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Stone Energy (SGY) Reports Wider-than-Expected Loss in Q1

Stone Energy Corp. SGY posted first-quarter 2016 loss of $3.39 per share, substantially wider than the Zacks Consensus Estimate of loss of 87 cents. It was however, narrower than a loss of $5.93 per share incurred in the year-earlier quarter.

Total operating revenue plunged 47.4% year over year to $80.7 million in the quarter from $153.5 million. The top line, however, beat the Zacks Consensus Estimate of 69 million.

Operational Highlights

During the quarter, production averaged 207.0 million cubic feet of gas equivalent per day (MMcfe/d), down 25.4% from the prior-year quarter level of 277.6 MMcfe/d. Of the total production, natural gas accounted for 36%, oil constituted 52% and natural gas liquids (NGL) made up the remaining 12%.

Overall realization, on a per Mcfe basis, was $4.26 in the reported quarter as against $5.93 in first-quarter 2015. Natural gas price of $2.22 per Mcf was below $2.54 in the year-ago quarter. NGL price declined 28% year over year to $13.01 per barrel. Oil price also plunged more than 44% from the year-ago quarter to $36.87 per barrel.

On the cost front, unit lease operating expenses decreased to $1.04 per Mcfe from $1.10 in the year-ago quarter. Depreciation, depletion and amortization was $3.21 per Mcfe compared with $3.41, while salaries, general and administrative (SG&A) expenses came in at 73 cents per Mcfe as against 68 cents.

Liquidity

At the end of the quarter, Stone Energy had approximately $367.1 million in cash and $1,063.1 million in long-term debt, with a debt-to-capitalization ratio of 126.8% as against 57.8% in the year ago quarter. Discretionary cash flow plummeted 67.1% year over year to $28.1 million.

Guidance

For the second quarter, the company expects net daily production of 156−168MMcfe. For 2016, it anticipates total volume in the range of 156−168MMcfe per day. Stone Energy expects its capital outlay projection for 2016 to be $200 million.

Ranks

Stone Energy carries a Zacks Rank #3 (Hold). Some better-ranked stocks from 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).

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BRASKEM SA (BAK): Free Stock Analysis Report
 
STONE ENERGY CP (SGY): Free Stock Analysis Report
 
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