Independent oil and gas explorers and producers benefited from higher oil prices during the third quarter, but it may not be enough to offset cascading natural-gas prices and higher costs, analysts say.

Oppenheimer & Co. analyst Fadel Gheit wrote in a recent research report that about half of the independent explorers and producers could produce earnings gains over year-ago levels, while the other half could show declines. Gheit, though, expects most to report modest declines from the second quarter.

Occidental Petroleum Corp. kicks off the industry's earnings season Wednesday. Most of its competitors, though, won't follow until next week, with many earnings reports tightly banded around Nov. 1. Apache Corp., for example, reports on Oct. 26, and Devon Energy Corp. releases its earnings on Nov. 1.

For the overall industry, Gheit said third-quarter crude oil prices were up 12 percent from year-ago levels, while natural gas was 24 percent lower. Compared with the second quarter, crude prices were flat and natural gas prices slightly lower.

Crude prices spiked during the quarter, as geopolitical tensions increased with fears of Iranian nuclear ambitions and Israel's battle in Lebanon.

Natural gas prices fell in the quarter as minimal hurricane disruptions meant gas storage inventories grew to "historically high levels," Deutsche Bank's Shannon Nome wrote in a recent report.

On the cost side, Bank of America analyst Robert S. Morris wrote in a recent report that per-unit costs rose from year-ago levels. But they may be flat, compared with the previous quarter, for the first time in three years.