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Decoding Shale Oil Earnings: The Good, the Bad and the Ugly
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It's earnings season, and a bevy of shale oil companies just put in their reports.reported profits that jumped in the first quarter compared with the same period a year ago, aided by the rise in oil prices in recent months. At the same time, most of the players fell on the results.
In this writeup, we dive into the results from Matador Resources Company (MTDR - Free Report) , Continental Resources, Inc. , Pioneer Natural Resources Company (PXD - Free Report) , Anadarko Petroleum Corporation , Concho Resources Inc. and EOG Resources, Inc. (EOG - Free Report) .
MTDR
Matador Resources is an independent oil and natural gas exploration and production company with focus on shale plays in the Eagle Ford and Permian basins.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of 36 cents, ahead of the Zacks Consensus Estimate of 32 cents and the year-ago profit of 17 cents. Total revenues at the Dallas, TX-based energy explorer was $191.2 million, up nearly 42% from a year ago and beating the Zacks Consensus Estimate of $169 million. The outperformances were driven by strong production and pricing gains.
Production: The production of oil and natural gas averaged a record 45,273 oil-equivalent barrels per day (BOE/d) (58% oil), up 37.2% from last year. Results were also above the Zacks Consensus Estimate of 43,690 BOE/d.
Realized Prices: Realized oil prices were 5.4% better than expected at $62.20 per barrel. Matador Resources sold natural gas at $3.33 per thousand cubic feet(Mcf) as against our projection of $3.31 per Mcf.
Guidance: Matador Resources expects its average daily production to increase approximately 3-4% sequentially in the second quarter.
Share Price Impact: The company's shares fell more than 5% as investors looked past the solid results to focus more on the capital expenditure of $170.5 million, which they thought to be on the higher side.
CLR
Continental Resources is an independent oil and gas company with principal operations in the STACK & SCOOP plays in central Oklahoma and the Bakken/Three Forks formations of North Dakota and Montana.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of 68 cents, ahead of the Zacks Consensus Estimate of 60 cents and the year-ago profit of 2 cents. Total revenues at the Oklahoma City, OK-based energy explorer were $1,141 million, up 66.5% from a year ago and beating the Zacks Consensus Estimate of $1,085 million. The outperformances were driven by strong production and crude pricing gains.
Production: The production of oil and natural gas averaged 287,410 BOE/d (57% oil), up 34.5% from last year. While overall volumes were in line with the Zacks Consensus Estimate, oil production – at 163,837 barrels per day – came in 2.5% lower than expected.
Realized Prices: Realized oil prices were 3.5% better than expected at $58.98 per barrel. Continental Resources sold natural gas at $2.98 per Mcf as against our projection of $3.19 per Mcf.
Guidance: Continental Resources expects its second-quarter average daily production to be in the range of 285,000 to 290,000 BOE/d, essentially flat with the previous two quarters.
Share Price Impact: The company's shares fell 2.7% with the main culprits being the crude production miss and lower-than-expected second-quarter guidance.
PXD
Pioneer Natural Resources is a large independent oil and gas exploration and production company with focus on the Spraberry field in the Permian Basin and the Eagle Ford Shale in South Texas.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of $1.66, ahead of the Zacks Consensus Estimate of $1.51 and the year-ago profit of 25 cents. Total revenues at the Irving, TX-based energy explorer was $2,150 million, up 65.4% from a year ago and beating the Zacks Consensus Estimate of $1,802 million. The outperformances were driven by strong production and pricing gains.
Production: The production of oil and natural gas averaged 311,845 BOE/d (80% liquids), up 25.3% from last year. Results were also above the Zacks Consensus Estimate of 304,000 BOE/d.
Realized Prices: On an oil equivalent basis, average realized price was $45.11 per barrel in the reported quarter, compared with $36.14 a year ago, surpassing the Zacks Consensus Estimate of $41.75.
Guidance: Pioneer Natural expects production between 312,000 BOE/d and 322,000 BOE/d in the second quarter of 2018.
Share Price Impact: The company's shares fell more than 3% as its capital expenditure outlook disappointed. The company said that it expects this year's expected capital budget of $2.9 billion to likely go up.
