Oil and natural gas producer Rosetta Resources forecast an increase in production for next year, but disappointing results from its exploratory well program in the Southern Alberta Basin sent its shares down as much as 11 percent.

Two of the four wells drilled in northwestern Montana stabilized at rates of 154 barrels of oil equivalent per day (boe/d) and 104 boe/d.

Suntrust Robinson Humphrey analyst Neal Dingmann said he had expected each well to test at 250-300 boe/d.

We will complete our current horizontal drilling program (in Southern Alberta Basin) and adjust our exploratory efforts and spending to reflect those results and hold our position for future optionality, Chief Executive Randy Limbacher said in a statement on Monday.

Analyst Dingmann said Rosetta would not increase its activity in the basin and adopt a wait-and-see approach.

However, the company said it continues to benefit from production growth from its liquids-rich Eagle Ford Shale assets in south Texas.

The Houston-based company expects full-year 2012 production of 220-240 million cubic feet of natural gas equivalents per day (mmcfe/d). Rosetta is currently producing about 195 mmcfe/d.

Rosetta expects to exit 2012 with 250-280 mmcfe/d. It had projected 2011 exit rate of 190-200 mmcfe/d.

The company set a capital budget of $640 million for next year and said 90 percent of it would be spent on the liquids-rich area of the Eagle Ford shale.

Rosetta Resources shares, which have gained 34 percent this year, were trading down $5.02 at $45.55 on Friday on Nasdaq.

(Reporting by Swetha Gopinath in Bangalore; Editing by Hezron Selvi, Saumyadeb Chakrabarty)