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Shale Q3 Earnings Scorecard: Things Investors Need to Know
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With the third-quarter earnings season over, it’s time to sit back and analyze the bevy of shale bigwigs just put in their reports. All of them reported profits that jumped in the third quarter compared to the same period a year before, aided along by higher oil prices and strong production growth. All but one of the companies also managed to beat the Zacks Consensus Estimate. At the same time, a number of them fell on the results, reflecting increased capital expenditure announcements.
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) , Diamondback Energy, Inc. (FANG - 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 & Revenue: The company reported third-quarter adjusted earnings per share of 48 cents, ahead of the Zacks Consensus Estimate of 37 cents and the year-ago profit of 18 cents. The outperformances were driven by strong production and natural gas pricing gains.
Total revenues at the Dallas, TX-based energy explorer was $207.2 million, up more than 64% from a year ago. However, sales marginally lagged the Zacks Consensus Estimate of $208 million due to derivative losses.
Production: The production of oil and natural gas averaged a record 54,625 oil-equivalent barrels per day (BOE/d) (59% oil), up 30% from last year. Results were also above the Zacks Consensus Estimate of 52,384 BOE/d.
Realized Prices: Realized oil prices were slightly lower than expected at $57.15 per barrel. Matador Resources sold natural gas at $3.77 per thousand cubic feet (Mcf) as against our projection of $3.28 per Mcf.
Guidance: Matador Resources expects its average daily production to remain sequentially flat in the fourth quarter.
Share Price Impact: The company's shares were largely unmoved as the increase in its 2018 production guidance was offset by the higher capital spending projection.
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 & Revenue: The company reported third-quarter adjusted earnings per share of 90 cents, ahead of the Zacks Consensus Estimate of 81 cents and the year-ago quarter’s earnings of just 9 cents. The outperformances were driven by higher natural gas price realizations and increased production from the North Dakota Bakken, as well as SCOOP and STACK regions.
Total revenues at the Oklahoma City, OK-based energy explorer was $1.3 billion, up 76% from a year ago and beat the Zacks Consensus Estimate of $1.2 billion.
Production: The production of oil and natural gas averaged 296,904 BOE/d (55% oil), up 22% from last year. While overall volumes were above the Zacks Consensus Estimate, oil production – at 164,605 barrels per day – came in slightly lower than expected.
Realized Prices: At $65.78 per barrel, realized oil prices were essentially in line with the Zacks Consensus Estimate. Continental Resources sold natural gas at $3.12 per Mcf as against our projection of $2.98 per Mcf.
Guidance: Continental Resources expects its fourth-quarter average daily production exit rate to be in the range of 315,000 to 325,000 BOE/d.
Share Price Impact: The company's shares fell almost 2% with the main culprits being the oil production miss and the lofty third quarter capital expenditure of $790.8 million.
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 & Revenue: The company reported third-quarter adjusted earnings per share of $2.07, beating the Zacks Consensus Estimate of $1.69 and significantly ahead of the year-ago profit of 48 cents, driven by strong production and pricing gains.
Total revenues at the Irving, TX-based energy explorer was $2.5 billion, more than doubling from a year ago and ahead of the Zacks Consensus Estimate of $2.3 billion.
Production: The production of oil and natural gas averaged 320,659 BOE/d (80% liquids), up 16% from last year. Results were also above the Zacks Consensus Estimate of 318,000 BOE/d.
Realized Prices: On an oil equivalent basis, average realized price was $44.64 per barrel in the reported quarter, compared with $33.72 a year ago. However, realizations failed to match the Zacks Consensus Estimate of $46.68.
Guidance: Pioneer Natural, which plans to operate exclusively in the Permian Basin and is in the process of selling its other assets, expects Permian production between 293,000 BOE/d and 303,000 BOE/d in the fourth quarter of 2018.
Share Price Impact: The company's shares surged more than 9% following the quarter’s better-than-forecasted results. Apart from strong volumes, investors welcomed Pioneer Natural’s comments about being free cash flow positive in 2019 and the anticipated ROCE in excess of 10% this year.
FANG
Diamondback Energy focuses on growth through a combination of acquisitions and active drilling in the lucrative Permian Basin spread over west Texas and New Mexico.
Earnings & Revenue: The company reported third-quarter adjusted earnings per share of $1.67, ahead of the Zacks Consensus Estimate of $1.52 and the year-ago profit of $1.33. The outperformances were driven by strong production.
Total revenues at the Midland, TX-based energy explorer was $538 million, coming above the Zacks Consensus Estimate of $524 million and increasing 78.6% year over year.