APC
Anadarko Petroleum is one of the world's largest independent oil and gas exploration and production companies with assets in onshore resource plays in the Rocky Mountain region, the southern United States, and the Appalachian basin.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of 52 cents, ahead of the Zacks Consensus Estimate of 43 cents. In the year-ago quarter, The Woodlands, TX-based company had incurred a loss of 60 cents. In the reported quarter, Anadarko Petroleum’s revenues of $3,045 million surpassed the Zacks Consensus Estimate of $2,979 million by 2.9%. The outperformances were driven by higher-than-expected production and realized oil prices. However, revenues were down 19.2% year over year.
Production: The production of oil and natural gas averaged 643,000 BOE/d (73% liquids), down 19.1% from last year. However, results were above the Zacks Consensus Estimate of 631,000 BOE/d.
Realized Prices: Average realized crude price was $63.66 per barrel in the reported quarter, compared with $50.34 a year ago, surpassing the Zacks Consensus Estimate of $60.
Guidance: Anadarko Petroleum expects its second-quarter average daily production to fall sequentially, projecting it to be in the range of 615,000 to 640,000 BOE/d.
Share Price Impact: The company's shares fell around 2.6% as investors were spooked by the weak production guidance. A $100 million hike in 2018 capital budget also played spoilsport.
CXO
Concho Resources is an independent oil and gas exploration and production company with producing properties mainly in the Permian Basin of southeast New Mexico and west Texas.
Earnings & Revenues: The company reported adjusted net earnings per share of $1.00, comfortably beating the Zacks Consensus Estimate of 81 cents. The bottom line also improved significantly from the prior-year quarter’s adjusted income of 49 cents per share. Total operating revenues for the first quarter amounted to $947 million, which increased substantially from $612 million a year ago. The top line at the Midland, TX-based energy explorer further surpassed the Zacks Consensus Estimate of $804 million. The outperformances came on the back of higher commodity-price realizations and robust production growth.
Production: The production of oil and natural gas averaged 227,930 BOE/d (63% oil), up 25.7% from last year. Results were also above the Zacks Consensus Estimate of 218,149 BOE/d.
Realized Prices: Average realized crude price was $61.29 per barrel in the reported quarter, compared with $49.08 a year ago, surpassing the Zacks Consensus Estimate of $59.
Guidance: Concho Resources expects production between 226,000 BOE/d and 230,000 BOE/d in the second quarter of 2018.
Share Price Impact: The company's shares rose around 0.3% on a very strong quarter all-around. Investors were also impressed by the company's updated production outlook for 2018. Concho Resources now expects output to grow 18%-20% against the prior guidance of 16-20%.
EOG
EOG Resources is an oil and gas exploration and production company with focus on the key Texas and Oklahoma basins and the Rocky Mountains in the U.S., and Canada.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of $1.19, ahead of the Zacks Consensus Estimate of $1.01 and the year-ago profit of 15 cents. Total revenues at the Houston, TX-based energy explorer was $3,681.2 million, up 41% from a year ago and beating the Zacks Consensus Estimate of $3,458 million. The outperformances were supported by increased production as well as higher price realizations.
Production: The production of oil and natural gas averaged 659,900 BOE/d (70% liquids), up 15.6% from last year. Results were also above the Zacks Consensus Estimate of 653,000 BOE/d.
Realized Prices: Average realized crude oil and condensate price was $64.27 per barrel in the reported quarter, compared with $50.34 a year ago, surpassing the Zacks Consensus Estimate of $61.
Guidance: EOG Resources expects production between 670,300 BOE/d and 706,200 BOE/d in the second quarter of 2018.
Share Price Impact: The company's shares fell around 1.7% on higher-than-expected first-quarter capital expenditure, which came at around $1,500 million. EOG Resources' second-quarter oil production guidance of 374,400-388,600 barrels per day were also slightly short of expectations.
Want to Own a Shale Stock Now?
All the above-mentioned companies currently retain a Zacks Rank #3 (Hold).
If you are looking for a near-term shale energy play, Wildhorse Resource Development Corporation may be an excellent selection. This company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Wildhorse is a company focused on the acquisition, development, exploration and operation of unconventional, onshore oil and gas properties in the northeastern end of the Eagle Ford Play in South Texas. The 2018 Zacks Consensus Estimate for this Houston, TX-based company is $1.67, representing some 288.4% earnings per share growth over 2017. Next year’s average forecast is $2.19, pointing to another 31.4% growth.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Decoding Shale Oil Earnings: The Good, the Bad and the Ugly
It's earnings season, and a bevy of shale oil companies just put in their reports.reported profits that jumped in the first quarter compared with the same period a year ago, aided by the rise in oil prices in recent months. At the same time, most of the players fell on the results.
