QEP Resources Earnings Beat on Higher Production, Guides Up - Analyst Blog


Domestic energy explorer QEP Resources Inc. ( QEP ) reported strong second-quarter 2014 results on the back of higher natural gas equivalent price and production.

The company reported earnings per share - adjusted for special items - of 38 cents, up 8.6% from the prior-year quarter level of 35 cents. The bottom line also beat the Zacks Consensus Estimate of 31 cents.

Quarterly revenues of $936.7 million increased about 24.7% from second-quarter 2013 and surpassed the Zacks Consensus Estimate of $743 million.

Volume Analysis

QEP Resources' overall production during the second quarter stood at 83.9 billion cubic feet equivalent (Bcfe), highlighting a 7.7% improvement from the previous-year quarter. Notably, gas accounts for 58% of the total production. A significant increase in production in the Williston Basin and Pinedale region aided the upside.

Natural gas volumes deteriorated 15% year over year to 48.6 billion cubic feet (Bcf) while liquid volumes improved 67.6% to 5,866.6 thousand barrels (MBbl).  

Realized Prices

QEP Resources' average realized natural gas price in the quarter stood at $4.25 per thousand cubic feet (Mcf), almost on par with the year-ago quarter. However, average oil price realization decreased 7% to $83.77 per barrel.  

Overall net realized equivalent price averaged $7.22 per thousand cubic feet equivalent (Mcfe) in the quarter, reflecting a 12% rise from the year-ago figure.

Balance Sheet

As of Jun 30, 2014, QEP Resources had cash and cash equivalents of $702.3 million and long-term debt of $3,910.8 million, representing a debt-to-capitalization ratio of 50.6%.


QEP Resources raised its 2014 production guidance to 289−304 Bcfe from 274−298 Bcfe. The company also lifted its 2014 capital investment projection to $1,815−$1,915 million from $1,705-$1,805 million.

Zacks Rank & Other Stock to Consider

QEP Resources, in its present form, came into existence following the 2010 spin-off of Salt Lake City, UT-based Questar Corporation's ( STR ) oil and gas exploration and production business into a separate, independent, publicly traded entity.

Currently, QEP Resources carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the same industry like Callon Petroleum Company ( CPE ) and Carrizo Oil & Gas Inc. ( CRZO ). Both the stocks sport a Zacks Rank #1 (Strong Buy).

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QUESTAR (STR): Free Stock Analysis Report

QEP RESOURCES (QEP): Free Stock Analysis Report

CARRIZO OIL&GAS (CRZO): Free Stock Analysis Report

CALLON PETE-DEL (CPE): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: STR , QEP , CRZO , CPE



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