Independent oil & gas operator WPX Energy Inc. (WPX) reported earnings of 3 cents per share in the fourth quarter as against a loss of 34 cents per share in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of 11 cents.
On a GAAP basis, WPX Energy reported earnings of $1.06 per share versus a loss of $4.85 per share in the year-ago quarter. The difference between the GAAP and operating number in the reported quarter was due to unrealized mark-to-market gains resulting from decreases in forward oil and natural gas prices and certain one-time charges and impairments to producing properties.
In 2014, earnings were 12 cents per share, marginally short of the Zacks Consensus Estimate of 14 cents but a turnaround from the year-ago loss of $1.31 per share. GAAP earnings in the year were 80 cents as compared to a loss of $5.91 per share in the year-ago period.
Total Revenue
WPX Energy’s quarterly revenues of $1,125 million surpassed the Zacks Consensus Estimate of $676 million by 66.4%. Total revenues were higher than the year-ago figure of $576 million by a whopping 95.3%. The improvement was primarily due to higher oil and condensate sales.
Total revenues in 2014 were $3,493 million, 43.9% higher than $2,431 million in the prior year.
Highlight of the Release
Total average daily production in fourth quarter 2014 was 1,032 million cubic feet equivalent per day (MMcfe), up 1% from 1,021 MMcfe in the year-ago quarter. Oil production in the reported quarter went up by 71%, while natural gas and NGL production trended down.
Total expenses in the reported quarter were $745 million, down 61.6% from the year-ago level of $1,938 million. The significant decline in expenses was due to the absence of an impairment of $841 million. Excluding the impairment, expenses were down 33.9% year over year.
Interest expenses in the reported quarter were $35 million, increasing 25.7% from $26 million in the year-ago quarter.
Financial Update
WPX Energy exited 2014 with $41 million of cash and cash equivalents compared with $47 million at prior-year end.
Net cash from operating activities for full year 2014 was $1,070 million compared with $636 million in 2013.
Capital expenditure during 2014 was $1,807 million compared with $1,154 million in 2013.
Long-term debt as of Dec 31, 2014, was $2,280 million, up from $1,911 million as of Dec 31, 2013.
Other Company Releases
Cheniere Energy, Inc. (LNG) incurred a loss of 50 cents per share in fourth-quarter 2014, wider than the Zacks Consensus Estimate of a loss of 29 cents.
PDC Energy, Inc. (PDCE) reported a fourth-quarter 2014 loss of $1.11 per share. The Zacks Consensus Estimate was at earnings of 20 cents.
Apache Corp. (APA) reported fourth-quarter 2014 adjusted earnings of $1.07 per share, surpassing the Zacks Consensus Estimate of 76 cents by 40.8%.
Our View
WPX Energy is going through a process of transformation and is concentrating on high-margin assets. The company is in negotiation with buyers to exit from Power River Basin operations and focus more on core operating basins.
The current focus of the company is in the Williston, San Juan and Piceance basins. This has helped it to boost its oil production substantially and is expected to provide strong returns going forward.
WPX Energy has a Zacks Rank #2 (Buy).
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