In this writeup, we dive into the results from Matador Resources Company (MTDR - Free Report) , Continental Resources, Inc. , Pioneer Natural Resources Company (PXD - Free Report) , Anadarko Petroleum Corporation , Concho Resources Inc. and EOG Resources, Inc. (EOG - Free Report) .
MTDR
Matador Resources is an independent oil and natural gas exploration and production company with focus on shale plays in the Eagle Ford and Permian basins.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of 36 cents, ahead of the Zacks Consensus Estimate of 32 cents and the year-ago profit of 17 cents. Total revenues at the Dallas, TX-based energy explorer was $191.2 million, up nearly 42% from a year ago and beating the Zacks Consensus Estimate of $169 million. The outperformances were driven by strong production and pricing gains.
Production: The production of oil and natural gas averaged a record 45,273 oil-equivalent barrels per day (BOE/d) (58% oil), up 37.2% from last year. Results were also above the Zacks Consensus Estimate of 43,690 BOE/d.
Realized Prices: Realized oil prices were 5.4% better than expected at $62.20 per barrel. Matador Resources sold natural gas at $3.33 per thousand cubic feet(Mcf) as against our projection of $3.31 per Mcf.
Guidance: Matador Resources expects its average daily production to increase approximately 3-4% sequentially in the second quarter.
Share Price Impact: The company's shares fell more than 5% as investors looked past the solid results to focus more on the capital expenditure of $170.5 million, which they thought to be on the higher side.
CLR
Continental Resources is an independent oil and gas company with principal operations in the STACK & SCOOP plays in central Oklahoma and the Bakken/Three Forks formations of North Dakota and Montana.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of 68 cents, ahead of the Zacks Consensus Estimate of 60 cents and the year-ago profit of 2 cents. Total revenues at the Oklahoma City, OK-based energy explorer were $1,141 million, up 66.5% from a year ago and beating the Zacks Consensus Estimate of $1,085 million. The outperformances were driven by strong production and crude pricing gains.
Production: The production of oil and natural gas averaged 287,410 BOE/d (57% oil), up 34.5% from last year. While overall volumes were in line with the Zacks Consensus Estimate, oil production – at 163,837 barrels per day – came in 2.5% lower than expected.
Realized Prices: Realized oil prices were 3.5% better than expected at $58.98 per barrel. Continental Resources sold natural gas at $2.98 per Mcf as against our projection of $3.19 per Mcf.
Guidance: Continental Resources expects its second-quarter average daily production to be in the range of 285,000 to 290,000 BOE/d, essentially flat with the previous two quarters.
Share Price Impact: The company's shares fell 2.7% with the main culprits being the crude production miss and lower-than-expected second-quarter guidance.
PXD
Pioneer Natural Resources is a large independent oil and gas exploration and production company with focus on the Spraberry field in the Permian Basin and the Eagle Ford Shale in South Texas.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of $1.66, ahead of the Zacks Consensus Estimate of $1.51 and the year-ago profit of 25 cents. Total revenues at the Irving, TX-based energy explorer was $2,150 million, up 65.4% from a year ago and beating the Zacks Consensus Estimate of $1,802 million. The outperformances were driven by strong production and pricing gains.
Production: The production of oil and natural gas averaged 311,845 BOE/d (80% liquids), up 25.3% from last year. Results were also above the Zacks Consensus Estimate of 304,000 BOE/d.
Realized Prices: On an oil equivalent basis, average realized price was $45.11 per barrel in the reported quarter, compared with $36.14 a year ago, surpassing the Zacks Consensus Estimate of $41.75.
Guidance: Pioneer Natural expects production between 312,000 BOE/d and 322,000 BOE/d in the second quarter of 2018.
Share Price Impact: The company's shares fell more than 3% as its capital expenditure outlook disappointed. The company said that it expects this year's expected capital budget of $2.9 billion to likely go up.
