Back to top

Image: Bigstock

PDC Energy (PDCE) Q1 Earnings Beat on Strong Production

Read MoreHide Full Article

Upstream operator PDC Energy (PDCE - Free Report) reported adjusted earnings per share of $3.66, comfortably ahead of the Zacks Consensus Estimate of $3.18. The company had reported a profit of $1.41 in the year-ago quarter. The outperformance can be primarily attributed to better-than-anticipated production volumes and higher commodity prices. Precisely, the Colorado-focused company’s output of 17,924 thousand barrels of oil equivalent (MBoe) surpassed the Zacks Consensus Estimate of 17,600 MBoe.

Meanwhile, PDC Energy recorded total revenues of $316.4 million, higher than the year-ago level of $286 million but well below the consensus mark of $739 million due to losses from commodity price risk management.

The company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, PDCE’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders. In fact, PDC Energy returned $110 million to its shareholders during the first quarter through dividends and buybacks.
 

PDC Energy, Inc. Price, Consensus and EPS Surprise

PDC Energy, Inc. Price, Consensus and EPS Surprise

PDC Energy, Inc. price-consensus-eps-surprise-chart | PDC Energy, Inc. Quote

 

Production & Prices

For the first quarter of 2022, PDC Energy’s production totaled 17,924 MBoe (60% liquids), reflecting an increase of around 13.9% from 15,740 MBoe a year ago. Of the aggregate output, 15,400 MBoe (or some 86%) came from Wattenberg Field and the rest from Delaware Basin.

The average realized natural gas price increased from $2.63 per thousand cubic feet (Mcf) in the year-ago quarter to $3.78. PDC Energy sold NGLs at an average price of $34.70 per barrel (Bbls) compared to $21.19 a year ago. Meanwhile, the average oil price realization came in at $93.93 per barrel, 66.7% higher than $56.34 in the year-ago period. Overall, PDC Energy fetched $49.23 per MBoe compared with $29.74 a year ago.

Capital Expenditure & Balance Sheet

The energy explorer, which recently completed the previously announced acquisition of privately-held Great Western Petroleum LLC, shelled out $187 million in the form of oil and gas capital investments. As of Mar 31, PDC Energy had approximately $171.2 million in cash and cash equivalents, and $942.6 million in long-term debt, representing a debt-to-capitalization of 25.4%. During the quarter, the company returned approximately $110 million through dividends and share repurchases.

Guidance

For 2022, PDC Energy expects to pump 225,000-240,000 Boe per day of hydrocarbon. It also gave its oil production expectation of 74,000-81,000 Boe per day. The Zacks Rank #1 (Strong Buy) company forecast a capital spending budget of $950 million to $1 billion. It has committed to return at least 60% of free cash flow to its shareholders in 2022 and beyond.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Some Key E&P Earnings

Apart from PDCE, supportive industry fundamentals and the emerging multi-year commodity price upcycle have led to a good earnings season for some other exploration and production companies as well.

ConocoPhillips (COP - Free Report) reported first-quarter adjusted earnings per share of $3.27, beating the Zacks Consensus Estimate of $3.24. Further, COP’s bottom line significantly improved from the prior-year quarter’s 69 cents per share. One of the world’s largest independent oil and gas producers based in Houston, TX, ConocoPhillips’ strong quarterly results have been aided by increased oil-equivalent production volumes and realized commodity prices.

ConocoPhillips revised higher its expected 2022 return of capital to shareholders. The new guidance is $10 billion versus the prior projection of $8 billion. COP’s incremental returns to stockholders will get distributed through share repurchases and variable return of cash tiers.

Another upstream giant EOG Resources (EOG - Free Report) reported first-quarter adjusted earnings per share of $4.00, beating the Zacks Consensus Estimate of $3.69. The bottom line significantly improved from the year-ago quarter’s earnings of $1.62. EOG’s strong earnings were driven by higher oil equivalent production and commodity prices.

For the quarter under review, EOG Resources’ volumes increased 13.4% year over year to 883,300 BOE/d on higher U.S. output. Committed to shareholder returns, EOG announced a special dividend of $1.80 per share.

Finally, we have Pioneer Natural Resources Company (PXD - Free Report) , which reported first-quarter earnings of $7.74 per share (excluding one-time items), beating the Zacks Consensus Estimate of $7.32. The bottom line surged from the year-ago quarter’s profit of $1.77 per share. PXD’s robust bottom line can be attributed to higher oil-equivalent production volumes and commodity price realizations.

For the second quarter, Pioneer Natural announced a dividend payment of $7.38 per share of common stock, which includes a variable dividend of $6.60 per share and a base dividend of 78 cents. This suggests a 95.2% increase from the prior dividend of $3.78 per share.