Production: The production of oil and natural gas averaged 122,975 BOE/d (72% oil), up 45% from last year. Results were also above the Zacks Consensus Estimate of 120,984 BOE/d.
Realized Prices: Average realized crude price was $55.99 per barrel in the reported quarter, compared with $45.62 a year ago. However, oil realizations failed to match the Zacks Consensus Estimate of $59.
Guidance: Diamondback expects its 2018 output to represent annualized production growth of 50% at the midpoint.
Share Price Impact: The company's shares were largely unmoved as the increase in its full-year production forecast was offset by the higher capital spending projection.
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 & Revenue: The company reported third-quarter adjusted earnings per share of 82 cents, lagging the Zacks Consensus Estimate of 88 cents on higher depreciation expenses. However, The Woodlands, TX-based company turned around from the year-ago loss of 77 cents on higher-than-expected production and strength in oil prices.
In the reported quarter, Anadarko Petroleum’s revenues of $3.7 billion surpassed the Zacks Consensus Estimate of $3.5 billion and was 48% above the third-quarter 2017 sales.
Production: The production of oil and natural gas averaged 682,000 BOE/d (74% liquids), up from last year’s 626,000 BOE/d and just above the Zacks Consensus Estimate of 681,000 BOE/d.
Realized Prices: Average realized crude price was $70.37 per barrel in the reported quarter, compared with $48.31 a year ago, in line with the Zacks Consensus Estimate.
Guidance: Anadarko Petroleum expects its fourth-quarter average daily production tobe in the range of 674,000 to 728,000 BOE/d.
Share Price Impact: The company's shares lost around 5% as investors were spooked by the higher-than-anticipated costs associated with the Powder River Basin acquisitions and slightly below-consensus production guidance for the fourth quarter.
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 & Revenue: The company reported adjusted net earnings per share of $1.42, comfortably beating the Zacks Consensus Estimate of $1.13. The bottom line also improved significantly from the prior-year quarter’s adjusted income of 45 cents per share. The outperformances came on the back of higher commodity-price realizations and robust production growth.
Total operating revenues for the third quarter amounted to $1.2 billion, which increased substantially from $627 million a year ago. The top line at the Midland, TX-based energy explorer further surpassed the Zacks Consensus Estimate of $1.1 billion.
Production: The production of oil and natural gas averaged 286,634 BOE/d (64% oil), up 48% from last year. Moreover, volumes were also above the Zacks Consensus Estimate of 284,344 BOE/d.
Realized Prices: Average realized crude price was $56.38 per barrel in the reported quarter, compared with $45.29 a year ago, surpassing the Zacks Consensus Estimate of $48.26.
Guidance: Concho Resources expects production between 305,000 BOE/d and 310,000 BOE/d in the fourth quarter of 2018.
Share Price Impact: Following the comfortable headline beats, the company's shares surged more than 6%. Apart from the production numbers coming in above expectations, investors were also impressed by the company's dividend initiation plans and cost efficiencies.
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 & Revenue: The company reported third-quarter adjusted earnings per share of $1.75, ahead of the Zacks Consensus Estimate of $1.56 and improved significantly from the year-ago quarter’s 19 cents. The outperformances were supported by increased production as well as higher oil and gas price realizations.
Total revenues at the Houston, TX-based energy explorer was $4.8 billion, up 81% from a year ago and beating the Zacks Consensus Estimate of $4.6 billion.
Production: The production of oil and natural gas averaged 748,800 BOE/d (72% liquids), up 25% from last year. Results were also above the Zacks Consensus Estimate of 736,000 BOE/d.
Realized Prices: Average realized crude oil and condensate price was $69.55 per barrel in the reported quarter, compared with $48.11 a year ago, surpassing the Zacks Consensus Estimate of $68.
Guidance: EOG Resources expects production between 747,700 BOE/d and 779,900 BOE/d in the fourth quarter of 2018.
Share Price Impact: The company's shares fell around 3% on higher-than-expected third-quarter capital expenditure, which came at around $1.7 billion. This also drove a $300 million increase in EOG Resources' full-year capital spending guidance.
Want to Own a Shale Stock Now?
Among the stocks mentioned here, Concho Resources may be a good selection. This company has a Zacks Rank #2 (Buy).
