/d

* Shares up 13 percent (Adds analyst comment in third paragraph, share movement)

Aug 12 (Reuters) - Celtic Exploration’s second-quarter profit rose despite adverse weather conditions and plant downtime hurting output, and the oil and natural gas company backed its 2011 exit production outlook, sending its shares up 13 percent.

Celtic still expects to exit 2011 with 24,500 boe/d in average production. Capital expenditure is forecast at C$260 million ($262.4 million).

BMO Capital Markets analyst Jim Byrne said the quarter’s production decline was expected and Celtic’s Resthaven Montney block in Alberta is expected to drive momentum in the second-half of the year.

Celtic expects to bring Resthaven production on-stream by September and it has already begun construction of a gas gathering and pipeline system in the area.

“The wells at Resthaven are expected to produce associated liquids at a rate of 40-50 barrels per million cubic feet of natural gas,” the company said in a statement.

Celtic expects production to average between 18,400-18,700 barrels of oil equivalent per day (boe/d), lower than the 19,300-19,700 boe/d forecast earlier.

Combined oil and gas production in the second-quarter fell 16 percent to 15,203 boe/d .

April-June net income rose to C$4 million, or 4 Canadian cents per share, compared with C$3.2 million, or 4 Canadian cents per share, a year ago.

Revenue before royalties fell 4 percent to C$54.8 million.

Analysts, on average, had expected earnings of 4 Canadian cents on revenue of C$58.5 million, according to Thomson Reuters I/B/E/S.

Shares of the company rose 13 percent to C$23.98, before paring some gains to trade up at C$22.96 in early trade on Friday on the Toronto Stock Exchange. ($1 = 0.991 Canadian Dollars) (Reporting by Abhiram Nandakumar in Bangalore; Editing by Sriraj Kalluvila)

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