Upstream energy firm Stone Energy Corporation (SGY) has released its operational and capital spending update. Let us first take a closer look at the company’s operational update. Per the company, year-end 2014 estimated proved reserves were 152 million barrels of oil equivalent (MMBoe), which represents a 5.5% increase from year-end 2013 estimated proved reserves.
From drilling additions and extensions, Stone replaced approximately 250% of production in 2014. The estimated proved reserves were 28% oil, 18% natural gas liquids (NGLs) and 54% gas on an equivalent basis.
Fourth-quarter 2014 production averaged approximately 42.5 thousand barrels of oil equivalent per day (MBoe). Full-year production averaged approximately 42.6 MBoe per day.
Stone Energy authorized a 2015 capital expenditure budget of $450 million. The budget is allocated approximately 75% to Deep Water/Gulf Coast, 8% to Appalachia, 4% to Business Development and 13% to Abandonment expenditures.
In 2014, the company drilled two deep water wells at Cardona and initiated production before the year end. In Appalachia, the company drilled 38 wells in the Marcellus shale and averaged over 100 Mmcfe per day for the year.
Lafayette, LA-based Stone Energy is an independent oil and gas exploration and production company engaged in the acquisition and subsequent exploration, development, operation and production of oil and gas properties, located primarily in the Gulf of Mexico (GoM).
Currently, the company is well positioned in the industry, with a widespread high-yielding inventory. Notably, it boasts an extensive capital project inventory. Moreover, Stone Energy is generating surplus cash flow. Although the company aims to apportion the capital across its portfolio, its focus will be on the GoM shelf and Marcellus region.
However, as is the case with other independent exploration and production companies, the results of Stone Energy are directly exposed to oil and gas prices, which have been sliding down for over six months due to the steady southward journey of crude.
Currently, Stone Energy carries a Zacks Rank #5 (Strong Sell). Better-ranked players from the energy sector include Cheniere Energy Partners LP. (CQP), Spectra Energy Partners, LP (SEP) and Seadrill Partners LLC (SDLP). All these stocks sport a Zacks Rank #1 (Strong Buy).
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