Independent oil and gas company SM Energy Company 's SM first-quarter 2016 adjusted loss of 83 cents per share came in line with the Zacks Consensus Estimate. The company had posted earnings of 21 cents in the year-ago quarter.
Total revenue was $143.1 million in the quarter, down 60.9% from $365.9 million in the prior-year quarter. Revenues also failed to meet the Zacks Consensus Estimate of $280.0 million.
The company's first-quarter production came in at 147.5 thousand barrels of oil equivalent per day (MBoe/d), down 20.8% from the year-ago level of 186.4 MBoe/d. The decline was mainly attributable to termination of completion activity in the Eagle Ford shale.
SM Energy produced 392.2 million cubic feet per day (MMcf/d) of natural gas in the quarter, up 23.1% year over year. Oil production also decreased 22% year over year to 45.3 thousand barrels per day (MBbls/d). Natural gas liquids contributed 36.8MBbls/d to the total volume, down 15% from the first quarter of 2015.
Including the effect of hedging, the average equivalent price per barrel of oil equivalent (Boe) was $26.74 compared with $33.05 in the year-ago quarter. Including hedging activities, the average realized price of natural gas decreased 14% year over year to $3.02 per thousand cubic feet (Mcf); average realized prices of oil declined 15.2% to $49.94 per barrel; and average realized prices of natural gas liquid plunged 38.4% to $13.54 per barrel.
On the cost front, unit lease operating expenses (LOE) decreased 4.3% year over year to $3.79 per Boe in the quarter. Transportation expenses decreased marginally to 6.06 cents per Boe from $6.08 per Boe in the year-ago period. General and administrative expenses were down 7.7% to $2.40 per Boe from the prior-year level of $2.60 Boe, while depletion, depreciation and amortization (DD&A) expenses increased 23.1% to $15.96 per Boe from the year-ago level of $12.96 per Boe.
Net cash from operating activities decreased to $118.3 million during the quarter. The company had generated $283.9 million in the year-ago quarter. As of Mar 31, 2016, SM Energy had a cash balance of $0.05 million and long-term debt of $2,703.7 million, with a debt-to-capitalization ratio of 64.2% as against 53.9% in the prior-year quarter.
SM Energy estimates production for 2016 in the range of 51-55 MMBoe/d. Production for the second quarter is projected between 13.1 MMBoe/d and 13.5 MMBoe/d.
The estimated LOE per Boe is within $4.10-$4.50, while LOE is projected in the $4.10-$4.50 range.
The company has set its capital expenditure budget for 2016 at $705 million.
SM Energy currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include ReneSola Ltd. SOL , Seadrill Partners LLC SDLP and Braskem S.A. BAK . All these sport a Zacks Rank #1 (Strong Buy).