APC
Anadarko Petroleum is one of the world's largest independent oil and gas exploration and production companies with assets in onshore resource plays in the Rocky Mountain region, the southern United States, and the Appalachian basin.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of 52 cents, ahead of the Zacks Consensus Estimate of 43 cents. In the year-ago quarter, The Woodlands, TX-based company had incurred a loss of 60 cents. In the reported quarter, Anadarko Petroleum’s revenues of $3,045 million surpassed the Zacks Consensus Estimate of $2,979 million by 2.9%. The outperformances were driven by higher-than-expected production and realized oil prices. However, revenues were down 19.2% year over year.
Production: The production of oil and natural gas averaged 643,000 BOE/d (73% liquids), down 19.1% from last year. However, results were above the Zacks Consensus Estimate of 631,000 BOE/d.
Realized Prices: Average realized crude price was $63.66 per barrel in the reported quarter, compared with $50.34 a year ago, surpassing the Zacks Consensus Estimate of $60.
Guidance: Anadarko Petroleum expects its second-quarter average daily production to fall sequentially, projecting it to be in the range of 615,000 to 640,000 BOE/d.
Share Price Impact: The company's shares fell around 2.6% as investors were spooked by the weak production guidance. A $100 million hike in 2018 capital budget also played spoilsport.
CXO
Concho Resources is an independent oil and gas exploration and production company with producing properties mainly in the Permian Basin of southeast New Mexico and west Texas.
Earnings & Revenues: The company reported adjusted net earnings per share of $1.00, comfortably beating the Zacks Consensus Estimate of 81 cents. The bottom line also improved significantly from the prior-year quarter’s adjusted income of 49 cents per share. Total operating revenues for the first quarter amounted to $947 million, which increased substantially from $612 million a year ago. The top line at the Midland, TX-based energy explorer further surpassed the Zacks Consensus Estimate of $804 million. The outperformances came on the back of higher commodity-price realizations and robust production growth.
Production: The production of oil and natural gas averaged 227,930 BOE/d (63% oil), up 25.7% from last year. Results were also above the Zacks Consensus Estimate of 218,149 BOE/d.
Realized Prices: Average realized crude price was $61.29 per barrel in the reported quarter, compared with $49.08 a year ago, surpassing the Zacks Consensus Estimate of $59.
Guidance: Concho Resources expects production between 226,000 BOE/d and 230,000 BOE/d in the second quarter of 2018.
Share Price Impact: The company's shares rose around 0.3% on a very strong quarter all-around. Investors were also impressed by the company's updated production outlook for 2018. Concho Resources now expects output to grow 18%-20% against the prior guidance of 16-20%.
EOG
EOG Resources is an oil and gas exploration and production company with focus on the key Texas and Oklahoma basins and the Rocky Mountains in the U.S., and Canada.
Earnings & Revenues: The company reported first-quarter adjusted earnings per share of $1.19, ahead of the Zacks Consensus Estimate of $1.01 and the year-ago profit of 15 cents. Total revenues at the Houston, TX-based energy explorer was $3,681.2 million, up 41% from a year ago and beating the Zacks Consensus Estimate of $3,458 million. The outperformances were supported by increased production as well as higher price realizations.
Production: The production of oil and natural gas averaged 659,900 BOE/d (70% liquids), up 15.6% from last year. Results were also above the Zacks Consensus Estimate of 653,000 BOE/d.
Realized Prices: Average realized crude oil and condensate price was $64.27 per barrel in the reported quarter, compared with $50.34 a year ago, surpassing the Zacks Consensus Estimate of $61.
Guidance: EOG Resources expects production between 670,300 BOE/d and 706,200 BOE/d in the second quarter of 2018.
Share Price Impact: The company's shares fell around 1.7% on higher-than-expected first-quarter capital expenditure, which came at around $1,500 million. EOG Resources' second-quarter oil production guidance of 374,400-388,600 barrels per day were also slightly short of expectations.
Want to Own a Shale Stock Now?
All the above-mentioned companies currently retain a Zacks Rank #3 (Hold).
If you are looking for a near-term shale energy play, Wildhorse Resource Development Corporation may be an excellent selection. This company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Wildhorse is a company focused on the acquisition, development, exploration and operation of unconventional, onshore oil and gas properties in the northeastern end of the Eagle Ford Play in South Texas. The 2018 Zacks Consensus Estimate for this Houston, TX-based company is $1.67, representing some 288.4% earnings per share growth over 2017. Next year’s average forecast is $2.19, pointing to another 31.4% growth.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>