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SM Energy (SM) Q4 Earnings Miss Estimates on Lower Production
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SM Energy Company (SM - Free Report) reported fourth-quarter adjusted earnings of 2 cents per share, missing the Zacks Consensus Estimate of 7 cents. However, the bottom line improved from the year-ago loss of 4 cents per share.
Quarterly revenues of $320 million decreased from $452 million in the year-ago quarter and missed the Zacks Consensus Estimate of $340 million.
The lower-than-expected results can be attributed to a decline in daily oil equivalent production volumes.
SM Energy Company Price, Consensus and EPS Surprise
SM Energy’s fourth-quarter production totaled 122.4 thousand barrels of oil equivalent per day (MBoe/d) (51.4% oil), down 11.8% from the year-ago level of 138.8 MBoe/d.
Oil production decreased 6% year over year to 62.9 thousand barrels per day (MBbls/d). The company produced 275.3 million cubic feet per day of natural gas in the quarter, down 9.9% year over year. Natural gas liquids contributed 13.6 MBbls/d to total production volume, down 33.7% from the fourth-quarter 2019 level.
Realized Prices Decline
Excluding the effects of derivative settlements, the average realized price per Boe was $28.42 compared with $35.17 in the year-ago quarter. Average realized price of natural gas increased 1.7% year over year to $2.46 per thousand cubic feet. Notably, average realized prices of oil decreased 27.7% to $40.54 per barrel and that of natural gas liquids increased 3.3% from the prior-year quarter to $18.43.
Operating Cost & Expenses
On the cost front, unit lease operating expenses decreased 12.2% year over year to $4.10 per Boe. In addition, transportation expenses fell to $2.89 per Boe from $3.46 in the year-ago quarter. Moreover, general and administrative expenses decreased 39% to $1.78 per Boe from the prior-year level of $2.92.
Total exploration expenses were $11.3 million, lower than the year-ago figure of $17.6 million. Hydrocarbon production expenses for the quarter were recorded at $96 million compared with the year-ago level of $127.3 million. Notably, total operating expenses for the quarter decreased to $492.3 million from the year-ago period’s $540 million.
Capex
Capital expenditure for the fourth quarter was recorded at $128 million, lower than the year-ago figure of $235.1 million. This was due to lower drilling costs per lateral foot and the postponement of five well completions. Notably, it generated free cash flow of $67.4 million in the quarter versus the year-ago figure of $60.9 million.
Outlook
SM Energy's operating plan for 2021 is expected to generate free cash flow of $100 million, which will likely help lower its debt load.
The company has a strong hedging position, which enables it to navigate through the weak oil price environment.
Repsol’s bottom line for 2021 is expected to surge 35.2% year over year.
Pioneer’s bottom line for 2021 is expected to rise 320% year over year.
Denbury’s bottom line for 2021 is expected to rise 142.6% year over year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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SM Energy (SM) Q4 Earnings Miss Estimates on Lower Production
SM Energy Company (SM - Free Report) reported fourth-quarter adjusted earnings of 2 cents per share, missing the Zacks Consensus Estimate of 7 cents. However, the bottom line improved from the year-ago loss of 4 cents per share.
Quarterly revenues of $320 million decreased from $452 million in the year-ago quarter and missed the Zacks Consensus Estimate of $340 million.
The lower-than-expected results can be attributed to a decline in daily oil equivalent production volumes.
SM Energy Company Price, Consensus and EPS Surprise
SM Energy Company price-consensus-eps-surprise-chart | SM Energy Company Quote
Operational Performance:
Total Production Falls
SM Energy’s fourth-quarter production totaled 122.4 thousand barrels of oil equivalent per day (MBoe/d) (51.4% oil), down 11.8% from the year-ago level of 138.8 MBoe/d.
Oil production decreased 6% year over year to 62.9 thousand barrels per day (MBbls/d). The company produced 275.3 million cubic feet per day of natural gas in the quarter, down 9.9% year over year. Natural gas liquids contributed 13.6 MBbls/d to total production volume, down 33.7% from the fourth-quarter 2019 level.
Realized Prices Decline
Excluding the effects of derivative settlements, the average realized price per Boe was $28.42 compared with $35.17 in the year-ago quarter. Average realized price of natural gas increased 1.7% year over year to $2.46 per thousand cubic feet. Notably, average realized prices of oil decreased 27.7% to $40.54 per barrel and that of natural gas liquids increased 3.3% from the prior-year quarter to $18.43.
Operating Cost & Expenses
On the cost front, unit lease operating expenses decreased 12.2% year over year to $4.10 per Boe. In addition, transportation expenses fell to $2.89 per Boe from $3.46 in the year-ago quarter. Moreover, general and administrative expenses decreased 39% to $1.78 per Boe from the prior-year level of $2.92.
Total exploration expenses were $11.3 million, lower than the year-ago figure of $17.6 million. Hydrocarbon production expenses for the quarter were recorded at $96 million compared with the year-ago level of $127.3 million. Notably, total operating expenses for the quarter decreased to $492.3 million from the year-ago period’s $540 million.
Capex
Capital expenditure for the fourth quarter was recorded at $128 million, lower than the year-ago figure of $235.1 million. This was due to lower drilling costs per lateral foot and the postponement of five well completions. Notably, it generated free cash flow of $67.4 million in the quarter versus the year-ago figure of $60.9 million.
Outlook
SM Energy's operating plan for 2021 is expected to generate free cash flow of $100 million, which will likely help lower its debt load.
The company has a strong hedging position, which enables it to navigate through the weak oil price environment.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space include Repsol SA (REPYY - Free Report) , Pioneer Natural Resources Corporation (PXD - Free Report) and Denbury Inc , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Repsol’s bottom line for 2021 is expected to surge 35.2% year over year.
Pioneer’s bottom line for 2021 is expected to rise 320% year over year.
Denbury’s bottom line for 2021 is expected to rise 142.6% year over year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>