A natural gas discovery in Australia announced by Chevron (CVX 67.07, +0.13, +0.19%) at drilling sites jointly owned by Royal Dutch Shell (RDS .A 52.12, +0.16, +0.31%) failed to lift the gloom hanging over the sector.
Hurricane Bill strengthened to a Category 4 storm in the Atlantic Ocean, but was expected to take a path away from the U.S.'s energy infrastructure and remain at sea.
Oil prices also weighed on the sector, with crude futures retreating by nearly a $1 to the low $68-a-barrel level in the face of a glut of supply. See full story.
Among the major indexes in the energy sector, The NYSE Arca Oil Index (XOI 935.19, +0.83, +0.09%) fell 1.1% to 924. The NYSE Arca Natural Gas Index (XNG 449.04, -0.88, -0.20%) dropped 0.9% to 446. The Philadelphia Oil Service Index (OSX 167.62, -0.87, -0.52%) fell 1.3% to 166.
Chevron fell 0.9% to $66.36 after it announced two natural gas discoveries off the coast of Western Australia. Royal Dutch Shell shares fell 0.4% to $51.79.
The Clio-2 well discovered 375 feet (115 meters) of net gas pay in a well dug in 3,200 feet of sea water. Chevron owns two thirds of the well and Royal Dutch Shell owns the remaining stake.
The company also made a discovery with the Kentish Knock-1 well, which was drilled in approximately 4,000 feet of water to a total depth of approximately 8,300 feet. Chevron and Shell each own a 50% stake in that site.
The discoveries come just a day after Exxon Mobil lined up a buyer for liquid natural gas from Western Australia, as PetroChina agreed to take product from the delayed Gorgon project in the region.