Concho has a 100% track of outperforming estimates over the last four quarters at an average rate of 31.9%. On top of that, the company’s expected EPS growth rate for three to five years currently stands at 29%, comparing favorably with the industry's growth rate of 16.6%.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Shale Q3 Earnings Scorecard: Things Investors Need to Know
With the third-quarter earnings season over, it’s time to sit back and analyze the bevy of shale bigwigs just put in their reports. All of them reported profits that jumped in the third quarter compared to the same period a year before, aided along by higher oil prices and strong production growth. All but one of the companies also managed to beat the Zacks Consensus Estimate. At the same time, a number of them fell on the results, reflecting increased capital expenditure announcements.
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) , Diamondback Energy, Inc. (FANG - 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 & Revenue: The company reported third-quarter adjusted earnings per share of 48 cents, ahead of the Zacks Consensus Estimate of 37 cents and the year-ago profit of 18 cents. The outperformances were driven by strong production and natural gas pricing gains.
Total revenues at the Dallas, TX-based energy explorer was $207.2 million, up more than 64% from a year ago. However, sales marginally lagged the Zacks Consensus Estimate of $208 million due to derivative losses.
Production: The production of oil and natural gas averaged a record 54,625 oil-equivalent barrels per day (BOE/d) (59% oil), up 30% from last year. Results were also above the Zacks Consensus Estimate of 52,384 BOE/d.
Realized Prices: Realized oil prices were slightly lower than expected at $57.15 per barrel. Matador Resources sold natural gas at $3.77 per thousand cubic feet (Mcf) as against our projection of $3.28 per Mcf.
Guidance: Matador Resources expects its average daily production to remain sequentially flat in the fourth quarter.
Share Price Impact: The company's shares were largely unmoved as the increase in its 2018 production guidance was offset by the higher capital spending projection.
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 & Revenue: The company reported third-quarter adjusted earnings per share of 90 cents, ahead of the Zacks Consensus Estimate of 81 cents and the year-ago quarter’s earnings of just 9 cents. The outperformances were driven by higher natural gas price realizations and increased production from the North Dakota Bakken, as well as SCOOP and STACK regions.
Total revenues at the Oklahoma City, OK-based energy explorer was $1.3 billion, up 76% from a year ago and beat the Zacks Consensus Estimate of $1.2 billion.
Production: The production of oil and natural gas averaged 296,904 BOE/d (55% oil), up 22% from last year. While overall volumes were above the Zacks Consensus Estimate, oil production – at 164,605 barrels per day – came in slightly lower than expected.
Realized Prices: At $65.78 per barrel, realized oil prices were essentially in line with the Zacks Consensus Estimate. Continental Resources sold natural gas at $3.12 per Mcf as against our projection of $2.98 per Mcf.
Guidance: Continental Resources expects its fourth-quarter average daily production exit rate to be in the range of 315,000 to 325,000 BOE/d.
Share Price Impact: The company's shares fell almost 2% with the main culprits being the oil production miss and the lofty third quarter capital expenditure of $790.8 million.
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 & Revenue: The company reported third-quarter adjusted earnings per share of $2.07, beating the Zacks Consensus Estimate of $1.69 and significantly ahead of the year-ago profit of 48 cents, driven by strong production and pricing gains.
Total revenues at the Irving, TX-based energy explorer was $2.5 billion, more than doubling from a year ago and ahead of the Zacks Consensus Estimate of $2.3 billion.
Production: The production of oil and natural gas averaged 320,659 BOE/d (80% liquids), up 16% from last year. Results were also above the Zacks Consensus Estimate of 318,000 BOE/d.
Realized Prices: On an oil equivalent basis, average realized price was $44.64 per barrel in the reported quarter, compared with $33.72 a year ago. However, realizations failed to match the Zacks Consensus Estimate of $46.68.
Guidance: Pioneer Natural, which plans to operate exclusively in the Permian Basin and is in the process of selling its other assets, expects Permian production between 293,000 BOE/d and 303,000 BOE/d in the fourth quarter of 2018.
Share Price Impact: The company's shares surged more than 9% following the quarter’s better-than-forecasted results. Apart from strong volumes, investors welcomed Pioneer Natural’s comments about being free cash flow positive in 2019 and the anticipated ROCE in excess of 10% this year.
FANG
Diamondback Energy focuses on growth through a combination of acquisitions and active drilling in the lucrative Permian Basin spread over west Texas and New Mexico.
Earnings & Revenue: The company reported third-quarter adjusted earnings per share of $1.67, ahead of the Zacks Consensus Estimate of $1.52 and the year-ago profit of $1.33. The outperformances were driven by strong production.
