SM Energy (SM) Posts Q1 Earnings, Revenues Beat Estimates
Zacks Investment Research | May 02, 2017 10:44PM ET
Independent oil and gas firm SM Energy Company’s (NYSE:SM) first-quarter 2017 adjusted earnings of 18 cents per share compared favorably with the Zacks Consensus Estimate of a loss of 36 cents and the year-ago comparable quarter loss of 83 cents.
Total revenue skyrocketed 160% from $143.1 million in the prior-year quarter to $372.7 million. The top line also beat the Zacks Consensus Estimate of $314 million.
Significantly low operating expenses along with higher oil and gas equivalent realized prices supported the strong first-quarter results.
Operational Performance
The company’s first-quarter production came in at 134.4 thousand barrels of oil equivalent per day (MBoe/d), down 9% from the year-ago level of 147.5 MMBoe/d. The decline is mainly attributed to the divestment of producing properties during early March this year.
SM Energy produced 376.6 million cubic feet per day (MMcf/d) of natural gas in the quarter, down 4% year over year. Oil production decreased 13% year over year to 39.2 thousand barrels per day (MBbls/d). Natural gas liquids contributed 32.5 MBbls/d to the total volume, down 12% from the first-quarter 2016.
Due to hedging, the average equivalent price per barrel of oil equivalent (Boe) was $27.55 compared with $26.74 in the year-ago quarter. Including hedging activities, average realized price of natural gas increased 16% year over year to $3.50 per thousand cubic feet (Mcf). Average realized prices of oil fell 10% to $44.97 per barrel, whereas average realized prices of natural gas liquid grew 42% to $19.18 per barrel.
On the cost front, unit lease operating expenses (LOE) increased 1% year over year to $3.82 per Boe. Transportation expenses, however, decreased to $5.88 per Boe from $6.06 per Boe in the year-ago period. General and administrative expenses rose 3% to $2.08 per Boe from the prior-year level of $2.01. Depletion, depreciation and amortization (DD&A) expenses were down 29% to $11.39 per Boe from the year-ago level of $15.96.
Liquidity
Net cash from operating activities increased to $134.9 million during the quarter from $118.3 million in the year-ago quarter. As of Mar 31, 2017, SM Energy had a cash balance of $659.1 million and long-term debt of $2,898.6 million. The company had a debt-to-capitalization ratio of 52.6% compared with the 53.7% in the preceding quarter.
Operating Expenses
Operating expenses amounted to $207.1 million in the first quarter as against $669.8 million in the year-ago quarter, down approximately 69%. Exploration expenses declined to almost $12 million from $15.3 million in the year-ago quarter.
Q1 Price Performance
The company underperformed the Zacks categorized Zacks Investment Research
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