Newfield Exploration’s Q3 Earnings Beat, Deteriorate Y/Y

Zacks

Newfield Exploration Co. NFX reported adjusted third-quarter 2015 earnings of 21 cents per share that comfortably beat the Zacks Consensus Estimate of 17 cents. The quarterly earnings, however, decreased almost 60% from the year-ago adjusted profit of 52 cents per share.

The company’s total revenue plunged 38.2% year over year from $610 million to $377 million. The top line also lagged the Zacks Consensus Estimate of $440 million.

Operational Performance

Total quarterly production of 14.3 million barrels of oil equivalent (MMBoe) comprised 47% oil, 16% natural gas liquids (NGLs) and 37% natural gas.

Natural gas volumes totaled 32.1 billion cubic feet (Bcf). Oil, condensate and NGLs volumes came in at 9.0 million barrels.

Newfield’s third-quarter oil and natural gas price realizations (including the effect of hedges) averaged $36.25 per Boe. Natural gas prices were $3.54 per Mcf, oil prices were $54.31 per barrel, and NGLs prices were $16.79 per barrel.

Recurring lease operating expenses (LOE) were $4.64 per Boe. Production and other taxes were 92 cents per Boe, while general and administrative expenses were $4.68 per Boe.

Financials

At the end of the reported quarter, Newfield had cash balance of $7 million. Long-term debt was $2,498 million, thereby representing a debt-to-capitalization ratio of approximately 55.2%.

Guidance

For 2015, Newfield increased its output projection to 55.3–55.8 MMBoe from 53.5–55.0 MMBoe, while capital spending guidance was reiterated at $1.4 billion.

The company also projects LOE of $308 million, production & other taxes of $58 million and general & administration expenses of $209 million.

Zacks Rank

Newfield Exploration currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Natural Gas Services Group Inc. NGS, Midcoast Energy Partners, L.P. MEP and Seadrill Partners L.P SDLP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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