Forest Oil Corporation
) second-quarter 2014 loss of 6 cents per share (excluding
non-recurring items) lagged the Zacks Consensus Estimate of a loss
of 2 cents per share. Moreover, the quarterly figure decreased 200%
from the year-ago earnings of 6 cents.
Forest Oil Corporation - Earnings Surprise |
The lackluster performance was mainly due to a fall in net sales
volume and oil sales volume. Lower
also contributed to the decline.
Total revenue in the reported quarter decreased 48.3% to $60.4
million from the year-ago level of $116.8 million and missed the
Zacks Consensus Estimate of $68.0 million.
Net sales volume shrunk nearly 53% year over year to 99.6 million
cubic feet equivalent per day (MMcfe/d). It comprised 31% liquids
compared with 41% in the prior-year quarter.
The company's net oil sales volume in the second quarter decreased
nearly 52% from the year-ago period to 3.2 thousand barrels per day
(MBbls/d). On the bright side, natural gas sales volume in the
quarter was 68.3 million cubic feet per day (MMcf/d) and accounted
for 68.6% of the total quarterly volume.
The average equivalent price per million cubic feet (Mcf),
including the effect of hedging, was $6.16, up 2.2% from the
year-ago realization of $6.03. Natural gas was sold at $3.97 per
Mcf, up 14.4% from the comparable prior-year quarter. However,
natural gas liquids (NGLs) were sold at $29.97 per barrel, up
nearly 8% from the year-ago quarter and average realized oil price
was $87.92 per barrel, down nearly 7% from the year-ago quarter.
During the second quarter, lease operating expenses of $1.58 per
Mcfe increased 11.3% year over year. Unit general and
administrative expenses rose 37.3% to 70 cents per Mcfe from the
year-ago level of 51 cents per Mcfe. Interest expense per unit
increased nearly 14% to $1.74 per Mcfe from $1.53 per Mcfe in the
second quarter of 2013.
At quarter-end, Forest Oil had $14.6 million of cash and cash
equivalents with $800.2 million of long-term debt (including
current portion), representing a debt-to-capitalization ratio of
106% (up from 95.8% at the end of first-quarter 2014).
At present, Forest Oil has a Zacks Rank #3 (Hold). However, other
stocks in the oil and gas sector like Weatherford International plc
), CNOOC Ltd (
) and Kosmos Energy Ltd. (
), sporting a Zacks Rank #1 (Strong Buy), are expected to perform
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