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EOG Resources Slips to Narrower-than-Expected Loss in Q4

Zacks Equity Research
Updated

EOG Resources Inc. EOG reported fourth-quarter 2015 adjusted loss of 27 cents per share, narrower than the Zacks Consensus Estimate of a loss of 33 cents. The company’ adjusted earnings were 79 cents per share in the year-ago quarter.
 

Total revenue in the quarter plunged to $1,796.8 million from $4,645.5 million in the year–ago quarter. Also the top line missed the Zacks Consensus Estimate of $2,074.0 million.

Operational Performance

During the quarter, EOG’s total volume contracted 6.6% from the year-earlier level to 52.4 million barrels of oil equivalent (MMBoe) or 569.5 thousand barrels of oil equivalent per day (MBoe/d).

Crude oil and condensate production in the quarter totaled 281.0 thousand barrels per day (MBbl/d), down from 307.7 MBbl/d from the prior-year level. Natural gas liquids (NGL) volumes decreased to 79.1 MBbl/d from the year-ago quarter level of 83.6 MBbl/d. Natural gas volumes were 1,257 million cubic feet per day (MMcf/d), lower than the year-earlier level of 1,310 MMcf/d.

Average price realization for crude oil and condensates plummeted to $40.32 per barrel from $72.74 per barrel in fourth-quarter 2014. Quarterly NGL prices declined to $13.25 per barrel from $23.53 a year ago. Natural gas was sold at $1.88 per Mcf, reflecting a year-over-year plunge from $3.38 per Mcf.

Liquidity Position

At the end of the fourth quarter, EOG had cash and cash equivalents of $718.5 million and long-term debt of $6,653.7 million. This represents a debt-to-capitalization ratio of 31%.

During the quarter, the company generated approximately $685.5 million in discretionary cash flow compared with $1,898.9 million in the year-ago quarter.

Guidance

EOG’s first-quarter daily production is expected between 519.2 MBoe/d and 551.0 MBoe/d, which includes 71–79 MBbls/d of NGL and 1,157–1,203 MMcf/d of gas. For the full year, EOG expects daily volume between 508.3 MBoe/d and 549.2 MBoe/d, comprising NGL in the 70.0–80.0 MBbl/d range and natural gas in the 1,070–1,135 MMcf/d band.

Zacks Rank and Stocks to Consider

EOG currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the same space are Diamond Offshore Drilling, Inc. DO, Independence Contract Drilling, Inc. ICD and North Atlantic Drilling Limited NADL. Each of these stocks holds a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DIAMOND OFFSHOR (DO): Free Stock Analysis Report
 
EOG RES INC (EOG): Free Stock Analysis Report
 
NORTH ATL DRILG (NADL): Free Stock Analysis Report
 
INDEPENDC CONTR (ICD): Free Stock Analysis Report
 
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Zacks Investment Research