Plains Exploration & Production Co.
) posted fourth quarter 2011 pro forma earnings of 20 cents per
share, significantly lower than the Zacks Consensus Estimate of 42
cents. However, it was roughly flat year over year.
PXP's fourth quarter 2011 GAAP earnings were 69 cents per share
versus a loss of 14 cents in the year-ago quarter. The variance
between GAAP and pro forma was due to unrealized loss on
mark-to-market derivative contracts, realized loss on
mark-to-market derivative contracts, unrealized loss on investment
measured at fair value and costs related to debt
In fiscal 2011, the company's pro forma earnings were $1.56 per
share versus $1.06 in the year-ago period. The figure also missed
the Zacks Consensus Estimate of $1.81.
Plains Exploration & Production Co. reported 2011 GAAP
earnings of $1.44 per share compared with 73 cents per share in
Fourth quarter net revenues of $517.5 million increased 26.8%
from $408.1 million in the year-ago quarter.
revenues increased approximately $104.3 million reflecting higher
average realized prices, consistent performance of the Eagle Ford
Shale and California crude postings and higher crude oil sales
revenues increased nearly $3.0 million, reflecting higher sales
volumes. The quarterly revenue surpassed the Zacks Consensus
Estimate of $492.0 million.
In 2011, the company reported total revenue of $1,964.5 million,
up 27.2% year over year from $1,544.6 million in 2010. This was
driven by higher revenues generated by Oil, Gas and Other segments.
The fiscal 2011 revenue beat the Zacks Consensus Estimate of
In the reported quarter, Oil Sales accounted for approximately
80.9% of the company's revenues, Gas Sales represented 18.7% of
revenues, while other operating revenues made up for the remaining
Daily sales volumes at PXP grew 13% year over year to 105,396
barrels of oil equivalent ("BOE") per day in the fourth quarter of
2011. Average daily liquids sales volume increased 12% year over
year to 52,262 barrels per day compared with the fourth quarter of
Average realized hydrocarbon price, before derivative
transactions, on per barrel of oil equivalent (
) basis was $53.13 in the fourth quarter 2011, up 11.5% year over
year. An 18.9% year-over-year growth in oil realized prices helped
the company to offset the 9.8% decline in natural gas prices to
$3.30 per thousand cubic feet (Mcf).
On the cost side, Plains Exploration & Production's
operating costs increased 31.6%, marked by significantly higher per
unit lease operating expenses (up 34.4%), higher production and ad
valorem tax costs (up 98.8%) and higher gathering and
transportation costs (up 33.1%), offset by lower impairment of oil
and gas properties accretion (down 3.7%).
Despite significant rise in costs, strong revenue growth boosted
PXP's operating income for the quarter to $102.1 million with an
increase of 10.3%.
Plains Exploration & Production's balance sheet remained
strong at quarter end helped by its conservative financial
strategy. As of December 31, 2011, the company had nearly $419.1
million of cash and cash equivalents and $3,761.0 million in
In the fourth quarter, the company generated cash from operating
activities of $188.1 million, a 20.1% dip from last year, with
operating cash flows increasing 12.3% to $284.7 million.
For the fiscal 2012, PXP maintains its sales volumes guidance in
the range of 92-96 thousand BOE per day, based on minimization of
drilling activity by operators in the Haynesville Shale. At the
same time, the company plans to re-allocate its capital from the
Haynesville Shale to the Eagle Ford Shale.
In fiscal 2012, the company expects that the cost of production
per BOE will be in the range of $15.45 - $17.90.
Plains Exploration & Production has also reaffirmed cost of
production per BOE, reflecting higher forecasted oil and liquids
volumes and lower forecasted natural gas prices.
At the Peer
Noble Energy Inc.
), a PXP peer, announced adjusted earnings of $1.18 per share for
the fourth quarter of 2011 versus $1.04 per share in the year-ago
quarter. The quarterly earnings surpassed the Zacks Consensus
Estimate of $1.12.
Noble Energy's fourth quarter revenue was $985.0 million versus
$783 million in the prior-year quarter. The reported revenue beat
the Zacks Consensus Estimate by $35.0 million.
Plains Exploration & Production retains a short-term Zacks
#3 Rank on the stock, which translates into a Hold rating. Based in
Houston, Texas, Plains Exploration & Production engages in the
acquisition, development, exploration and production of oil and gas
properties primarily in the United States.
Plains Exploration and Production expects that crude oil
realized price will be 92% of Brent, reflecting the impact of
higher estimated crude oil volumes and stronger pricing.
Plains Exploration and Production is well positioned with its
fiscal 2012 contracts in California and the Eagle Ford Shale. The
company has also received the approval for the development of the
Lucius project at Keathley Canyon in the deepwater Gulf of Mexico
and expects production to begin from 2014.
NOBLE ENERGY (
): Free Stock Analysis Report
PLAINS EXPL&PRD (
): Free Stock Analysis Report
To read this article on Zacks.com click here.