By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) — Energy stocks rebounded Friday as the broad market rose, while energy pipeline giant Kinder Morgan drew almost $2.9 billion in capital for its initial public offering and ConocoPhillips advanced on plans to boost its dividend by 20% and buy back $10 billion in stock.
The NYSE Arca Oil Index (XOI 1,300, +1.14, +0.09%) edged up about 0.1% to end the day at 1,300, about flat with its week-ago close of 1,301.
The gauge of oil producers was lifted by a 2% rise in shares of ConocoPhillips (COP 71.58, +1.50, +2.14%) . The oil major will increase its dividend to 66 cents a share and buy back an additional $10 billion in stock.
Separately, ConocoPhillips plans to spend $13.5 billion on capital projects in 2011, up from an authorization of $11.2 billion for 2010.
The Houston energy firm’s spending on exploration and production will increase to $12 billion, from $9.7 billion.
“This year’s capital budget reflects our emphasis on building the upstream business,” said Jim Mulva, chairman and chief executive officer. “We expect competitive returns from our increased investments in North American and Australian unconventional resource projects.”
Checking the other energy sector benchmarks, the NYSE Natural Gas Index (XNG 642.96, +0.78, +0.12%) rose 0.1% to 643, after dropping more deeply into the red early in the day. The index of natural gas producers finished out the week well below its ending point of 650 from seven days ago.
The Philadelphia Oil Service Index (OSX 269.68, -0.66, -0.24%) dropped 0.2% to 270, holding on to a narrow gain from its week-ago level of 268.
Energy drew strength from the Dow Jones Industrial Average (DJIA 12,273, +43.97, +0.36%) which rose 44 points, after dropping earlier in the day.
In a sign of strong interest in the pipeline sector, Kinder Morgan Inc. (KMI 31.05, +1.05, +3.50%) priced its IPO at $30 a share, above its expected $26-to-$29 price range. The shares ended the day with a gain of 3.5%. See Kinder Morgan IPO story.
Dynegy Inc. (DYN 5.67, -0.07, -1.22%) dipped 1.2% to $5.67. The power firm issued a letter to shareholders urging them to vote in favor of Carl Icahn’s bid to buy the company for $5.50 a share, after the transaction was approved by regulators.
“You have an opportunity to decide whether Dynegy should sell itself to a financially stronger entity and provide all stockholders with a known value today, or alternatively, continue to work through significant financial challenges,” the Houston power firm said.
Late Thursday, Dynegy said the Federal Energy Regulatory Commission authorized the merger deal with an affiliate of Icahn Enterprises LP (IEP 42.15, +0.29, +0.69%)
