Delta Petroleum Drops As Wachovia Wonders About a Stock Sale and Per-Share Earnings

Shares of Delta Petroleum Corp. stumbled Wednesday after the oil and gas producer announced plans to issue more stock and an analyst voiced concerns about “continued dilution” to per-share earnings.

Late Tuesday after the market close, Delta said it would sell 6.2 million shares and separately offer $100 million in convertible senior notes due 2037. The company said it would use proceeds from the equity offer to pay down debt.

Wachovia Securities analyst David Tameron noted Delta’s share count is up 50 percent in the last eight quarters and the company’s debt load has gotten heavier, also. “Continued dilution continues to concern us,” he said in a client report.

“While the company has assembled some “prospective” acreage, we have yet to see any meaningful production or reserve increases,” Tameron wrote.

On Monday, the company cut its oil and gas production outlook for the first quarter to account for production lost to discontinued operations and sold properties.

Delta shares fell $1.38, or 5.6 percent, to $23.16 in midday trading on the Nasdaq Stock Market. Over the past year, the stock has traded between a June low of $13.79 and a high of $30.68 reached in December.

Delta had about 57.8 million shares outstanding as of March 2, according to a filing with the Securities and Exchange Commission.

Information from: biz.yahoo.com