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QEP Resources' (QEP) Q3 Earnings and Sales Beat, Up Y/Y
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QEP Resources, Inc. recently reported third-quarter 2018 earnings per share — excluding special items — of 17 cents, which surpassed the Zacks Consensus Estimate of a loss of a penny and the prior-year quarter’s loss of 10 cents.
Moreover, quarterly revenues of $560.8 million beat the Zacks Consensus Estimate of $494 million. Sales were also up from the year-ago figure of $390.1 million.
The strong performance can be attributed to higher oil production coupled with a rise in net realized prices of liquids.
QEP Resources, Inc. Price, Consensus and EPS Surprise
Overall third-quarter production of the company came in at 14,400 thousand barrels of oil equivalent (Mboe), up 2% from the year-ago period. While natural gas volumes of 38.1 billion cubic feet fell 18% year over year, natural gas liquid volumes plummeted 7% to 1,415.3 thousand barrels (Mbbl). However, the rise in overall quarterly production is attributed to oil volumes, which increased 38% from the prior-year quarter to 6,640.5 Mbbl (46.1% of total output).
With the company shifting its focus toward Permian Basin (included in its Southern Region assets), equivalent production from the area jumped 104% year over year to 4,792.5 Mboe. Total Southern Region production surged 65% year over year to 9,349.8 Mboe. Production from Northern Region assets fell 40% year over year to 5,050.2 Mboe, primarily due to the divestment of Pinedale properties.
Realized Prices
QEP Resources’ net realized natural gas price in the quarter was $2.76 per thousand cubic feet, down 1% from the year-ago quarter’s $2.79. Net oil price realization improved 18% year over year to $56.38 per barrel. Net NGLs price realization also improved 39% year over year to $29.65 per barrel. Overall net realized equivalent price averaged $36.21 per barrel of oil equivalent, up 30% from the prior-year quarter.
Operating Expenses
Total operating expenses in the quarter decreased to $431.1 million from $443.4 million a year ago. The fall was primarily due to the lack of exploration and impairment costs, which were present in the year-ago period. Lease operating costs, along with transportation and processing expenses also fell from the year-ago period.
Capital Expenditure
Capital investment, excluding acquisitions, decreased nearly 37.8% year over year to $203.7 million in the third quarter, mainly due to a fall in drilling and completion activities in the Permian and Williston basins, along with Haynesville/Cotton Valley.
Balance Sheet
As of Sep 30, 2018, QEP Resources had no cash and cash equivalents. The company’s long-term debt was $2,451.1 million, representing a debt-to-capitalization ratio of 42.1%.
Guidance
For 2018, QEP Resources increased its total oil-equivalent production guidance from 49.8-52.3 million barrels of oil equivalent (MMboe) to 50.8-52.2 MMboe. The company increased its total capital investment guidance from the range of $1,070-$1,170 million to $1,140-$1,190 million, in order to bring additional wells online in the Permian Basin. For the fourth quarter of 2018, it expects equivalent production within 10.6-12 MMboe.
Divestment
Along with the earnings report, the company announced the sale of a portion of its non-Permian assets. QEP Resources continues to make strides to transform into a pure-play Permian player. As part of that goal, the company recently agreed to divest its assets in the Williston Basin for $1,725 million — through a cash-stock deal — to Vantage Acquisition Operating Company, a subsidiary of Vantage Energy Acquisition Corp.
Zacks Rank & Key Picks
Currently, Denver, CO-based QEP Resources has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks given below:
Fort Worth, TX-based Range Resources Corporation (RRC - Free Report) holds a Zacks Rank #2 (Buy). The company’s earnings for 2018 are expected to surge more than 100% year over year.
El Dorado, AR-based Murphy Oil Corporation (MUR - Free Report) carries a Zacks Rank #2. The company’s sales for 2018 are expected to grow more than 20% from 2017.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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QEP Resources' (QEP) Q3 Earnings and Sales Beat, Up Y/Y
QEP Resources, Inc. recently reported third-quarter 2018 earnings per share — excluding special items — of 17 cents, which surpassed the Zacks Consensus Estimate of a loss of a penny and the prior-year quarter’s loss of 10 cents.
