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Wider-than-Expected Loss at WPX Energy
WPX SM AXAS
Independent oil & gas operator
WPX Energy Inc. ( WPX - Analyst Report) reported an operating loss of 41 cents in the third quarter, much wider than the Zacks Consensus Estimate of 19 cents.
In fact, the operating loss of the company was also wider than the 23 cents incurred in the comparable year-ago quarter. The year-over-year performance was impacted by a decline in total production volumes. This was compounded by an increase in operating costs.
On a GAAP basis, the company reported a loss of 57 cents per share versus a loss of 33 cents in the year-ago quarter. The difference of 16 cents between the GAAP and operating number in the reported quarter was due to a one-time after tax impact of asset impairments, accruals for litigations and unrealized mark-to-market losses. Total Revenue
WPX Energy’s quarterly revenues of $658 million marginally lagged the Zacks Consensus Estimate of $661 million by 0.5% and year-ago revenues by 2.8%.
Revenues were lower year over year primarily due to a 4.3% decline in total products revenue and a 5.4% decline in gas management revenues. Highlight of the Release
Total average daily production in third quarter 2013 was 1,267 million cubic feet equivalent per day (MMcfe), down 7.0% from 1,359 MMcfe in the year-ago quarter. Oil production in the reported quarter went up, while natural gas and NGL production trended down.
Total expenses in the reported quarter were $784 million, up 4.3% from the year-ago level.
Interest expenses in the reported quarter were $28 million increasing 12% from the year-ago quarter in the wake of a higher debt level. Financial Update
WPX Energy exited the quarter with $58 million of unrestricted domestic cash and cash equivalents and $50 million of international cash. The cash balance was lower than the 2012 end level of $153 million.
Net cash from operating activities in the first nine months of 2013 was $518 million versus $589 million in the first nine months of 2012.
Capital expenditure of the company during the third quarter was $295 million versus $337 million in the year-ago quarter. WPX Energy expects to invest $1.2 billion in 2013 to improve and expand its existing operations.
Long-term debt as of Sep 30, 2013 was $1,776 million versus $1,508 million as of Dec 31, 2012. Other Company Releases Goodrich Petroleum Corp. posted a loss of 54 cents per share in third quarter 2013, narrower than the Zacks Consensus Estimate of 69 cents. SM Energy Company’s ( SM - Analyst Report) third-quarter 2013 adjusted earnings of $1.54 per share surpassed the Zacks Consensus Estimate of $1.09. Abraxas Petroleum Corp.’s ( AXAS - Snapshot Report) third-quarter 2013 adjusted earnings of 9 cents beat the Zacks Consensus Estimate of 4 cents. Our View
WPX Energy continues to report in the red falling behind our consensus.
The approach taken by WPX Energy in Niobrara Shale and Gallup Oil is commendable. However, these initiatives are not enough to turn around the company’s bottom line.
WPX Energy currently retains a Zacks Rank #3 (Hold). With a market cap of $3.75 billion, the company has 1,200 full time employees.