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WPX Energy (WPX) Q2 Earnings Beat on Strong Oil Production

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WPX Energy Inc.’s (WPX - Free Report) second-quarter earnings of 6 cents per share surpassed the Zacks Consensus Estimate of 2 cents by 200%. In the year-ago quarter, the company incurred a loss of 14 cents.

Total Revenues

WPX Energy’s quarterly revenues of $430 million lagged the Zacks Consensus Estimate of $446 million by 3.6%. However, total revenues improved 22.8% from $350 million in the year-ago quarter.

WPX Energy, Inc. Price, Consensus and EPS Surprise
 

WPX Energy, Inc. Price, Consensus and EPS Surprise | WPX Energy, Inc. Quote

Highlights of the Release
 
Total production in the second quarter was 125,700 barrels oil equivalent per day, up 65.0% year over year. Total liquids accounted for nearly 80% of the total production, reflecting the company’s increasing focus on oil.

Oil production in the quarter was 80,800 barrels per day, nearly 65% higher than the year-ago level, courtesy of 94% increase in Delaware Basin volumes over the past 12 months.

Total expenses were $433 million, up 57.5% from $275 million in the year-ago quarter.

Interest expenses in the reported quarter were $39 million, down 15.2% from $46 million in the prior-year quarter.

Realized Prices & Hedges

Realized oil prices in the quarter were $63.63 per barrel, up 49.2% from the year-ago quarter.

Realized natural gas prices were $1.12 per thousand cubic feet, down 41.0% from a year ago. Realized prices for natural gas liquids were up 32.9% to $20.94 per barrel.

For the rest of 2018, WPX Energy has 70,500 barrels per day of oil hedged at a weighted average price of $53.94 per barrel. The company also has 129,158 MMBtu per day of natural gas hedged at a weighted average price of $2.99 per MMBtu.

Financial Update
 
WPX Energy generated $103 million of cash and cash equivalents on Jun 30, 2018 compared with $189 million at the end of 2017.
 
Long-term debt as of Jun 30, 2018 was $2,154 million, down from 2017-end level of $2,575 million.
 
Net cash from operating activities in the first half of 2018 was $428 million compared with $142 million in the first half of 2017. For the same period, capital expenditure was $660 million compared with $542 million in the year-ago period.
 
Guidance

WPX Energy updated its total production for 2018 in the range of 122-130 thousand barrels of oil-equivalent per day (Mboe/d), up from prior expectation of 117-126 Mboe/d.

Oil production for 2018 is expected within 78,000-82,000 bbl/d, up 3% from the prior guided range of 75,000-80,000 bbl/d.

WPX Energy updated its 2018 capital spending guidance to $1,300-$1,400 million (earlier expectation was $1,160-$1,310 million), driven by additional investments for non-operated wells, facilities and infrastructure in the Delaware Basin, along with larger completions in the Williston Basin.

Zacks Rank

Currently, the company carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our View
 
WPX Energy's performance in the second quarter was better than expected, due to solid performance in the Delaware Basin and revival in commodity prices.

WPX Energy’s focus on liquids is positively impacting the overall performance. Its focus on oil development in the Delaware and Williston Basins will allow it to meet its revised production expectation for 2018.

Other Releases

Anadarko Petroleum Corporation (APC - Free Report) reported second-quarter 2018 earnings of 54 cents per share, lagging the Zacks Consensus Estimate of 60 cents by 10.0%.

Devon Energy Corp. (DVN - Free Report) reported second-quarter 2018 adjusted earnings per share of 34 cents, lagging the Zacks Consensus Estimate of 37 cents by 8.1%

Apache Corporation (APA - Free Report) reported adjusted earnings of 50 cents per share in the second quarter of 2018, beating the Zacks Consensus Estimate of 35 cents by 42.9%.

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