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by Stockwatch Business Reporter

West Texas Intermediate crude for June delivery lost 49 cents to $46.21 on the New York Merc, while Brent for July lost 25 cents to $47.83 (all figures in this para U.S.). Western Canadian Select traded at a discount of $12.30 to WTI ($33.91), up from a discount of $12.50. Natural gas for June lost 5.9 cents to $2.096. The TSX energy index lost 1.31 points to close at 179.27.

Saskatchewan oil producer Rock Energy Inc. (RE) added five cents to 91 cents on 341,200 shares, trying to regain some of the 24 cents it lost yesterday, when it plunged below the $1 mark for the first time since late 2012 after releasing underwhelming first quarter financials. These showed production of 2,893 barrels of oil equivalent a day, nearly half of the 5,155 barrels a day produced in the same period a year earlier. Rock explained that it "elected" to have its production fall by not completing the workovers that would maintain production, in order to save money. It spent less than $800,000 in the quarter, down from over $14-million a year earlier. As for the rest of the year, Rock does not have a formal budget, saying it will match its spending to its cash flow. In practice this will likely mean more production decreases. All in all, Rock seems to be in considerably rougher shape than it indicated back in December, the month that it started a "strategic alternatives" review -- code for putting itself up for sale. President and chief executive officer Al Bey told BNN at the time (Dec. 16) that he "would characterize our company as being quite strong." He said Rock's production, which he pegged at 3,800 to 4,000 barrels a day, enjoyed low decline rates and costs, "which means we don't have to spend that much money to actually hold our production flat." (Anyone who took that to mean that Rock would hold its production flat was to be sorely disappointed.) Mr. Bey continued that Rock also has relatively low debt, less than $60-million. (Its ratio of net debt to annualized funds flow, however, is relatively towering -- 6.9 to 1, as Rock calculated in its most recent SEDAR filings, based on its March 31 net debt load of $58.4-million.) "We're not up against any walls," concluded Mr. Bey on BNN, adding, "We're not forced into making, let me say, a fire-sale or wrong decision." Yet in updates since then, including yesterday's, Rock has warned that its strategic review process "may impact the ability of the company to continue to successfully manage its credit facility agreements and its ability to continue future operations." Shareholders seem anxious.

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