Plains Exploration & Production Company
) posted fourth-quarter 2012 pro forma earnings of 41 cents,
missing the Zacks Consensus Estimate by 12 cents. However,
quarterly earnings were 105% higher than the prior-year results
owing to an improvement in the top line.
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On a GAAP basis, the company reported earnings of $1.65 per share
versus 69 cents per share in the year-ago quarter. The variance
between GAAP and pro forma earnings was due to a $2.26 unrealized
gain on investment measured at fair value; partially offset by a
charge of $1.02 associated with unrealized and realized loss on
mark-to-market derivative contracts, debt extinguishment costs,
acquisition and merger related costs, bridge loan facility
commitment fees and related expenses, and adjusted income taxes.
The company's 2012 pro forma earnings of $1.74 per share missed
the Zacks Consensus Estimate by 8.4%. Full-year earnings were
however 12.3% higher than the prior year.
In full-year 2012, the company's GAAP earnings were $2.32 per
share compared with $1.44 a year ago.
Plains Exploration & Production's quarterly revenue of $869.2
was 19% above the Zacks Consensus Estimate. Revenues increased
68% year over year on a 91% rise in the
segment revenue to $798.5 million backed by strong contribution
from the Eagle Ford Shale and steady performance from California.
The growth was partially offset by 27.3% and 83.8% year over year
declines in the revenues from the
The company's 2012 revenue was $2.6 billion, up 30% from the
prior-year revenue of $2.0 billion.
Daily sales volumes of Plains Exploration & Production
increased 26.1% year over year to 132,911 barrels of oil
equivalent (Boe) per day in fourth-quarter 2012. Quarterly
average daily oil and liquids sales volume was 93,043 barrels of
oil (Bbls), up 78% from 52,262 Bbls in the prior-year quarter.
Average realized hydrocarbon price, before derivative
transactions, on a per Boe basis, was $71.05 in the fourth
quarter, up 33.7% year over year. An increase of 7.2% year over
year in oil realized prices helped the company to offset a 3.3%
decline in natural gas prices.
On the cost side, the company's quarterly operating costs
increased 66.6% year over year to $692.2 million due to higher
lease operating expenses, electricity costs, production and ad
valorem tax costs, gathering and transportation costs, general
and administrative expenses, and depreciation, depletion and
amortization expenses. The increase was partially compensated by
lower steam gas costs.
Despite higher expenses, revenue growth was aided by a 73.5%
year-over-year improvement in the operating margin, which was
$177 million in the quarter.
Cash and cash equivalents as of Dec 31, 2012 were $180.6 million
compared with $419.1 million as of Dec 31, 2011.
As of Dec 31, 2012, long-term debt was $9.98 billion versus $3.76
billion as of Dec 31, 2011.
Net cash provided by operating activities for the twelve months
ended Dec 31, 2012 was $1.3 billion, higher than $1.1 billion in
the year-ago comparable period.
Capital expenditure for the year increased to $1.91 billion from
$1.86 billion in 2011. The increase was due to the addition of
oil and gas properties and leasehold acquisitions.
Other Energy Company Releases
Anadarko Petroleum Corporation
) posted fourth-quarter 2012 net earnings from continuing
operations of 91 cents per share, beating the Zacks Consensus
Estimate by 30% but decreasing 7% year over year.
Noble Energy Inc.
) reported adjusted earnings per share of $1.65 for the fourth
quarter 2012, beating the Zacks Consensus Estimate of $1.07 with
ease. The quarterly results increased 6.4% from the year-ago
earnings of $1.55.
Devon Energy Corp.
) reported fourth-quarter 2012 adjusted earnings per share of 78
cents, a penny above the Zacks Consensus Estimate. However, the
results were 49.7% lower than the prior-year quarter.
Plains Exploration & Production Company's fourth-quarter
earnings missed the Zacks Consensus Estimate, but revenue
surpassed the same primarily on a strong performance at the Eagle
Positive catalysts for the company are its strong balance sheet
and liquidity position, asset rebalancing strategy, liquid-rich
profile, and development of onshore assets in California and the
Eagle Ford Shale. We are hopeful of ample upside potential from
these in the near term.
However, we are skeptical about uncertainties associated with
switching to alternate energy from oil for power generation, and
prevailing production curtailment in the manufacturing sector and
power generation, which may challenge margins.
Houston, Texas-based Plains Exploration & Production Company
engages in the acquisition, development, exploration and
production of oil and gas properties, primarily in the United
States. The company currently has a Zacks Rank #3 (Hold).