EOG Resources Inc. EOG reported second-quarter 2015 adjusted earnings of 28 cents per share that handily beat the Zacks Consensus Estimate of 5 cents. However, the bottom line witnessed a massive decline from the year-ago quarter adjusted earnings of $1.45 amid weak commodity prices and lower production volumes.
Total revenue in the quarter plunged over 41% year over year to $2,469.7 million. Nonetheless, the top line beat the Zacks Consensus Estimate of $2,260 million.
Operational Performance
During the quarter, EOG’s total volume decreased 5.2% from the year-earlier level to 51.0 million barrels of oil equivalent (MMBoe) or 560.5 thousand barrels of oil equivalent per day (MBoe/d).
Crude oil and condensate production in the quarter totaled 277.5 thousand barrels per day (MBbl/d), down 1.4% from the prior-year level. Natural gas liquids (NGL) volumes decreased 7.2% from the year-ago quarter level to 73.5 MBbl/d. On the other hand, natural gas volumes decreased to 1,257 million cubic feet per day (MMcf/d) from the year-earlier level of 1,383MMcf/d.
Average price realization for crude oil and condensates decreased nearly 44% year over year to $57.45 per barrel. Quarterly NGL prices fell nearly 55% to $15.54 per barrel from $34.41 a year ago. Natural gas was sold at $2.40 per thousand cubic feet (Mcf), thereby reflecting a year-over-year fall of over 40%.
Liquidity Position
At the end of the second quarter, EOG had cash and cash equivalents of $1,367.4 million and long-term debt of $6,393.9 million. This represents a debt-to-capitalization ratio of 26.8%.
During the quarter, the company generated approximately $1,237.9 million in discretionary cash flow compared with $2,197.8 million in the year-ago quarter.
Guidance
EOG’s third-quarter total production is expected between 542 MBoe/d and 567.9 MBoe/d, which includes 72–77 MBbls/d of NGL and 1,202–1,277MMcf/d of gas. For the full year, EOG expects total volume between 562.6 MBoe/d and 579.4 MBoe/d, comprising NGL in the 74–77 MBbl/d range and natural gas in the 1,228–1,265 MMcf/d band.
For the third quarter as well as full year, the company expects crude oil and condensate volumes in the range of 269.7–278.1 MBbls/d and 283.9–291.6 MBbls/d, respectively.
The company lowered its total capital expenditure budget by $200 million. It now ranges between $4.7 billion and $4.9 billion for 2015, down over 40% compared with that in 2014.
Zacks Rank
EOG currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are Seadrill Partners, LLC SDLP, CVR Refining, L.P. CVRR and Valero Energy Partners, L.P. VLP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment