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SilverBow (SBOW) Q4 Earnings Lag Estimates on Lower Gas Price

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SilverBow Resources, Inc. SBOW reported fourth-quarter 2019 adjusted earnings of 53 cents per share, missing the Zacks Consensus Estimate of $1.58. Also, the bottom line declined from the year-ago figure of $4.82 per share.

Revenues of $69.9 million fell from the year-ago level of $88.2 million. Also, the metric missed the Zacks Consensus Estimate of $72 million.

The weak results were caused by lower commodity price realizations and increased total operating expenses.

SilverBow Resources Inc. Price, Consensus and EPS Surprise

 

SilverBow Resources Inc. Price, Consensus and EPS Surprise

SilverBow Resources Inc. price-consensus-eps-surprise-chart | SilverBow Resources Inc. Quote

Proved Reserves

As of Dec 31, 2019, the company’s proved reserves were 1.4 trillion cubic feet equivalent, which reflected a 6% rise from the 2018 level. SilverBow’s reserve replacement ratio for the year was 189%.

Production

In fourth-quarter 2019, net production volume averaged 234 million cubic feet of natural gas equivalent per day (MMcfe/d), marking a 3% year-over-year rise. Net oil production volumes were recorded at 4,760 barrels per day (Bbls/d), reflecting a 103% rise from the year-ago quarter. Of the total production, 75% were natural gas, while oil and NGLs were accounted for 12% and 13%, respectively.

Price Realization

Average realized price for oil was $55.70 per barrel, down from $61.19 in the year-ago quarter. Also, natural gas price of $2.40 per thousand cubic feet was lower than $3.84 reported in the prior-year quarter. Moreover, NGLs realized price declined to $14.65 per barrel from $22.81 in fourth-quarter 2018.

Operating Expenses

The company’s total operating expenses in the quarter were $46.5 million, higher than the year-ago level of $44.1 million. This was primarily caused by higher lease operating costs of $5.7 million in fourth-quarter 2019 compared with $4.7 million in the year-ago period. However, transportation and gas processing costs fell marginally to $7.1 million from the year-ago level of $7.3 million.

Financials

The company’s fourth-quarter 2019 capital expenditure was $54.2 million, which incorporated $1.5 million of leasing spending.

As of Dec 31, 2019, SilverBow had cash and cash equivalents of $1.4 million. Long-term debt totaled $472.9 million, while the debt-to-capitalization ratio was 54.4%.

Guidance

The company expects 2020 natural gas equivalent production of 215-228 MMcfe/d. For first-quarter 2020, its production is expected to be 231-238 MMcfe/d. Oil production in the quarter will likely be 4,550-4,700 Bbls/d.

Notably, it expects 2020 capital expenditure of $175-$195 million, of which almost 90% will likely be directed toward drilling and completion activities.

Zacks Rank & Stocks to Consider

SilverBow currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the energy sector are Hess Corporation HES, Centennial Resource Development, Inc. (CDEV - Free Report) and Superior Energy Services, Inc. SPN, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hess’ bottom line for 2020 is expected to rise 91.6% year over year.

Centennial Resource’s earnings for first-quarter 2020 are expected to rise 50% year over year.

Superior Energy’s bottom line for first-quarter 2020 is expected to rise 42.9% year over year.

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