We have reached the final stretch of the Q2 earnings season with results from 317 S&P 500 members that combined account for almost 75% of the index’s total market capitalization. Total earnings for these companies are down 3.3% from the same period last year on 0.9% lower revenues, with 72.9% positive earnings surprises and 53.6% beating revenue estimates. (Data from the Earnings Preview report dated July 29, 2016).

Energy Remains the Biggest Drag

Expectedly, the ‘Energy’ sector has been a big drag on the aggregate growth picture. For the sector components on the S&P 500 index that have reported Q2 results, total earnings are down 76.5% on 24.6% lower revenues. Though 66.7% of the companies outperformed earnings estimates, the positive surprises have undoubtedly been aided by easy-to-beat estimates. In fact, we have seen sub-standard reports from a number of major players in the sector, like Exxon Mobil Corp. (XOM Quick QuoteXOM - Free Report) and Royal Dutch Shell plc .

E&P Companies are the Hardest Hit

While all crude-focused stocks stand to lose from falling commodity prices, companies in the exploration and production (E&P) sector are the worst placed, as they are extracting less value for their products. Consequently, with oil prices recently collapsing to their lowest levels in years, upstream firms have seen their revenues, earnings and cash flows being hit hard.

Moreover, with no refining business to help neutralize low oil prices, these companies have suffered the most. As oil sales floundered, producers got fewer revenues. To survive the period of weak profits, they took more debt. Some of them – especially the smaller and the more speculative ones with the most leverage – now face an existential crisis, while for the others the time bomb is ticking with crude prices stuck below $50 a barrel.

While mid- and large-sized energy producers are in a better position to weather the storm due to better financial flexibility, they still face declining profits and in some cases – widening losses.

Oil Exploration Stocks to Watch for Earnings on Aug 4

Let’s see what’s in store for five such companies expected to come up with second-quarter numbers on Thursday, Aug 4. Let’s take a look at how things are shaping up at their end.

EOG Resources Inc. (EOG Quick QuoteEOG - Free Report) is expected to report results before the opening bell. In the first quarter of 2016, this Houston, TX-headquartered large-cap energy explorer – with operations in major producing basins in the U.S., offshore Trinidad and the U.K. North Sea – reported better-than-expected numbers on the back of substantial well productivity improvements and cost reductions. Moreover, the company has an excellent track of earnings surprises, having beaten estimates in each of the last four quarters at an average rate of 147.36%.

However, our proven model shows that an earnings beat is uncertain for EOG Resources this time around. This is because, as per our proven model, a stock needs to have both a both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. Simultaneously, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

For the quarter to be reported, EOG Resources has an Earnings ESP of 0.00%, while it carries a Zacks Rank #3. (Read more: Will EOG Resources Surprise this Earnings Season?)

Headquartered in Calgary, Alberta, Canadian Natural Resources Ltd. (CNQ Quick QuoteCNQ - Free Report) is also set to report second-quarter 2016 results before the opening bell. Coming to earnings surprise history, the Western Canada-focused upstream player has a good track of having beaten estimates in all but one of the last four quarters.

But we do not expect Canadian Natural to beat earnings expectations in the to-be-reported quarter. This is because Canadian Natural is a Zacks Rank #3 stock but has an Earnings ESP of 0.00%. (Read more: Can Canadian Natural Resources Q2 Earnings Surprise?)

Apache Corp. (APA Quick QuoteAPA - Free Report) is another oil and gas finder to report second-quarter results tomorrow – again prior to the market open. Notwithstanding the crude collapse, the company has outperformed the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 100.02%.

Our quantitative model, though, does not hint at another earnings beat for this Houston, TX-based company primarily looking for oil and gas in North America’s Permian basin. While a Zacks Rank #2 increases the predictive power of ESP, Apache’s ESP of 0.00% makes surprise prediction difficult. (Read more: Apache: What's in the Cards this Earnings Season?)

WPX Energy Inc. , a Tulsa, OK-based independent, oil and gas exploration and production company, will release second-quarter results before the opening bell.

Our model does not indicate that WPX Energy is likely to beat on earnings this time around, given the combination of a Zacks Rank #2 and Earnings ESP of -4.55%. As it is, the company has a poor track of earnings surprises, having missed estimates in three of the last four quarters at an average rate of 7.66%. (Read more: What's in Store for WPX Energy in Q2 Earnings?)

Finally, we have independent oil and natural gas producer Synergy Resources Corp. coming out with second-quarter numbers tomorrow – this time after the market closes.

Our model does not indicate that the Denver, CO-based upstream player with primary operations in the Wattenberg Field is likely to beat on earnings this time around. This is because Synergy Resources is a Zacks Rank #3 stock but has an Earnings ESP of 0.00%.

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