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WPX Energy (WPX) Q2 Earnings and Revenues Surpass Estimates

Zacks Equity Research

WPX Energy Inc.’s WPX second-quarter 2019 earnings of 9 cents per share surpassed the Zacks Consensus Estimate of 7 cents by 28.6%. The bottom line also increased from 6 cents reported in the year-ago quarter.

The company reported GAAP earnings of 72 cents in the second quarter against a loss of 21 cents in the year-ago period. The difference between GAAP and operating earnings in the reported quarter was due to a one-time gain related to its equity interest in the sale of the Oryx II pipeline project.

Total Revenues

WPX Energy’s quarterly revenues of $695 million beat the Zacks Consensus Estimate of $578 million by 20.3% and improved from the year-ago figure of $430 million by 61.6%.

WPX Energy, Inc. Price, Consensus and EPS Surprise

WPX Energy, Inc. Price, Consensus and EPS Surprise

WPX Energy, Inc. price-consensus-eps-surprise-chart | WPX Energy, Inc. Quote

Highlights of the Release

Total production in the second quarter was 159.6 thousand barrels of oil equivalent per day (Mboe/d), up 28% year over year. Liquids volumes accounted for nearly 79% of total production, reflecting the company’s increasing focus on oil.

Oil production in the quarter was 97.9 thousand barrels per day, which was nearly 21% higher than the year-ago level, courtesy of 30% and 25% growth in volumes in Delaware and Williston basins over the past 12 months.

Total expenses were $514 million, up 18.7% from $433 million in the year-ago quarter.

Interest expenses in the reported quarter were $40 million, up 2.6% from $39 million a year ago.

The company initiated a program to repurchase up to $400 million of shares in the next 24 months, which will further increase WPX Energy’s shareholder value.

Realized Prices & Hedges

Realized oil prices in the quarter were $57.42 per barrel, down 9.8% from the year-ago level.

Realized natural gas prices were 88 cents per thousand cubic feet, down 21.4% from a year ago. Realized prices for natural gas liquids were down 41.7% from the year-ago quarter to $12.21 per barrel.

For the remainder of 2019, WPX Energy has 60,500 bbl/d of oil hedged at a weighted average price of $55.29 per barrel. The company also has 110,000 million British thermal units (MMBtu) per day of natural gas hedged at a weighted average price of $3.07 per MMBtu.

Financial Update
 
Cash and cash equivalents of WPX Energy on Jun 30, 2019 were $109 million compared with $3 million as of Dec 31, 2018.

Its long-term debt on Jun 30, 2019 was $2,157 million, down from $2,485 million at the end of December 2018.
 
Net cash from operating activities in the first half of 2019 was $634 million compared with $428 million recorded in the comparable year-ago period. During the first six months of 2019, capital expenditure was $774 million compared with $660 million in the comparable prior-year period.
 
Guidance

Taking into consideration strong production in the first half of the year, WPX Energy made an upward revision in its total production guidance for 2019 to 160-165 Mboe/d from the prior range of 149-161 Mboe/d.

The company now expects 2019 oil production in the range of 101-103 Mboe/d versus the prior guided range of 96-100 Mboe/d.

Capital expenditure for 2019 is expected in the range of $1,100-$1,275 million.

Zacks Rank

Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Noble Energy, Inc. NBL incurred an adjusted loss of 10 cents per share in second-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 13 cents.

EQT Corporation EQT reported second-quarter 2019 adjusted earnings of 9 cents per share against the Zacks Consensus Estimate of a loss of 4 cents.

Cabot Oil & Gas Corporation’s COG second-quarter 2019 earnings per share of 36 cents surpassed the Zacks Consensus Estimate of 33 cents.

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