Stone Energy Corp. (SGY) reported fourth-quarter 2014 earnings of 7 cents per share, down 87.5% from the year-ago earnings of 56 cents per share on lower production and price realization.
Total operating revenue decreased 22.8% year over year to $184.8 million from $239.3 million reported a year ago.
For full-year 2014, the company earned 65 cents per share compared with the year-ago profit of $2.88. Total revenue was $795.5 million, representing more than 18% decrease from the year-ago level of $974.2 million.
Operational Highlights
During the quarter, production averaged 255 million cubic feet of gas equivalent per day (MMcfe/d), down 14.4% from the prior-year level of 298MMcfe/d. Of the total production, natural gas accounted for 49%, while 35% was oil. The remaining 16% was accounted for by natural gas liquids ("NGL").
Overall realization on a per Mcfe basis amounted to $7.07 in the reported quarter compared with $8.55 per Mcfe in fourth-quarter 2013. Natural gas prices decreased to $2.89 per Mcf from $3.76 per Mcf in the year-ago quarter, while oil price was $83.30 per barrel (down 12.4% on an annualized basis). Natural gas liquids prices also decreased 24.8% from the prior-year quarter to $32.28 per barrel.
On the cost front, unit lease operating expenses decreased to $1.56 per Mcfe from $1.59 per Mcfe in the year-earlier quarter. Depreciation, depletion and amortization costs were $3.55 per Mcfe (against $3.43 per Mcfe), while salaries, general and administrative (SG&A) expenses stood at 73 cents per Mcfe (against 59 cents per Mcfe).
Liquidity
At the end of the quarter, the company had approximately $74.5 million in cash and $1,041.0 million in long-term debt, with a debt-to-capitalization ratio of 90.4% compared with 51.2% in the preceding quarter. Discretionary cash flow decreased 36.8% year over year to $90.1 million.
Guidance
For the upcoming quarter, the company expects net daily production to range between 270 MMcfe and 276MMcfe per day. For 2015, the company anticipates total volume in the range of 234–258MMcfe per day.
The company has projected its capital outlay for the year at $450 million and expects the tax rate within 35–37%. For 2015, Stone Energy estimates lease operating expenses within $115–$125 million, transportation, processing and gathering expenses within $69–$75 million, and salaries, general & administrative expenses within $59–$63 million.
Ranks
Stone Energy carries a Zacks Rank #3 (Hold). Better-ranked stocks in the oil and gas sector – Valero Energy Partners L.P. (VLP), Golar Energy Partners LP (GMLP) and Hallador Energy Company (HNRG) – sport a Zacks Rank #1 (Strong Buy).
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