Stone Energy Corp.
) reported fourth-quarter 2012 earnings of 89 cents per share,
which comfortably surpassed the Zacks Consensus Estimate of 55
cents. However, the quarterly earnings were down 4.3% from the
year-earlier profit of 93 cents per share on lower price
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Total operating revenue increased 14% year over year to $254.9
million from $223.6 million and beat the Zacks Consensus Estimate
of $240.0 million.
For full-year 2012, the company earned $3.03 per share compared
with the year-earlier profit of $3.97 and beat the Zacks
Consensus Estimate of $2.71 per share. Total revenue was $951.5
million, representing more than 9% increase from the year-ago
level of $869.9 million.
During the quarter, production averaged 270 million cubic feet of
gas equivalent per day (MMcfe/d), up 26.2% from the year-earlier
level of 214 MMcfe/d. Of the total production, natural gas
accounted for 46% while 44% was oil and the remaining 10% natural
gas liquids (NGL).
Overall realization on a per Mcfe basis amounted to $10.21 in the
reported quarter versus $11.34 per Mcfe in fourth quarter 2011.
Natural gas prices decreased to $3.79 per Mcf from $4.11 per Mcf
in the year-ago quarter, while oil price was $106.48 per barrel
(down 3.5% on an annualized basis). Natural gas liquids prices
also decreased 41.2% from the year-ago quarter to $35.96 per
On the cost front, unit lease operating expenses increased to
$2.33 per Mcfe from $2.31 per Mcfe in the year-ago quarter.
Depreciation, depletion and amortization was $3.32 per Mcfe
(versus $3.80 per Mcfe), while salaries, general and
administrative (SG&A) expenses came in at 57 cents per Mcfe
(versus 54 cents per Mcfe).
At quarter end, the company had approximately $279.5 million in
cash and $914.0 million in long-term debt, with a
debt-to-capitalization ratio of 51.2% versus 49.5% in the
preceding quarter. Discretionary cash flow decreased 6% year over
year to $153.9 million.
For the upcoming quarter, the company expects net daily
production of 230−240 MMcfe per day. For full-year 2012, the
company anticipates total volume in the range of 240-255 MMcfe
The company has projected its capital outlay for the year at $650
million and expects the tax rate at 35-37%. In 2013, Stone
estimates lease operating expenses at $205-$225 million,
transportation, processing and gathering expenses at $26-$32
million, and salaries, general & administrative expenses at
Lafayette, Louisiana-based Stone Energy is an independent oil and
gas exploration and production company engaged in the acquisition
and subsequent exploration, development, operation and production
of oil and gas properties, located primarily in the GoM.
Currently, Stone Energy is well placed in the industry with
widespread high yielding inventory. The company boasts an
extensive capital project inventory and is generating surplus
cash flow with no bank debt. Although Stone Energy aims to
apportion the capital across its portfolio, the focus will be on
the GoM shelf as well as the Marcellus region.
However, as is the case with other independent exploration and
production companies, results for Stone Energy are directly
exposed to oil and gas prices, which are inherently volatile and
subject to complex market forces.
Stone Energy carries a Zacks Rank #3, equivalent to a short-term
Hold rating. However, there are other stocks in the oil and gas
NGL Energy Partners LP
Laclede Group Inc
Calumet Specialty Products Partners LP
) - which hold a Zacks Rank #1 (Strong Buy) and are expected to