Moreover, quarterly revenues of $560.8 million beat the Zacks Consensus Estimate of $494 million. Sales were also up from the year-ago figure of $390.1 million.
The strong performance can be attributed to higher oil production coupled with a rise in net realized prices of liquids.
QEP Resources, Inc. Price, Consensus and EPS Surprise
QEP Resources, Inc. Price, Consensus and EPS Surprise | QEP Resources, Inc. Quote
Volume Analysis
Overall third-quarter production of the company came in at 14,400 thousand barrels of oil equivalent (Mboe), up 2% from the year-ago period. While natural gas volumes of 38.1 billion cubic feet fell 18% year over year, natural gas liquid volumes plummeted 7% to 1,415.3 thousand barrels (Mbbl). However, the rise in overall quarterly production is attributed to oil volumes, which increased 38% from the prior-year quarter to 6,640.5 Mbbl (46.1% of total output).
With the company shifting its focus toward Permian Basin (included in its Southern Region assets), equivalent production from the area jumped 104% year over year to 4,792.5 Mboe. Total Southern Region production surged 65% year over year to 9,349.8 Mboe. Production from Northern Region assets fell 40% year over year to 5,050.2 Mboe, primarily due to the divestment of Pinedale properties.
Realized Prices
QEP Resources’ net realized natural gas price in the quarter was $2.76 per thousand cubic feet, down 1% from the year-ago quarter’s $2.79. Net oil price realization improved 18% year over year to $56.38 per barrel. Net NGLs price realization also improved 39% year over year to $29.65 per barrel. Overall net realized equivalent price averaged $36.21 per barrel of oil equivalent, up 30% from the prior-year quarter.
Operating Expenses
Total operating expenses in the quarter decreased to $431.1 million from $443.4 million a year ago. The fall was primarily due to the lack of exploration and impairment costs, which were present in the year-ago period. Lease operating costs, along with transportation and processing expenses also fell from the year-ago period.
Capital Expenditure
Capital investment, excluding acquisitions, decreased nearly 37.8% year over year to $203.7 million in the third quarter, mainly due to a fall in drilling and completion activities in the Permian and Williston basins, along with Haynesville/Cotton Valley.
Balance Sheet
As of Sep 30, 2018, QEP Resources had no cash and cash equivalents. The company’s long-term debt was $2,451.1 million, representing a debt-to-capitalization ratio of 42.1%.
Guidance
For 2018, QEP Resources increased its total oil-equivalent production guidance from 49.8-52.3 million barrels of oil equivalent (MMboe) to 50.8-52.2 MMboe. The company increased its total capital investment guidance from the range of $1,070-$1,170 million to $1,140-$1,190 million, in order to bring additional wells online in the Permian Basin. For the fourth quarter of 2018, it expects equivalent production within 10.6-12 MMboe.
Divestment
Along with the earnings report, the company announced the sale of a portion of its non-Permian assets. QEP Resources continues to make strides to transform into a pure-play Permian player. As part of that goal, the company recently agreed to divest its assets in the Williston Basin for $1,725 million — through a cash-stock deal — to Vantage Acquisition Operating Company, a subsidiary of Vantage Energy Acquisition Corp.
Zacks Rank & Key Picks
Currently, Denver, CO-based QEP Resources has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks given below:
New York, NY-based Hess Corporation (HES - Free Report) has a Zacks Rank #1 (Strong Buy). Its earnings for 2018 are expected to surge around 100% from the 2017 level. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fort Worth, TX-based Range Resources Corporation (RRC - Free Report) holds a Zacks Rank #2 (Buy). The company’s earnings for 2018 are expected to surge more than 100% year over year.
El Dorado, AR-based Murphy Oil Corporation (MUR - Free Report) carries a Zacks Rank #2. The company’s sales for 2018 are expected to grow more than 20% from 2017.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>