Upstream energy company EOG Resources Inc. EOG reported third-quarter 2017 adjusted earnings of 19 cents, beating the Zacks Consensus Estimate of 10 cents. The bottom line also compared favorably with the year-ago quarter loss of 40 cents per share.
Total revenues in the quarter rose 24.8% year over year to $2,644.8 million. Moreover, revenues beat the Zacks Consensus Estimate of $2,578 million.
The strong third-quarter 2017 results were supported by higher oil equivalent production and increased commodity price realizations.
Along with the strong results, the company announced that it has added two premium crude acreages to its portfolio with net resource potential of 750 million barrels of oil equivalent.
EOG Resources, Inc. Price, Consensus and EPS Surprise
EOG Resources, Inc. Price, Consensus and EPS Surprise | EOG Resources, Inc. Quote
Operational Performance
In the quarter, EOG Resources’ total volume improved 7.6% year over year to 55 million barrels of oil equivalent (MMBoe).
Crude oil and condensate production in the quarter totaled 327.9 thousand barrels per day (MBbl/d), up 16% from the prior-year level. Natural gas liquids (NGL) volumes improved 6.7% year over year to 87.4 MBbl/d. However, natural gas volumes fell to 1,096 million cubic feet per day (MMcf/d) from the year-earlier level of 1,144 MMcf/d.
Average price realization for crude oil and condensates rose 10.3% year over year to $48.11 a barrel. Quarterly NGL prices also improved 50% year over year from $14.92 to $22.38 per barrel. Natural gas was sold at $2.19 per thousand cubic feet (Mcf), up 12.3% year over year.
Operating Cost
Total operating cost increased to $2,430 million from $2,312 million in the year-ago quarter. Exploration expenses increased almost 21% during the quarter and the marketing costs surged 43.6%.
Liquidity Position
At the end of the third quarter, EOG Resources had cash and cash equivalents of $846.1 million and long-term debt of $6,380.4 million. This represents a debt-to-capitalization ratio of 31.4%.
During the quarter, the company generated approximately $1,169.4 million in discretionary cash flow, compared with $725 million in the year-ago quarter.
Guidance
The company expects crude oil equivalent volumes in the fourth quarter of 2017 to be in the range of 328.1-662.2 thousand barrels of oil equivalent per day. Capital expenditure for the fourth quarter is expected to lie within $3,000-$3,350 million.
About the company
Houston, TX-based EOG Resources is a major independent oil and gas exploration and production (E&P) company, with operations in the United States, Canada, offshore Trinidad, the U.K., China, Canada and few other international areas. EOG Resources is active in most of the major onshore producing regions, including the key Texas and Oklahoma basins and the Rocky Mountains in North America as well as in Canada. The company has historically concentrated on natural gas rather than oil. Additionally, EOG Resources has consistently remained focused on onshore drilling, with only a fraction of its resources devoted to the Gulf of Mexico.
Q3 Price Performance
During the quarter, EOG Resources gained 6.8% compared with 5% growth of the industry.
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Zacks Rank and Other Stocks to Consider
EOG Resources currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the oil and energy sector are Braskem S.A. BAK, Par Pacific Holdings, Inc. PARR and Northern Oil and Gas, Inc. NOG. While Braskem and Par Pacific sport a Zacks Rank #1 (Strong Buy), Northern Oil and Gas carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Braskem’s 2017 earnings are expected to grow 12.1% year over year. The company delivered a positive earnings surprise of 68.5% in the second quarter of 2017.
Par Pacific’s sales for the third quarter of 2017 are expected to increase 28.5% year over year. The company delivered an average positive earnings surprise of 195.3% in the last four quarters.
Northern Oil and Gas’s sales for the third quarter of 2017 are expected to increase 9.6% year over year. The company delivered an average positive earnings surprise of 66.7% in the last four quarters.
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