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QEP Resources (QEP) Q1 Loss Betters Estimates, Stock Up

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On Apr 27, 2016, domestic energy explorer QEP Resources Inc.QEP reported narrower-than-expected loss for first-quarter 2016. Higher production especially from the Williston and Permian Basins aided the results. This was partially dampened by lower price realizations.

Following the first-quarter result announcement, the company rose more than 6% on the NYSE.

The company reported loss per share - excluding special items - of 53 cents, narrower than the Zacks Consensus Estimate of loss of 59 cents. However, the bottom line came in much wider than the year-ago-quarter adjusted loss of 5 cents.

QEP Resources Inc. (QEP) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Quarterly revenues of $261.3 million decreased about 44.2% from first-quarter 2015 and failed to surpass the Zacks Consensus Estimate of $459 million.

Volume Analysis

QEP Resources' overall production during the first quarter was 82.7 billion cubic feet equivalent (Bcfe), reflecting a 10% improvement from the prior-year quarter. Notably, gas accounted for 52.5% of total production. A significant increase in production from the Williston and Permian Basins drove the upside.

Natural gas volumes improved 2% year over year to 43.4 Bcf, while liquid volumes improved significantly to 6,541.4 thousand barrels.

Realized Prices

QEP Resources' average realized natural gas price in the quarter was $2.46 per thousand cubic feet, down 25% from the year-ago quarter price of $3.29. Moreover, average oil price realization decreased nearly 39% to $35.64 per barrel.

Overall net realized equivalent price averaged $3.68 per thousand cubic feet equivalent in the quarter, reflecting a 34% decline from the year-ago figure.

Operating Expense

Total operating expenses for the quarter flared up to $1,641 million from $566.2 million in the year-ago quarter.

Balance Sheet

As of Mar 31, 2016, QEP Resources had cash and cash equivalents of $616.4 million. The company's long-term debt was $2,016.2 million, representing a debt-to-capitalization ratio of 38.8%.

Guidance

QEP Resources slightly increased the lower limit of its 2016 production guidance range to 303-328 Bcfe from 300-328 Bcfe.

The projection for 2016 capital spending is affirmed at $450−$500 million.

Zacks Rank & Stocks to Consider

Currently, QEP Resources carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy sector include PetroChina Co. Ltd. PTR , Vanguard Natural Resources, LLC VNR and Braskem S.A. BAK . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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PETROCHINA ADR (PTR): Free Stock Analysis Report

BRASKEM SA (BAK): Free Stock Analysis Report

QEP RESOURCES (QEP): Free Stock Analysis Report

VANGUARD NATURL (VNR): Free Stock Analysis Report

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


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

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