Louisiana-based independent oil and gas explorer, Stone Energy Corporation SGY announced that the borrowing base under its bank credit facility was reaffirmed at $500 million following its lenders' scheduled semi-annual redetermination process. As of Oct 13, 2015, the credit facility was substantially undrawn with only $19.2 million in letters of credit outstanding.
At the end of the second quarter, Stone Energy had approximately $141.7 million in cash and $1,538.5 million in long-term debt. Capital expenditures for the second quarter of 2015 were approximately $91.1 million, which included $18.8 million of plugging and abandonment expenditures, and the sale of a deep water lease block for $10.1 million.
For the third quarter, the company expects net daily production of 225−231 million cubic feet equivalent (MMcfe). For 2015, it anticipates total volume in the range of 252−264 MMcfe per day. Stone Energy expects capital outlay projection for 2015 at $450 million.
Stone Energy is an independent oil and natural gas exploration and production company headquartered in Lafayette, LA, with additional offices in New Orleans, Houston and Morgantown, WV.
Stone Energy is well placed in the industry with a widespread and high-yielding inventory. The company boasts an extensive capital project inventory and generates surplus cash flow with no bank debt. Although Stone Energy aims to apportion its capital across its portfolio, the focus will be on the GoM shelf as well as the Marcellus region.
However, as is the case with other independent exploration and production companies, results for Stone Energy are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces. Stone Energy’s overall picture for the third quarter of 2015 remains closely tied to the persistent fall in crude prices. The overall market remained jittery purely due to a declining rig count, weak Chinese demand and weak jobs numbers from the domestic space. Also, the threat of a White House veto is hanging over the lifting of the oil export ban.
Stone Energy currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Callon Petroleum Company CPE, Halcon Resources Corporation HK and Matador Resources Company MTDR. Each of these stocks carries a Zacks Rank #2 (Buy).
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