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WPX Energy (WPX) Q1 Loss Narrower than Expected, Sales Beat
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Independent oil & gas operator, WPX Energy Inc. reported a loss of 15 cents per share in the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 17 cents. The quarterly figure was also narrower than the year-ago quarter’s loss of 21 cents.
Total Revenue
WPX Energy’s quarterly revenues of $461 million surpassed the Zacks Consensus Estimate of $254 million by 81.3%. Further, total revenue jumped 113.4% from $216 million in the year-ago quarter.
The year-over-year increase in total revenue was due to higher realized average prices and production volumes.
Highlights of the Release
Total production in the first quarter was 90,000 barrels per oil equivalent (boe) per day, up 12% year over year. Total liquids accounted for 64% of the total production, reflecting the company’s increasing focus on oil.
Oil production was 46,100 barrels per day which was nearly 11.0% higher than the year-ago quarter level of 41,500 barrels per day.
Total expenses were $291 million, up 130.9% from $126 million in the year-ago quarter. Excluding the gain on sales of assets and divestment of transportation contracts, the total expenses in the reported quarter was up only 0.6%.
Interest expenses in the reported quarter were $47 million, down 17.5% from $57 million in the year-ago quarter.
WPX Energy, Inc. Price, Consensus and EPS Surprise
Realized oil prices in the quarter were $45.31 per barrel, up 76.8% from the year-ago quarter.
Realized natural gas prices were $2.51 per thousand cubic feet (Mcf), up 65.1%. Realized prices for natural gas liquids were up 192.1% to $20.85 per barrel.
For the rest of 2017, the company has 39,392 barrels per day of oil hedged at a weighted average price of $50.84 per barrel. Further, WPX Energy has 170,000 million British thermal unit (MMBtu) per day of natural gas hedged at a weighted average price of $3.02 per MMBtu.
For 2018, WPX Energy has 42,000 barrels per day of oil hedged at a weighted average price of $54.36 per barrel. The company also has 185,000 MMBtu per day of natural gas hedged at a weighted average price of $2.98 per MMBtu.
Financial Update
WPX Energy had $142 million of cash and cash equivalents as of Mar 31, 2017, compared with $496 million at the end of 2016.
Long-term debt as of Mar 31, 2017 was $2,575 million, flat with the 2016 end levels.
Net cash from operating activities in the first quarter was $22 million compared with $19 million in the same period a year ago. Capital expenditure in the quarter was $237 million compared with $185 million in the year-ago period. Guidance
For 2017, WPX Energy has a capital budget of $905–$985 million. More than half of the capital is targeted for development in the Delaware Basin.
The company reiterated 2017 total production of 103–113 thousand barrels of oil equivalents per day (MBoe/d), including 52–56 thousand barrels per day (Mbbl/d). Projected 2017 oil volumes represent 30% growth from 2016 levels.
Our View
WPX Energy's first-quarter performance was better than expected due strong production from its oil assets and substantial recovery in the commodity prices.
The company continues to work on its strategy of increasing oil production, which is evident from the rising liquid mix in total production. The two acquisitions closed in Delaware Basin during the first quarter will help the company further increase its oil production.
We believe WPX Energy's exposure in the Delaware, Williston and San Juan basins will enable it to achieve its goal of 30% higher oil generation in 2017 from 2016 levels.
Anadarko Petroleum Corp. reported first-quarter 2017 adjusted loss of 60 cents per share, wider than the Zacks Consensus Estimate of a loss of 26 cents.
Devon Energy Corp. (DVN - Free Report) reported first-quarter 2017 adjusted earnings per share of 41 cents, beating the Zacks Consensus Estimate of 40 cents by a penny.
Noble Energy, Inc. reported adjusted loss of 5 cents per share for the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 13 cents.
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WPX Energy (WPX) Q1 Loss Narrower than Expected, Sales Beat
Independent oil & gas operator, WPX Energy Inc. reported a loss of 15 cents per share in the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 17 cents. The quarterly figure was also narrower than the year-ago quarter’s loss of 21 cents.
Total Revenue
WPX Energy’s quarterly revenues of $461 million surpassed the Zacks Consensus Estimate of $254 million by 81.3%. Further, total revenue jumped 113.4% from $216 million in the year-ago quarter.
The year-over-year increase in total revenue was due to higher realized average prices and production volumes.
Highlights of the Release
Total production in the first quarter was 90,000 barrels per oil equivalent (boe) per day, up 12% year over year. Total liquids accounted for 64% of the total production, reflecting the company’s increasing focus on oil.
Oil production was 46,100 barrels per day which was nearly 11.0% higher than the year-ago quarter level of 41,500 barrels per day.
Total expenses were $291 million, up 130.9% from $126 million in the year-ago quarter. Excluding the gain on sales of assets and divestment of transportation contracts, the total expenses in the reported quarter was up only 0.6%.
Interest expenses in the reported quarter were $47 million, down 17.5% from $57 million in the year-ago quarter.
WPX Energy, Inc. Price, Consensus and EPS Surprise
WPX Energy, Inc. Price, Consensus and EPS Surprise | WPX Energy, Inc. Quote
Realized Prices & Hedges
Realized oil prices in the quarter were $45.31 per barrel, up 76.8% from the year-ago quarter.
Realized natural gas prices were $2.51 per thousand cubic feet (Mcf), up 65.1%. Realized prices for natural gas liquids were up 192.1% to $20.85 per barrel.
For the rest of 2017, the company has 39,392 barrels per day of oil hedged at a weighted average price of $50.84 per barrel. Further, WPX Energy has 170,000 million British thermal unit (MMBtu) per day of natural gas hedged at a weighted average price of $3.02 per MMBtu.
For 2018, WPX Energy has 42,000 barrels per day of oil hedged at a weighted average price of $54.36 per barrel. The company also has 185,000 MMBtu per day of natural gas hedged at a weighted average price of $2.98 per MMBtu.
Financial Update
WPX Energy had $142 million of cash and cash equivalents as of Mar 31, 2017, compared with $496 million at the end of 2016.
Long-term debt as of Mar 31, 2017 was $2,575 million, flat with the 2016 end levels.
Net cash from operating activities in the first quarter was $22 million compared with $19 million in the same period a year ago. Capital expenditure in the quarter was $237 million compared with $185 million in the year-ago period.
Guidance
For 2017, WPX Energy has a capital budget of $905–$985 million. More than half of the capital is targeted for development in the Delaware Basin.
The company reiterated 2017 total production of 103–113 thousand barrels of oil equivalents per day (MBoe/d), including 52–56 thousand barrels per day (Mbbl/d). Projected 2017 oil volumes represent 30% growth from 2016 levels.
Our View
WPX Energy's first-quarter performance was better than expected due strong production from its oil assets and substantial recovery in the commodity prices.
The company continues to work on its strategy of increasing oil production, which is evident from the rising liquid mix in total production. The two acquisitions closed in Delaware Basin during the first quarter will help the company further increase its oil production.
We believe WPX Energy's exposure in the Delaware, Williston and San Juan basins will enable it to achieve its goal of 30% higher oil generation in 2017 from 2016 levels.
WPX Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Anadarko Petroleum Corp. reported first-quarter 2017 adjusted loss of 60 cents per share, wider than the Zacks Consensus Estimate of a loss of 26 cents.
Devon Energy Corp. (DVN - Free Report) reported first-quarter 2017 adjusted earnings per share of 41 cents, beating the Zacks Consensus Estimate of 40 cents by a penny.
Noble Energy, Inc. reported adjusted loss of 5 cents per share for the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 13 cents.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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