Total revenues at the Midland, TX-based energy explorer was $538 million, coming above the Zacks Consensus Estimate of $524 million and increasing 78.6% year over year.
Production: The production of oil and natural gas averaged 122,975 BOE/d (72% oil), up 45% from last year. Results were also above the Zacks Consensus Estimate of 120,984 BOE/d.
Realized Prices: Average realized crude price was $55.99 per barrel in the reported quarter, compared with $45.62 a year ago. However, oil realizations failed to match the Zacks Consensus Estimate of $59.
Guidance: Diamondback expects its 2018 output to represent annualized production growth of 50% at the midpoint.
Share Price Impact: The company's shares were largely unmoved as the increase in its full-year production forecast was offset by the higher capital spending projection.
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 & Revenue: The company reported third-quarter adjusted earnings per share of 82 cents, lagging the Zacks Consensus Estimate of 88 cents on higher depreciation expenses. However, The Woodlands, TX-based company turned around from the year-ago loss of 77 cents on higher-than-expected production and strength in oil prices.
In the reported quarter, Anadarko Petroleum’s revenues of $3.7 billion surpassed the Zacks Consensus Estimate of $3.5 billion and was 48% above the third-quarter 2017 sales.
Production: The production of oil and natural gas averaged 682,000 BOE/d (74% liquids), up from last year’s 626,000 BOE/d and just above the Zacks Consensus Estimate of 681,000 BOE/d.
Realized Prices: Average realized crude price was $70.37 per barrel in the reported quarter, compared with $48.31 a year ago, in line with the Zacks Consensus Estimate.
Guidance: Anadarko Petroleum expects its fourth-quarter average daily production tobe in the range of 674,000 to 728,000 BOE/d.
Share Price Impact: The company's shares lost around 5% as investors were spooked by the higher-than-anticipated costs associated with the Powder River Basin acquisitions and slightly below-consensus production guidance for the fourth quarter.
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 & Revenue: The company reported adjusted net earnings per share of $1.42, comfortably beating the Zacks Consensus Estimate of $1.13. The bottom line also improved significantly from the prior-year quarter’s adjusted income of 45 cents per share. The outperformances came on the back of higher commodity-price realizations and robust production growth.
Total operating revenues for the third quarter amounted to $1.2 billion, which increased substantially from $627 million a year ago. The top line at the Midland, TX-based energy explorer further surpassed the Zacks Consensus Estimate of $1.1 billion.
Production: The production of oil and natural gas averaged 286,634 BOE/d (64% oil), up 48% from last year. Moreover, volumes were also above the Zacks Consensus Estimate of 284,344 BOE/d.
Realized Prices: Average realized crude price was $56.38 per barrel in the reported quarter, compared with $45.29 a year ago, surpassing the Zacks Consensus Estimate of $48.26.
Guidance: Concho Resources expects production between 305,000 BOE/d and 310,000 BOE/d in the fourth quarter of 2018.
Share Price Impact: Following the comfortable headline beats, the company's shares surged more than 6%. Apart from the production numbers coming in above expectations, investors were also impressed by the company's dividend initiation plans and cost efficiencies.
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 & Revenue: The company reported third-quarter adjusted earnings per share of $1.75, ahead of the Zacks Consensus Estimate of $1.56 and improved significantly from the year-ago quarter’s 19 cents. The outperformances were supported by increased production as well as higher oil and gas price realizations.
Total revenues at the Houston, TX-based energy explorer was $4.8 billion, up 81% from a year ago and beating the Zacks Consensus Estimate of $4.6 billion.
Production: The production of oil and natural gas averaged 748,800 BOE/d (72% liquids), up 25% from last year. Results were also above the Zacks Consensus Estimate of 736,000 BOE/d.
Realized Prices: Average realized crude oil and condensate price was $69.55 per barrel in the reported quarter, compared with $48.11 a year ago, surpassing the Zacks Consensus Estimate of $68.
Guidance: EOG Resources expects production between 747,700 BOE/d and 779,900 BOE/d in the fourth quarter of 2018.
Share Price Impact: The company's shares fell around 3% on higher-than-expected third-quarter capital expenditure, which came at around $1.7 billion. This also drove a $300 million increase in EOG Resources' full-year capital spending guidance.
Want to Own a Shale Stock Now?
Among the stocks mentioned here, Concho Resources may be a good selection. This company has a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Concho has a 100% track of outperforming estimates over the last four quarters at an average rate of 31.9%. On top of that, the company’s expected EPS growth rate for three to five years currently stands at 29%, comparing favorably with the industry's growth rate of 16.6%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>