Stone Energy Corp. (NYSE: SGY) posted first-quarter 2014 earnings of 52 cents per share, which outperformed the Zacks Consensus Estimate of 37 cents. The reported figure, however, declined 36.6% from 82 cents per share earned in the year-earlier quarter.
Total operating revenue decreased 4.2% year over year to $223.8 million in the quarter from approximately $233.7 million. However, quarterly revenues surpassed the Zacks Consensus Estimate of $218.0 million.
Operational Highlights
During the quarter, production averaged 269.0 million cubic feet of gas equivalent per day (MMcfe/d), up 11.8% from the prior-year quarter level of 240.6 MMcfe/d. Of the total production, natural gas accounted for nearly 52%, oil constituted 35% and the remaining 13% was natural gas liquids (NYSE: NGL).
Overall realization on a per Mcfe basis was $9.20 in the reported quarter versus $10.76 per Mcfe in first-quarter 2013. Natural gas price of $4.46 per Mcf was up from $3.55 per Mcf in the year-ago quarter, while natural gas liquids price came in at $54.84 per barrel (up 29.1% on an annualized basis). Oil price, however, decreased 13% from the year-ago quarter to $97.52 per barrel.
On the cost front, unit lease operating expenses decreased to $1.94 per Mcfe (versus $2.45 per Mcfe in the year-ago quarter). Depreciation, depletion and amortization was $3.38 per Mcfe (versus $3.44 per Mcfe), while salaries, general and administrative (SG&A) expenses came in at 67 cents per Mcfe (versus 64 cents per Mcfe).
Liquidity
At the quarter-end, Stone Energy had approximately $202.8 million in cash and $1,030.5 million in long-term debt, with a debt-to-capitalization ratio of 51.1% versus 49.5% in the preceding quarter. Discretionary cash flow fell 13.3% year over year to $138.0 million.
Guidance
For the coming quarter, the company expects net daily production of 261−273 MMcfe. For full-year 2014, it anticipates total volume in the range of 258−282 MMcfe per day. Stone Energy expects its capital outlay projection for full-year 2014 to be $825 million.
Outlook
Lafayette, LA-based Stone Energy is an independent oil and gas exploration and production company engaged in the acquisition and subsequent exploration, development, operation and production of oil and gas properties, located primarily in the Gulf of Mexico (GoM).
Currently, the company is well positioned in the industry, with widespread high-yielding inventory. Notably, it boasts an extensive capital project inventory. Moreover, Stone Energy is generating surplus cash flow with no bank debt. Although the company aims to apportion the capital across its portfolio, its focus will be on the GoM shelf and Marcellus region.
However, as is the case with other independent exploration and production companies, results for Stone Energy are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces.
At present, Stone Energy has a Zacks Rank #3 (Hold). Investors interested in the oil and gas sector could consider stocks like Unit Corp (NYSE: UNT), Targa Resources Partners LP (NYSE: NGLS) and Boardwalk Pipeline Partners LP (NYSE: BWP). All of these carry a Zacks Rank #1 (Strong Buy).
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
BOARDWALK PIPLN (NYSE: BWP): Free Stock Analysis Report
TARGA RESOURCES (NYSE: NGLS): Free Stock Analysis Report
STONE ENERGY CP (NYSE:
UNIT CORP (NYSE: UNT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research